Zero Hedge: For every action, there is an equal and opposite reaction. In the case of international trade and global payments, the U.S. made aggressive use of sanctions and tariffs. With some merit, Washington has argued that these actions level the playing field for global trade or punish bad global actors.
But a series of equal and opposite reactions are occurring as nations move to remove the role of the U.S. dollar at the center of global trade and finance. This will have a long-lasting structural impact in ending the dominance of the dollar as the world’s reserve currency.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT), the largest global payment settlement network, has already experienced drop-off in dollar transactions in its most-recent readings. Read More
Opinion: De-dollarization has been coming since the 2008-9 financial crisis. More and more we are coming to realize that the US mortgage crisis never really ended, but was instead covered over with trillions of printed money.
In his financial plan President Biden calls for:
- Providing financial education for the poor
- Raising the minimum wage to $15 per hour
- Creating pools of capital for the poor to buy homes
While providing financial education is plausible if actually executed, raising the minimum to $15 per hour will likely cause tens of thousands of small businesses to close, particularly in small towns and minority owned businesses.
Creating pools of capital for down payments on homes is a reminder of the 1977 Community Re-Investment Act, the same idea that caused the 2008-9 financial crisis. But since when does government ever learn from past mistakes?
De-dollarization will cause the nations of the world to sell dollars and buy whatever is deemed to be the next reserve currency. The most likely (temporary) candidate will be the basket of currencies or ADR’s, made up of the dollar, euro, Chinese yuan, and Japanese yen.
A Friday headline made all this remarkably timely for one of the ADR currencies:
SWIFT Sets Up Joint Venture With China Central Bank Ahead Of Imminent Digital Yuan Launch
China’s preparations to rollout a digital yuan gathered pace, and we reported in October that China was poised to give legal backing to the launch of its own sovereign digital currency, “cementing its trailblazer status in virtual currencies far ahead of other countries. read more
(SWIFT is an interbank financial network that provides safe and secure financial transactions for its member nations)
The Peoples Bank of China now leads the world in digital currency. If we play the tape forward it is not hard to imagine a game of catch-up for the Federal Reserve, Bank of England, European Central Bank and Bank of Japan to bring their own digital currencies and simultaneously kick paper money out of circulation. The stage would then be set for a cashless society and government control over global economy.
He causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads, 17 and that no one may buy or sell except one who has the mark or the name of the beast, or the number of his name.