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It’s the end of an era for the US dollar
New World Order.
The stakes couldn’t be higher — how the US is losing the Currency Wars:
Putin just bent the knee, committing to trade in Chinese yuan:
“We are in favor of using the Chinese yuan for settlements between Russia and the countries of Asia, Africa, and Latin America.”
At the same time, China has set up clearing arrangements with Brazil, which has quadrupled its foreign reserves in yuan last year.
The BRICS coalition now boasts a larger combined GDP and population than the West and poses a significant challenge to dollar hegemony.
Even Saudi Arabia, a supposed US ally, is seriously considering trading oil for yuan after China just brokered a Saudi-Iran peace deal.
And adding insult to injury, Kenyan president Ruto publicly urged his citizens yesterday to drop dollars, warning of a coming collapse.
You know things are bad when cable news interrupts its regular programming of manufactured outrage and moral preening to discuss financial realpolitik.
Over the weekend, both CNN and Fox News ran segments… Fareed Zakaria sounded the alarm bell with a dire warning:
“If the US dollar’s global supremacy erodes, America will face a reckoning like none before.”
Even syrupy sweet morning news show Fox & Friends struck an ominous tone:
“It’s really hard to overstate how catastrophic the abandonment of the US dollar would be as the global reserve currency… There is a perfect storm happening right now.”
If half the world is slowly buy surely opting out of dollars, who will be left to prop up the US Treasury Department’s weekly auctions, averaging $60 billion.
That’s a lot of moolah.
Until now, finding spare balance sheets to park debt wasn’t a problem because the entire world wanted dollar denominated savings.
That’s how the US gov was able to export its inflation, when other countries were willing to cycle their trade surplus back into treasuries.
But if demand significantly dries up, the Fed will be left scrambling to monetize the debt and absorb those offshore dollars come flooding home.
This means rampant inflation.
We might be seeing the beginning of this, with the Fed increasing its balance sheet by $400 billion in just the lat 2 weeks.
There’s now 2 choices going forward:
1) Herd the domestic population into the slaughter pen of strict capital controls and CBDCs. Then, once the gates are securely locked, impoverish the people in an effort prop up the smoldering remains of a delusional past.
OR
2) Play to America’s strengths and adopt virtual free banking, allowing open source monetary networks and privately issued cryptocurrency to drive global dollarization. This is a model the CCP cannot structurally compete with, but it also means giving up the insane fantasies of empire.
Tragically, hostile regulators are pushing the US in the wrong direction.
Want to compete with the CCP on authoritarianism? That’s the definition of a Pyrrhic Victory.
As seen on LinkedIn by Andrew Axelrod
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