As we’ve noted several times of late, a growing number of countries are threatening the US dollar’s status as the global reserve currency by conducting global trade without it – you know, the thing Saddam and Gaddafi threatened to do before they were ‘liberated’ from their mortal coils for other stated reasons.
Some recent headlines;
“No Reason” For Malaysia To Rely On US Dollar, PM Warns As Yuan Influence Grows
De-Dollarization Just Got Real
Here Are 7 Signs That Global De-Dollarization Has Just Shifted Into Overdrive
De-Dollarization Has Begun
Fox News host Tucker Carlson has picked up on this, big time, noting that the process began after the Biden administration started wielding the dollar as a political weapon by freezing US dollars held by Russians.
Carlson cites an article from the Daily Caller, in which authors E.J. Antoni and Peter St. Onge write:
A second critical feature of a reserve currency is its apolitical nature. Which Biden is now gutting. After both parties in Washington destroyed the dollar’s stability with inflation, now the Biden administration has chosen to wield the dollar as a weapon. Together, the message to foreigners they should get out while they still can.
In response to Russia’s war with the Ukraine, the US froze the dollar reserves of Russia’s central bank. To be clear, these were not American assets, but were dollars owned by the Russian central bank and the Russian people. The seizure was intended to cause bank runs and collapse Russia’s credit system. It didn’t work.
Instead, it exposed the Biden administration’s willingness to violate the trillions of dollars foreigners rightfully own. The danger of this precedent is difficult to overstate.
This part is a must-hear from Carlson in response to the above (starts at 7:15 in the video below):
“Smart foreigners started to dump the US dollar. Why? Because the US dollar was no longer a reliable store of power. Suddenly it was a political weapon that could be wielded at will against anyone who held it.
“So what if you have a border dispute with your neighbor that the State Department hadn’t authorized? Or, what if you accidentally criticized transgender theology, and irritated the human rights campaign? Well, the US government might denounce you as immoral and then confiscate all your money. Because they just did that with Russia.
“And as a result, dollars begin to look much less appealing to the rest of the world – and so de-dollarization began, and it has accelerated at remarkable speed, almost without comment in the American media, over the last year.
“So Russia announced it will conduct business in Asia, Africa and Latin America in Chinese currency. Brazil, which as a brand new government supported by the Biden administration announced it will do the same thing… Pakistan is doing the same thing, that’s a long-time US ally. India and Malaysia, two of the biggest economies in the world, announced they’ll be settling their trade in their own currencies – not the dollar. Even France, which we liberated, is using Chinese currency in a new liquefied natural gas trade. China and Saudi Arabia are now major business partners.”
Carlson also points out that nobody wants to hold a currency that continues to devalue due to endless printing, calling it “6th grade economics.”
And while Biden “is continuing to send the contents of our treasury – our dollars, to corrupt oligarchs in eastern Europe and around the world,” at the very same time, “he’s selling off America’s most valuable hard asset – that’s our Strategic Petroleum Reserve, because unlike the US dollar, oil – which is in the reserve, has inherent value … so unlike fiat currencies like the dollar, oil will always have value. That’s why Russia is not now in poverty because they have a lot of oil. But we have less because the SPR has been drained.”
What could reverse this? Ending the war in Ukraine, says Carlson. But US politicians are hell-bent on winning at all costs.
“Politicians in Washington remain mired in their weird boomer WWII fantasies where they’re all Winston Churchill and Zelensky is the head of the French resistance.”
And in a Wednesday op-ed, Carlson writes:
War always is a destabilizing event. It always challenges the existing order, but it was the West’s reaction to the Russian invasion that seemed too ominous. Policy makers in the U.S. went insane. Joe Biden, helped by his Republican allies in the Senate, appear to be determined not simply to topple the Russian government in some kind of regime change war, but to blow up the postwar economic order that had served the U.S. so generously for so long. So, we thought at the time that the real threat to our future wasn’t just the billions we were sending to Zelenskyy. That was reckless, but probably not going to end America. The real threat was the unprecedented economic sanctions that Joe Biden was allowed to, in fact, encourage to impose. Those sanctions, you’ll recall, were supposed to hurt Russia, but even in March of last year, it seemed obvious they were going to hurt the United States much more than they hurt Russia. Here’s what we said 13 months ago.
We should prepare to lose our position as holder of the world’s reserve currency. That is happening in slow motion. It’s unmistakable. Now, the Biden people seem to have no idea this is going on or maybe they want it to happen. Joe Biden was up there at the State of the Union bragging about how he took 30 points off the Russian ruble in a single day. Hurray. Good for us, but once we stop celebrating our win, the destruction of the Russian economy, they deserve it. You have got to wonder, is there a downside to this? Could it be a pyrrhic victory? Let’s see. These policies have driven Russia, China, India, Turkey and other countries to accelerate their flight from the U.S. dollar. Let’s be clear. That’s the majority of the global economy. This may be the most reckless and destructive thing any American president has ever done to the United States.
So, that was last year and at the time it was really just yelling into the wind. Those views were considered absurd, even treasonous. Biden and his Republican allies described sanctions against Russia as morally essential. We seized oligarchs’ yachts at anchor. We closed the Apple Store in Moscow. We were all assured these were important victories and anyone who has questions what their long-term economic consequences was a Putin stooge. That was the consensus in Washington last spring. In case you’ve forgotten what it sounded like
Of course, you know, the famous pictures from Germany in the early twenties, banknotes in wheelbarrows. Want to buy a cup of coffee? That will be £30 of currency. Kids playing with worthless stacks of deutschmarks. That was called Weimar, the Weimar Republic and that government collapsed because of hyperinflation and then economic collapse led to communist revolutions across Germany and ultimately to fill in the blank the Nazi regime. That’s well known.
In fact, it’s a cliche at this point, but here’s the thing that nobody seems to remember What brought on the economic collapse that set the world on fire. Does anyone remember that? Why did the German government blow up its own currency? Well, simple. The German government took on too much debt in order to pay for a pointless war. Yes, a pointless war did that and if that sounds familiar, it’s because exactly what we have done repeatedly for decades. We did it in Vietnam. We did it in Iraq. We did it in Afghanistan and every time we got away with it, because uniquely, we held the world’s reserve currency, but this time could be very, very different. War against Russia will be the last war we can afford to fight.
Reprinted with permission from Zero Hedge.
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