According to the US financial website ZeroHedge on June 20, U.S. Congressman Alex Mooney once again submitted a plan to the US Treasury Department to urge the Federal Reserve to restore the gold standard. . The US dollar has fallen 73% against most major currencies in the past 50 years, and has lost 97% of its value since 1913. On average, the US dollar will lose 50% of its purchasing power every generation.
data shows that with the increase in the US money supply, the purchasing power of the US dollar continues to collapse. Since 1971, the 100 US dollar has depreciated by 98%. The 1 US dollar in 1913 has the same purchasing power as the 19 US dollar in 2022. In this regard, Wall Street predictor Peter Schiff told Russian media RT on June 28 that the status of international reserve currencies has never been eternal, and the US dollar is at its end.
It is obvious that after the global economy recovers from the crisis, it will weaken the status and value of US dollar and US dollar assets, forcing countries to rethink the role of the US dollar, find alternatives to the US dollar, and increase non-US currency assets such as the RMB, the euro and gold. In response, senior economist Jeffrey Sax told FT in early June that "eventually, we will see an alternative payment system where the US dollar, euro and renminbi share the halo of global reserve currencies."
According to the latest data of IMF, the share of the US dollar fell to its lowest in two years in the first quarter of 2022, and the proportion unexpectedly dropped to 59.2%. It is worth mentioning that in 2000, the proportion was as high as 73%. Similarly, to market surprise, since 2008, peers in emerging markets and European countries are selling US bonds at a rate that has not been seen in more than 50 years. According to the explanation of International Settlements , the continued spread of the new coronavirus in Europe and the United States may prompt countries to accelerate the adoption of digital payments and encrypt digital currency , because the current US dollar-led international settlement system no longer meets the new requirements of global trade.
According to Russian media RT last week, the US dollar dominated and has brought many problems to other countries. Therefore, there should be some kind of transnational settlement currency in the world that does not rely on any country. Now digital currencies or encrypted digital currencies anchored by strategic resources are emerging in the market, using blockchain technology as the core to bypass the US dollar. At the same time, EU , Russia and emerging market countries are also jointly revaluing the strategic economic value of gold.
For example, gold still acts as a trust anchor in the global financial system and is regaining its financial attributes for thousands of years, because from the perspective of monetary history, gold has always been the rival of the US dollar, which can be observed from the US Treasury's efforts to manipulate gold in the past decade.
So from this perspective, as a global oil producer, it can fully utilize gold reserves to launch digital currencies to compete with the petrodollar, and gradually abandon the US dollar system in crude oil trading. Combined with it, The Russian Central Bank of Russia has announced that it will begin testing digital ruble . Therefore, digital currencies developed based on blockchain technology as the core do not theoretically need technical support for the SWIFT system.
And just a month ago, the Dutch Central Bank wrote an article that if the dollar collapses, gold can serve as the basis for establishing a monetary system again, and it seems to be ready for the gold standard, which is quite rare, because, this is a de-dollarization voice from a developed western country that provides negative interest rates . Foreign media analysts believe that at present, many European countries including Germany, France, , Netherlands , may have fully prepared for the euro digital currency that agrees with the currency gold standard or is backed by gold.
According to statistics from the BWC Chinese website financial team in recent years, at present, China, Russia, India, Japan, Germany, Vietnam, Italy, Indonesian , UAE, Angola , Turkey , Qatar , Vietnam, Pakistan , Romania , Spain, Ireland , Netherlands, Armenia , Portugal, Kyrgyzstan , Bahamas , , , Bahamas , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , 0 representative countries, including El Salvador , Ecuador , Uganda , Brazil , South Africa, Venezuela , Iraq , Canada, Malaysia , Thailand, Kazakhstan , Belarus , Brunei , Sweden , Lithuania , Kuwait , Nigeria and Cambodia , etc., have begun the de-dollarization process in their own ways.
