Some time ago I posted the USD was in danger of depreciating value. I pointed to deficits and money printing.
The answer I got was the USD was the least ugly person at the party. Made sense at the time but things have changed some what since that post
The USA has made use of sanctions for yrs. We all know about Iran and oil sales as an example
However, the Biden administration has pushed sanctions against Russia to a level unheard of in prior yrs
So lets follow the sanctions and consecutions that follow sanctions
Let's say country A, B, C, D have been and are still sanctioned
Biden has frozen all foreign reserves of sanctioned countries
Biden has cut of sanctioned countries from any ability to use USD to pay bills [SWIFT]
Among other sanctions the countries A,B, C, D have no acce
Now this is serious for Iran, Venuzeula, russia to foreign reserves [held in USD]
I made a mistake and will continue
So we have Iran, N Korea, Russia and any number of others with useless foreign reserves [USD] maybe china feels a problem coming with their FX holdings or maybe this is the time to destroy the USD
So: Russia and china decide it is time to make a new currency. Both china and russia have large gold ownership. SO china and russia decide to trade and use a digital currency, backed by gold, to settle accounts. If Iran wants to join then oil is their currency. India makes stuff and buys stuff with a huge population The citizens all use china issued pay pen credit cards or local currency
What does the USA do. The USA does very little manufacturing. Biden has destroyed the fossil fuel industry. Agriculture needs chemicals and fertilizer. Main St needs manufactured goods such as appliances, shoes, gloves, T-shirts etc. which comes from China. The USA begs for oil which Iran has lots of oil, but no use for USD. The USA needs metals for steel and aluminum, which come mostly from Russia, which russia has sanctioned the USA
Do you see a picture forming here. Large parts of the world can ignore sanctions and who needs the USA and it's worthless USD
The USA produces USD and debt. Nobody wants that stuff. The world wants things you can touch, feel and consume. The USA produces very little of this and mostly for domestic use. Where does the USA find energy to produce the GDP needed, for domestic commerce
Yes the USA produces food. If the fertilizer and chemicals do not come then the USA may need most of the food grown for domestic use age, due to reduced yields and domestic price destruction. Do we use the horse because Biden took the fossil fuel away. Of coarse not but in it's place a great amount of harm
What did we do to ourselves??? Price destruction and shortages. USD and debt
Will sanctions work for us or them???
So who needs the USA and it's sanctions???
Necessity is the mother of invention
In 1974, Saudi Arabia made an agreement with the US to sell its oil to other countries using the Dollar. This was the event that solidified the Dollar as the world’s “reserve currency” Most international trade (in oil and other products) between various countries is done using the dollar as the preferred form of payment.
Saudi Arabia is now considering whether to sell oil to China and getting paid in Chinese currency (Yuan).
https://qz.com/2143450/saudi-arabia-wants-to-sell-its-oil-in-yuan-not-dollars/
India, the world’s second largest importer of oil, is now making a deal with Russia, bypassing the US Dollar as payment form
https://www.washingtonpost.com/world/2022/03/17/india-russia-oil/
I cannot see these changes being a positive development for the USA
Should China and Russia become partners in dominating world trade, many other countries will no longer use or need the Dollar, IMHO
for now... same old problem.
no matter how much our own leaders try to destroy the buck, all the others are worse. buck is king of the sewer.
so the buck is going up against lots of other currencies, but is going down against everything you have to buy.
Bear,
Imagine what gold will do if the US dollar does ever go down!