Remember that Russians would say this.
The hegemony of the US dollar is seriously challenged by the rise of the Chinese yuan and by Washington’s failed attempt to wreck the Russian economy by weaponizing the greenback, Andrey Kostin, head of Russia’s banking major VTB, told Reuters on Friday.
The major banking figure said that under the current geopolitical circumstances more and more nations are shifting away from trade settlements in dollar and euro, while China is moving towards removal of strict currency policies.
“The long historical era of the dominance of the American dollar is coming to an end,” Kostin said, in an interview with the news agency. “I think that the time has come when China will gradually remove currency restrictions.”
According to Kostin, VTB has been discussing using the Chinese national currency in settlements with third countries.
“China understands that they will not become world economic power number one if they keep their yuan as a non-convertible currency,” he explained, adding that it was also dangerous for the Peoples Republic to keep reserves invested in US Treasuries.
It’s definitely dangerous, but thus far, they have had no choice.
I suppose that they only realized that the dollar was impossible after the Ukraine situation and the anti-Russia sanctions. So I’m sure they’re scrambling. But this is complicated.
Dollar dominance is coming to an end, in the same way that everything is coming to an end. In the same way you and I will both die some day, the dollar will die.
But the plans so far as to how to do this are not clear. It is much more complicated than simply trading in other currencies, because other currencies are all still backed by the US dollar. China is dollared out in the extreme, for obvious reasons.
China doesn’t want to do Bitcoin maximalism, nor do they want to make their own currency the global reserve currency.
The plan should be, and apparently probably is, to create some kind of gold-backed trade currency. This will work. But that will require all these countries to dump their dollar reserves, and effectively get nothing from them, if the goal is to collapse the dollar.
It’s much easier said than done.
There are a lot of people who still have a lot of power who are willing to do anything to keep the dollar supreme.
If the dollar falls, the Anal Empire falls. The US would actually have to take on reserves of the new reserve currency to back the dollar. Or, I think that would be necessary. It’s not clear. I look for the top experts in every field before I comment on issues, but no one seems to be clear on this whole “de-dollarization” thing, given that the Chinese own so many US treasuries.
I think I need to keep reminding people that this is not really as easy as it might seem.
People get very excited over the increase in non-dollar trade, and that is exciting, but we also need to understand that when people are using the dollar as a reserve currency, even non-dollar trade is still a form of dollar trade.