Immediately afterwards, according to a follow-up report by RT, countries including the United Kingdom, Russia, Austria , Germany, Sweden, Switzerland , South Africa, France and Bosnia have all shown interest in this and have negotiated with Iran on the use of cryptocurrencies in trade and financial transactions. What caught the United States even more off guard is that Reuters quoted sources two weeks ago that the European Central Bank, the United Kingdom, Switzerland, Canada, Japan, Sweden and the Bank for International Settlements have jointly formed a digital currency development team.
At the same time, according to Reuters on June 30, the coal purchased by India's largest cement producer from neighboring countries will be settled in RMB. Sources said that the sales of goods are organized by the branch of Siberian Coal Energy Company, headquartered in Dubai . It is said that other companies have also arranged to order coal in RMB payment. In March this year, India had adopted a rupee-based payment mechanism to continue importing crude oil from Iran. Subsequently, the UAE and India also signed an currency swap agreement to promote trade and investment, including energy, and excluding the US dollar from settlement.
In fact, as early as November last year, according to the Indian Economic Times, the RBI announced that the Indian rupee exchange rate will give up anchoring the US dollar and replace the US dollar with RMB, focusing on the RMB to improve the export competitiveness of the country's goods, because the RMB is more stable.
In recent months, in addition to India, the most surprising countries are Israel and Switzerland, and they are also going to start de-dollarization and sell US dollars in exchange for RMB.
According to a report released by the International Monetary Fund in June, the Bank of Israel recently proposed a new strategy of more than US$200 billion in reserves, starting from 2022, which will cut the US dollar's share in the portfolio and strengthen the allocation of the Australian dollar, Canadian dollar, RMB and Japanese yen.
According to the US financial website Zero hedging a week ago, the RMB is currently popular in Israel. Israel announced that it would include the RMB in the country's foreign reserve assets for the first time, and it was sold out in exchange for RMB reserve shares to increase its exposure to the RMB. The latest report released by
IMF in June also shows (see the figure below for details). In addition to Israel selling US dollars in exchange for RMB, six countries, including Russia, Brazil, Switzerland, Mexico , Chile and South Africa, have also joined the process.
In addition, the Vietnamese authorities also released a message saying that merchants, residents, and related banks and institutions that conduct cross-border economic and trade have been authorized to use RMB or Vietnamese Dong for transactions. Immediately afterwards, another US economic ally will also publicly stop the US dollar, which once again surprised the market.
According to Reuters on June 28, citing several sources, the Bank of Japan is leading the global establishment of an international network for cryptocurrency payments, similar to SWIFT, and can bypass the US dollar in economic and trade fields such as oil with many countries around the world, including Iran, and establish a digital currency system. It has now entered the second phase (the concept phase certification was completed in March) to support cross-border transactions and settlements. Data shows that Iran is Japan's major oil supplier.
Meanwhile, the feasibility of a digital currency backed by Europe that bypasses SWIFT is expected to make new progress in the coming months. According to Bloomberg, the Swedish central bank announced a week ago that it would use digital cryptocurrencies anchored to the country's currencies to support financial settlements and support blockchain technology to de-dollarization. In particular, the Federal Reserve has used different dollar tightening cycles to accelerate this speed after utilizing the intensified volatility of the dollar index to collect seignior tax. It is obvious that this time the de-dollarization process will be driven by technology.
This means that, including multiple traditional American allies and neutral countries like Switzerland, may be jointly developing de-centralization of US dollars with digital currencies based on blockchain as the core. According to the explanation of former Bank of England governor Carney , the dominance of the US dollar has brought problems to decision makers outside the United States. He believes that the best way to reduce the US dollar is to replace the US dollar with a globally accepted digital currency to facilitate transactions in the global market.
So, from this perspective alone, the reset process of the US dollar as a reserve currency may have begun. These new news all indicate that the global new de-dollarization process of using digital currency technology or digital gold wallets is accelerating the process of de-dollarization of the US dollar's value decline, and this is also what our readers and friends need to pay attention to. As predicted in the latest research report released by Saxo Bank analysts, new reserve currencies may appear in Asia. (End)
