Russia and the Rest of the World Continues to “Dedollarize” (But This is Kind of a Misnomer)

Look, I’m not an economist or a mathematician.

But I am going to tell you this: people are really oversimplifying this situation.

All global money is the US dollar. Obviously, trading in nondollars doesn’t help the US, but it’s not the game-changer some are advertising it as. These currencies are still backed by the dollar.

RT:

Russia is switching to national currencies in energy trade with foreign partners, Deputy Prime Minister Alexander Novak said on Saturday in an interview with the Russia-1 TV channel.

According to the official, most transactions are already made in these currencies, mostly in Chinese yuan and Russian rubles, and in the future Moscow intends to abandon the euro and dollar in energy exports altogether.

“The trends have changed greatly toward reducing the use of dollars and euros. Considering the current problems with these currencies, in our settlements we are switching almost exclusively to national currencies,” he said, referring to economic restrictions placed on Russia by Western states due to the Ukraine conflict, which have effectively made it impossible for Russia to conduct transactions in euros and dollars.

“Our partners in China are already paying for gas in yuan, as well as partly for oil. They also pay in rubles. We will continue to improve these mutual settlements in national currencies,” Novak pledged.

The plan, insofar as I understand it, is to back the currencies with actual wealth – i.e., commodities – but that hasn’t happened yet.

Moreover, this whole “basket of reserve currencies” thing does not make sense to me, and I am slightly concerned that it does not make sense to the people who are trying to explain it to me.

You then also have the brutal extent to which the Chinese economy is dollarized. China has real wealth, they actually produce things, they have the ability to dedollarize, but there is no situation in which this is not extremely, extremely painful.

I have read the BRICS/SCO papers, and I do not understand it, or at least do not understand the potential for it to be implemented through anything other than a completely uncontrollable global financial collapse.

In that sense, a war would make sense for China, as a way to restructure the economy and a way to justify to their own population while the economy is such a mess.

The kind of wildcard here is Saudi and the Gulf, because of the very tenuous relationship of the dollar to oil.

I’m now a 100% Prince Muhammed stan, and I think he’s going to surprise us all.

Again – not an economist, not a mathematician, just an observer here who reads a lot.

But I will tell you: this is not just “oh well, these countries will stop trading in the dollar and then the dollar will collapse and the American empire will end because they won’t be able to afford their war machine and everything will be happy happy.”