The sanctions leveled against Russia and exorbitant inflation are rushing in the end of the dollar as the world’s reserve currency. By unplugging Russia from the SWIFT network, Biden has actually sparked a fission reaction towards dedollarization while helping China to become the world’s banker. Biden is fueling a rival who is the real challenge to the world.
China has been bypassing the SWIFT system and getting countries to trade in yuan.
The latest agreement has been with the Bank of Israel, which is the Israeli central bank. The Israeli central bank has agreed to keep Chinese yuan as a part of its currency holdings in reserve for the first time ever. At the same time the Bank of Israel is planning to reduce its holdings of European Union euros and the United States dollar.
Israel has a small GDP but it’s one more nation dumping dollars and euros.
Other Countries Might Bolt
Saudi Arabia could be next. They’re considering dumping the dollar.
According to the Global Times, a China state-affiliated media outlet, India is also exploring the yuan for oil purchases from Russia.
India is reportedly planning to buy Russian oil at discounted prices and even considering the Chinese yuan as a reference currency in an India-Russia payment settlement mechanism, a move that Chinese analysts say represents the growing frustration among world economies over the US-led sanctions against Russia that have rattled global markets.
Together, India and China combine to make up about 36% of the global population and 22% of global GDP. If these countries do follow through with their de-dollarization plans, it would have major effects on the dollar long-term. To be clear, these countries may just be bluffing, or strengthening their negotiating position. But they may be quite serious.
Because the dollar is the reserve currency, the US can print money. That will have to stop.
“This topic (of dedollarization) is especially important now because of where the United States is in its development arc. The US, by most accounts, appears to be in the initial decline phase where its share of global activity is declining and the costs of maintaining the empire exceed the revenue it brings in,” Day Trading.com reports.
Empires rise and fall on holding the reserve currency.
The US keeps devaluing the currency by printing more. That and the low interest rates have people tooking for alternatives.
BREAKING: For the first time, Israel’s central banks adds Chinese yuan to its reserve currency holdings.
— The Spectator Index (@spectatorindex) April 23, 2022
Russia dumped the dollar as the US weaponized the SWIFT system and sanctions on Russian banks.
Russia dumps all dollars from its wealth fund. And Chinese Yuan will make up 30%.
— Global Politics (@Geopol2030) June 3, 2021