Best of Dennis – What Happens When The World No Longer Wants, Or Needs US Dollars?
Guest Post by Dennis Miller at Miller On The Money
Best of Dennis…
Dennis is taking a break to rest, and will be back writing very soon. This article was a follow-up to last week’s Best of Dennis article. Posted originally on September 28, 2023, it is still relevant today.
What Happens When The World No Longer Wants, Or Needs US Dollars?
Chuck Butler and I recently discussed how government deficit spending, and monetizing the debt has caused a worldwide awakening. Inflation is killing the value of the dollar, and our creditors understand that.
But wait, there’s more! The interview continues….
DENNIS: BRICS used to stand for Brazil, Russia, India, China and South Africa. Global Research reports, Doomsday for the Buck? A Reserve Currency Is No Longer Needed.
Quoting Paul Craig Roberts:
“It was Washington’s economic sanctions against Russia, the theft of Russia’s central bank reserves, and the theft of Venezuela’s gold, not the conflict in Ukraine, that weaponized the US dollar and resulted in global realignment.
…. The US dollar is used as world money to settle imbalances in international trade, but the sanctions woke the world up to the risks of using the dollar.
Consequently, the BRICS suddenly expanded, (adding) Argentina, Egypt, Iran, Saudi Arabia, and the United Arab Emirates. The organization now contains essentially the entirety of world oil production and 40-45% of World GDP.
…. Saudi Arabia announced the end of the petrodollar when it began accepting payment for oil in other currencies. The BRICS are working out how to carry on trade among themselves without use of the US dollar, which in effect brings to an end the role of the dollar as world reserve currency.
…. What this means…is that the US will begin having financing problems for its large budget and trade deficits. As long as the dollar was the world money, foreign central banks kept their reserves in US Treasury debt.
…. The situation is changing. If…about half of the world’s population and 40-45% of world GDP cease using the dollar, the foreign central bank market for US debt shrinks considerably. Having offshored its manufacturing, the US is import-dependent.
Declining use of the dollar means a declining supply of customers for US debt, which means pressure on the dollar’s exchange value and the prospect of rising inflation from rising prices of imports.”
RT adds fuel to the fire:
“In terms of oil reserves, BRICS will also control nearly half of the world’s total, 719.5 billion barrels out of 1.6 trillion. If Venezuela, which has recently applied for membership, is accepted into its ranks, the group’s control will be even greater – around 65.4%. In comparison, the G7 group …. (The US, UK, Germany, Italy, Canada, France, and Japan) controls only 3.9% of known crude reserves.”
This is overwhelming; let’s break it down.
If others don’t want dollars, does that mean they won’t take foreign aid?
No, it will just cost the US more in exchange rate to convert dollars into Russian rubles.
If America cannot be completely self sufficient for all her needs then the people in charge have to go. This country should be forcing the removal of all illegal immigrants and all legal welfare immigrants. From Florida to Alaska American has everything needed to prosper and have her people living in freedom and plenty. The nasty four letter word has been ignored for too long, work.
The blogsphere has been inundated with “death of the dollar” posts in the past couple weeks. Maybe indicative of one-sided and crowded trade?
Answer to the headlines question: when the USD goes no-bid the US t-bond goes no-bid and the value of anything denominated in USD will approach zero.
This article is 5 months old. Has any of it panned out?
The demise of the dollar will take at the least a decade, and a viable candidate has to be found first. We replaced the British pound sterling and they survived, things will just cost more as currency exchange costs money.
Abstracting from the Commonwealth countries, whose allegiance to sterling was special, we show that the dollar overtook sterling already in 1929, at least 15 years prior to the date cited in previous accounts.– cepr.org
There was a great article that I read once, and unfortunately I never found it again. The basic premise was that a fiat currency fails in stages, and the dollar has already went through around 10 to 15 of those stages, with around stage 20 being hyperinflationary collapse.