The dollar-based credit bubble is imploding, and emerging economies are seeking protection by accepting trade settlement in other currencies. The US policy of threatening regime change, currency destabilisation, or other means of ensuring nations remain in its sphere of influence are now failing.
Mainstream economists in the West insist the dollar is irreplaceable, and that as a trade settlement medium China’s yuan is strictly limited. Referring to Triffin’s dilemma, China would have to run deficits to provide the necessary currency liquidity. But they ignore the role of bank credit, which can be expanded at will to meet trade settlement demand.
Furthermore, China’s exchanges offer hedging facilities into physical gold, attracting Middle Eastern energy exporters away from petrodollars, until the new trade settlement currency planned by Sergey Glazyev comes into existence.
For evidence of Russia’s intentions to reintroduce gold into trade settlement, a translation of the semi-official position penned by Glazyev jointly with his deputy is appended to this article.
Increasing systemic risk in US, European, and Japanese banking systems is accelerating the movement of international trade settlement away from fiat dollars into safer havens. These are or will be ultimately backed by physical gold.
The world is changing before our eyes…
Quietly, informed opinion is beginning to accept that America has lost its global influence. Even Brazil, Argentina, and Mexico are openly planning for a future where their international trade will turn away from North America and Western Europe to an Asia firmly bound into the rules of China and Russia — rules that insist on evolving payments away from the dollar to their own currencies or into trade settlement currencies being planned.
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