Opinion: regional currencies pushing Dollar back
China and Brazil have signed an agreement on trade in Yuan and plan to expand co-operation. The oil-producing countries of the Middle East have also announced that they intend to make payments for raw materials in Yuan. In addition, each country is interested in strengthening its national currency, so the income of the American financial system will decrease. Doctor of Economics and Professor at the Belarusian State University’s Innovation and Entrepreneurial Activity Department, Valery Bainev, commented on the developing trend.
“This is the case. Otherwise, Washington would not be so alarmed today. After all, we can recall the system they have: the Dollar was secured by fear. We remember the ‘examples’ of Hussein and Gaddafi. The world understands that the United States is a global parasite, therefore – on seeing ‘the cudgel’ of the American armed forces – everyone is silent. The US currency is also called the petrodollar for a reason, since it is backed by Arab oil – from Saudi Arabia, the UAE and other countries. Recently, Beijing has produced the first currency blow for Washington: for the first time, a Chinese company bought gas from a French corporation for Yuan; approximately, 65 thousand tonnes of LNG were delivered from the UAE. In my opinion, this is a very eloquent example of the Dollar elimination. China is not just a highly developed economy now, but a real factory of technologies and innovative ideas. A political and economic model of the state structure adds authority to this country. China has actually ‘wrestled down’ the American financial and economic system,” the expert noted.
Meanwhile, the geography of the use of the Yuan, Rouble and Indian Rupee is expanding. That is, the Dollar is being squeezed out of the economies that claim leading positions in the coming decades. “Belarus and Russia have switched to mutual settlements in national currencies. China is very well promoting its monetary unit in trade. We should not forget also India, Pakistan, Iran and other states that are gradually switching to trading in national currencies,” Mr. Bainev added.
The use of other currencies in international trade will inevitably raise the question of pricing outside the American financial system: the consequence of this may be an acceleration of inflation in the United States, as the world market will begin to bring the Dollar in line with its declining status. Another problem is the narrowing of credit opportunities of the American state and companies. This situation may bury the American economic model based on constant credit expansion.
