Countries worldwide are dropping the US dollar: De-dollarization in China, Russia, Brazil, ASEAN

submitted by TheJamesRocket from self.debatealtright

Countries worldwide are dropping the US dollar: De-dollarization in China, Russia, Brazil, ASEAN

 

The global de-dollarization campaign is gaining momentum, as countries around the world seek alternatives to the hegemony of the US dollar.

China and Russia are trading in their own currencies.

Beijing and Brazil have also dropped the dollar in bilateral trade.

The UAE is selling China its gas in yuan, through a French company.

Southeast Asian nations in ASEAN are de-dollarizing their trade, promoting local payment systems.

Kenya is buying Persian Gulf oil with its own currency.

Even the Financial Times newspaper has acknowledged that a “multipolar currency world” is emerging.

 

When Chinese President Xi Jinping visited Moscow in March, his Russian counterpart Vladimir Putin revealed that two-thirds of the countries’ bilateral trade is already conducted in the ruble and renminbi.

“It is important that our national currencies are increasingly used in bilateral trade“, Putin said. “We should continue promoting settlements in national currencies, and expand the reciprocal presence of financial and banking structures in our countries’ markets”.

The Russian leader added, “We support using Chinese yuan in transactions between the Russian Federation and its partners in Asia, Africa and Latin America”.

Just a week after Xi’s trip to Moscow, China announced that it had for the first time used yuan to buy liquefied natural gas (LNG) from the UAE.

The deal was negotiated between the state-owned China National Offshore Oil Company and the French company TotalEnergies, meaning European firms are now willing to conduct transactions in yuan.

French media outlet RFI described the trade as a “major step in Beijing’s attempts to undermine the US dollar as universal ‘petrodollar’ for gas and oil trade”.

The report quoted the chairman of the Shanghai Petroleum and Natural Gas Exchange, Guo Xu, who said the deal encouraged “multi-currency pricing, settlement and cross-border payment”.

all 19 comments
sorted by:
top
newinsightfulfun

[–]cisheteroscumWhite Nationalist 10 insightful - 2 fun10 insightful - 1 fun11 insightful - 2 fun -  (0 children)

Good. Symptoms of the inevitable collapse

[–]arainynightinskyrim 9 insightful - 4 fun9 insightful - 3 fun10 insightful - 4 fun -  (4 children)

The first steps of jewmerica's collapse into irrelevancy on the international scene?

[–]Nombre27 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

I'm wondering if such a threat to the current world order could precipitate WW3.

[–]AlphixNational Socialist 6 insightful - 1 fun6 insightful - 0 fun7 insightful - 1 fun -  (0 children)

Undoubtedly and absolutely.

Once de-dollarization is too advanced, the USA becomes a giant crater. Or in the words of Nethanyahu: "sucked dry until there is nothing left"

[–]Airbus320 1 insightful - 2 fun1 insightful - 1 fun2 insightful - 2 fun -  (1 child)

Mm

[–]AlphixNational Socialist 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (12 children)

Given how Powell seems so dead-set on "fighting inflation" no matter what, I was wondering what he is up to. I mean, fighting inflation is good and all that, but it has clearly come down already and rates' effect on inflation is delayed by a year, so we are just starting to see the effects of last year's rate rises on the inflation numbers. He knows this. So this leads to the question: Is he looking to create a 1929-style depression with a deflationary death spiral? That sounds weird especially given statements by the Treatury dep't about "inflating away the debt".

Ah, but here comes de-dollarization: everybody dropping the USD would tend to sink it, jacking up the prices in USD. While this isn't EXACTLY inflation, it is close enough.

Still trying to thread the needle by "fighting inflation" to combat the effects of de-dollarization.

And when that doesn't work out, all-out war is the ultimate recourse.

[–]DragonerneJesus is white 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (11 children)

I don't get how they plan on inflating away the debt? My understanding is that inflation can be due to increased costs, or increased velocity of money, or growth in the money supply (literally debt).

Increasing interest rates decreases the velocity and hence decreases the inflation. Lowering debt also decreases inflation

[–]AlphixNational Socialist 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (10 children)

Inflating public debt works like this:

Say the debt is 100 trillion (round number). Say the inflation is 2%. And say it's paid once a year, for simplicity's sake.

