De-dollarization is official.
It marks the return to national sovereignty, the Westphalian order, and multipolarism and away from neoliberal globalization, the Anglo-American Empire, and unipolarism.
Donald Trump wanted bilateral trade agreements rather than multinational "free trade" agreements, but did he expect it to go this way?
Zero Hedge
"Thank God This Is Happening" Russia Says Time Has Come To Ditch The Dollar
Tyler Durden
4 comments:
Now if Russia would de-privilege its banks, it would strengthen its sovereign currency (by increasing demand for it) and avoid a lot of wealth distribution problems too.
The need for endogenous money creation?
1) Even 100% private banks with 100% voluntary depositors can create SOME deposits/credit/liabilities with relative safety.
2) Fiat creation and equal distribution via a Citizen's Dividend constitutes exogenous money creation - money which can then be re-lent, i.e. "loanable funds."
I should add:
3) Common stock is a form of endogenous private money that shares wealth and power and requires no usury nor even debt unless co-owners can somehow owe themselves what they already own.
The real question is will such insubordination lead to war. The US is not going to let go of the power it wields without a fight, even if the battle is already lost.
“Moscow is accelerating efforts to abandon the dollar in trade transactions, said Russia's Deputy Foreign Minister Sergei Ryabkov. Russian Energy Minister Aleksandr Novak said that a growing number of countries are interested in replacing the dollar as a medium in global oil trades and other transactions.”
Dedollarization means changing creditors and importers.
Explanation…
India and Turkey are in economic trouble because they have had large trade deficits for at least ten years. Hence they have high foreign debt. (Government debt in a government’s own currency is irrelevant.) Turkey’s troubles are especially severe. Each month an average of USD 4.8 billion (in lira equivalence) gets sucked out of Turkey. Over the last 12 months, USD $57.4 billion has been sucked out of Turkey.
Put another way, over the last 12 months, Turkey’s foreign debt has increased by USD $57.4 billion.
A severe trade deficit and foreign debt load cause a nation to suffer shortages in consumer goods, which in turn causes price inflation. And indeed, in Turkey the price of gas, gasoline, clothing, furniture, and food are all rising dramatically. (Exceptions to this rule are the U.S. U.K., Canada, and Australia. All four nations have huge trade deficits like Turkey, but unlike Turkey their currencies are widely accepted outside their borders.)
Meanwhile Russia and Iran have large trade surpluses. They can afford to lend to Turkey in Russian rubles and Iranian rials.
Therefore, if Turkey stops taking loans in dollars or euros, and stops buying imports from foreigners who accept only dollars, then Turkey’s economic problems will remain as severe as ever, but Turkey’s creditors will become Russia and Iran instead of Europe and the USA.
This will mean a loss in U.S. power.
Incidentally, when Russia's Deputy Foreign Minister Sergei Ryabkov says that Russia wants to “abandon the dollar,” Ryabkov means that Russia wants to buy fewer imports from foreigners who accept only dollars. Instead, Russia wants to buy more imports from China, Iran, and other nations.
Again this will mean a loss in U.S. power.
I repeat what I have said before. Since the U.S. government can create infinite dollars out of thin air, and since those dollars are accepted worldwide, imagine the GOOD the USA could have accomplished if it had used its power benevolently, rather than using it to indebt and enslave much of the world.
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