Next year when the payment of interest (and any capital) is due, it will be paid with dollars worth 2% less.

Not a big difference, but it's also why you might sometimes hear economists talk about REAL interest rates as compared to NOMINAL rates. If the inflation is 5% and your NOMINAL (which is the amount you see on a mortgage, car loan, government bond, etc.) interest rate is 10%, then the REAL (inflation-adjusted) interest rate is 5%, because of the 5% depreciation of the dollars you are paying it back with, the lender actually earns less than the nominal.

Now say the government's 100 trillion debt is due in 25 years.

Say all of a sudden the inflation rate goes to 20%.

25 years later, dollars are 95.3 times more common than when the debt got contracted. The value of EVERYTHING denominated in dollars has been multiplied by 95.3, even the GDP and of course, TAX INCOME. Given that today the US government takes in about 5 trillion totaly income, given all this data, that figure would have inflated to 477 trillion.

Paying back 100 trillion when your income is 477 trillion? Sure! Cash or check?

That's the theory anyway. In reality it's much more complex than this because inflation is theft of the value of the money in everybody's pockets, making it harder and harder for people to actually survive, and much moreso paying taxes.

But yes, this also means that holding assets and fixed-rate debt is where you want to be during high inflation periods. Variable-rate debt will destroy you, and cash will quickly lose its value, and that's why Joe Average gets assraped during inflationary times: He usually has at least SOME cash lying around. In the 25 years at 20% inflation example above, any cash he might hold for the duration will lose 99.9% of its purchasing power. That's using a $100 bill to buy something that is worth an actual dime, like maybe one stick of gum.

[–]DragonerneJesus is white 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (9 children)

Thanks for the answer.

Say all of a sudden the inflation rate goes to 20%.

25 years later, dollars are 95.3 times more common than when the debt got contracted.

Can you explain this step?

Also would they increase the money supply, thereby increasing inflation and devaluing the dollar, by simply taking bigger loans to pay back the old ones that are due?

[–]AlphixNational Socialist 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (8 children)

Inflation being 20% means there is 20% more money a year later.

Multiply 1.2 (120%) by itself 25 times. The total is 95.3...

Inflation IS the increase in money supply, and it IS the devaluation of the dollar.

The more dollars you have chasing the same amount of goods and services, the higher the price. A dollar has no intrinsic value, it's just how many there are, divided by the amount of goods and services it applies to. The big advantage of the USD over other currencies is its world reserve status or "use our money OR ELSE YOU FUCKING TERRORIST DON'T EVEN THINK ABOUT IT MOTHERFUCKER" which means it's applied to a downright obscene amount of goods and services.

[–]DragonerneJesus is white 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (2 children)

divided by the amount of goods and services it applies to

I'd like to add "and the speed of transactions". Higher velocity of money means "more money" is available. Say everyone increases their spending, then shops will increase their income, and salaries will increase, and the higher spending can be supported and become sustainable, costs of things will increase with the new money available in the system.

Multiply 1.2 (120%) by itself 25 times. The total is 95.3...

Right, that seems obvious now.

If they want to pay back current debt through inflation, then how are they going to increase inflation? They are currently trying to lower inflation by increasing the interest rate.

[–]AlphixNational Socialist 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

I'd like to add "and the speed of transactions". Higher velocity of money means "more money" is available. Say everyone increases their spending, then shops will increase their income, and salaries will increase, and the higher spending can be supported and become sustainable, costs of things will increase with the new money available in the system.

The velocity of the currency is mostly dependent on the ratio of the amount of it in circulation with regards to the amount of goods and services it applies to. There are other modifying factors, but we aren't trying to textually modelize the entire monetary system here I think? Anyway, it's not a direct influence on inflation. It's more the other way around: very high inflation rates increase the velocity of money.

Multiply 1.2 (120%) by itself 25 times. The total is 95.3...

Right, that seems obvious now.

If they want to pay back current debt through inflation, then how are they going to increase inflation? They are currently trying to lower inflation by increasing the interest rate.

Yes, that is why I am stating that they expect de-dollarization of international trade to exert a heavy pressure downward on the purchasing power of the currency. Creating inflation is easy: print more money, lower interest rates (which is the same thing). Now they are raising rates, they could soften that downward pressure on inflation by printing more, but they are not. Therefore, they are expecting other major pressures on the currency. De-dollarization.

[–]DragonerneJesus is white 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (0 children)

Good analysis, I really appreciate your input.

[–]Nombre27 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (4 children)

Any thoughts on money being created from people's verified labour instead of borrowing? i.e. bottom-up instead of top-down. Seems like it would fix a lot of things. Obviously there would have to be some objective criteria as to what constitutes labor, e.g. videogaming isn't work it's leisure.

[–]AlphixNational Socialist 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (3 children)

Gill Bates has a patent (number "06 06 06") whereby nanotech is implanted into an individual and software can read exactly what the individual is doing at the moment, down to the microsecond and can mine a digital currency based on what they're doing. So you know that 0.6 second you took to rub your nose? Docked. That 1.5 second you took yawning instead of doing your job? docked.

It's not my cup of tea.

I think governments entering into partnerships with mining companies to obtain some of the mineral riches mined, in exchange for services or other things, and then converting that into gold and silver and using these as money is a time-tested system that has always worked.

But the biggest problem in our economies is the political systems. If true democracy existed - or national socialism although that is a pipe dream in this age of inclusiveness, these problems wouldn't exist.

[–]Nombre27 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (2 children)

That's not exactly what I meant but that is horrifying.

Imagine there was a public space in need of clean up so someone takes the initiative to clean it up, say it took 8 hours, so they get paid at a set rate for 8 hours of work.

I read Manifesto For The Abolition Of Enslavement To Interest On Money awhile ago and this line struck me as making a lot of sense compared to the parasitic system we're currently suffering under:

§ 9. Through intensive enlightenment of the people, it is to be made clear to the people that money is and should be nothing other than a voucher for completed labor; that while every highly developed economy of course has need of money as a medium of exchange, the function of money also ends with that, and in no case should money be lent a supramundane power to grow of itself by means of interest, at the expense of productive labor.

Why have we not already done all this, which is so self-evident, which must be regarded as the Egg of Columbus for the social question?

Because in our Mammonistic blindness we have unlearned how to see clearly that the doctrine of the sanctity of interest is a monstrous self-deception, that the gospel of the loan-interest that alone makes one blessed has entangled our entire thinking in the golden web of international plutocracy. Because we have forgotten and are deliberately kept in confusion by the omnipotent money-powers about the fact that -- except in the case of a few rich people -- the interest that seems so lovely, and is so beloved of the thoughtless, is completely offset by taxes. All of our tax-legislation is and remains, so long as we do not have liberation from enslavement to interest, only a tribute-obligation to big capital, and not, as we would imagine, a voluntary sacrifice for the accomplishment of labor for the community.

Therefore liberation from enslavement to interest on money is the clear motto for the global revolution, for the liberation of productive labor from the chains of the supragovernmental money-powers.

[–]AlphixNational Socialist 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (1 child)

Money as a voucher for completed labor says nothing about its quality and makes the issuer a likely problematic unit.

The solution has always been simple: get rid of the Jewish banking system. It is at the implementation stage that this meets with difficulties.

[–]Nombre27 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

makes the issuer a likely problematic unit.

Wouldn't that just be the state? Or do you mean the potential for fraud?

My thinking is that it would disempower those above and empower those below.

[–]Site_rly_sux 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

They're crippling themselves to enrich wall street.

The dirham is pegged to the dollar.

The Yuan - Dirham trading pair is pegged to the dollar.

Every related trading pair is pegged to the dollar

You cannot move country-sized amounts of money between these exotic trading pairs without capital

Basically they just built themselves a new monetary trading platform built on top of the dollar. Where they get to pretend there's no eurodollar happening....but every time their trade outlook improves, they have to buy dollars to stabilise

Guys this is like trying to start a wind powered vehicle company and insist that every vehicle in your supply chain be wind powered.

There's no capital stock. You have to tie your new company to the national gasoline network to even get the ball rolling.

This is not going to work out for them