Klaus Schwab and his globalist minions at the World Economic Forum (WEF) eyed the coronavirus pandemic to initiate The Great Reset, an international reshuffling of the global order. But the public health crisis may have merely planted the seeds to restructuring everything we have become accustomed to in this worldwide economy. Russia’s invasion of Ukraine might have been the true catalyst to redesigning the global monetary system that diminishes U.S. dollar hegemony. As rogue states attempt to chip away at America’s dominance, the question becomes: What happens next?
Rupees for Rubles
India has been slammed for considering purchasing Russia’s crude, natural gas, wheat, and a wide range of other commodities at a discount. The South Asian country has been starving for energy as it endures rolling blackouts and falling inventories nationwide. But the military conflict in Eastern Europe might have proven to be an opportunity for New Delhi.
The Reserve Bank of India (RBI) is working on a rupee-ruble trade arrangement with Moscow, the Financial Times reported. A senior banker close to the situation noted that India’s central bank was working with the government and state-owned banks to assess rupee-ruble payments and which financial institutions handle the exchange.
Sammy Kotwani, president of the Indian Business Alliance in Moscow, summarized the situation: “I can give rubles to [Russia’s] Sberbank and they can give me rupees in India.” Of course, this would perturb U.S. officials that are attempting to utilize sanctions to put an end to the war in Ukraine. But for countries frustrated by Western sanctions and currently reliant on the dollar, this is an opportunity.
China’s Moment: To Russia with Love
China has reiterated its position throughout the Ukraine-Russia saga: Beijing will not threaten its strategic relationship with Moscow. Despite echoing the West’s calls for peace in Ukraine, China continues to enable President Vladimir Putin by importing vast amounts of energy products and paying for his invasion of the nation’s western neighbor. Splitting with Moscow would also undermine the Chinese Communist Party’s (CCP) broader de-dollarization initiative.
Indeed, Moscow started the campaign to ditch the dollar by manufacturing a SWIFT alternative, settling transactions at Russian seaports in rubles, and engaging in currency swaps. China has been far more successful in its blitzkrieg against the dollar. Here is a brief list of what Beijing has done in the last few years: digitized the yuan, settled contracts in the yuan, made the currency ubiquitous in the Belt and Road Initiative (BRI), and created CIPS (the alternative to SWIFT and more successful than Russia’s SPFS).
The United States saw the writing on the wall last year. Liberty Nation reported at the time: “…leaders at the Treasury, State Department, Pentagon, and National Security Council are attempting to understand the implications of Beijing bolstering the digital yuan.” From the Trump trade war to Biden’s collective response to paralyze a national economy, everything occurring right now could be nudging and incentivizing China – and many other countries on America’s naughty list – to boost the yuan and kick the greenback to the curb.
Big Trouble in Little America
Dollar bears were roaring in laughter after The Wall Street Journal reported that Saudi Arabia is considering abandoning the greenback and accepting the Chinese yuan for oil sales to Beijing. The agreement would also see the petroyuan – yuan-denominated futures contracts – in the pricing mechanism of Saudi Arabian Oil Co.
While these discussions have been ongoing for several years, talks between Riyadh and China have intensified amid the Kingdom’s growing frustration with Washington. Nothing has been confirmed, but the yuan rallied nearly 0.7% against the U.S. dollar after the story was reported.
Officials familiar with these talks told the newspaper global dynamics had been altered. The sources stated that Saudi leaders were disgruntled over the White House’s nuclear negotiations with Iran and the administration’s lack of support over Riyadh’s military operations in Yemen. The government was also taken aback by the failure of the U.S. withdrawal from Afghanistan, the business publication reported.
Both nations would benefit from this measure. China, which imports 25% of its crude oil from Saudi Arabia, would see the yuan become more ubiquitous in transactions. Saudi would enhance its relationship with a government that has invested billions into Crown Prince Mohammed bin Salman’s broad array of infrastructure projects. This might also encourage other states to skirt the buck and begin pricing in other currencies, particularly when about 80% of international crude transactions are priced in dollars.
The Unintended Consequences
The coronavirus pandemic allowed the internationalists to fire off more bullets in their war on cash and pursuit of the digitization of the economy. However, based on recent economic events across the globe, the Ukraine-Russia squabble may have dissipated America’s superpower status. Vladimir Putin, Xi Jinping, Prince bin Salman, and a plethora of other world leaders have likely deconstructed the current U.S. administration. The only conclusion they could reach is that weakness and failure emanate from 1600 Pennsylvania Avenue, which explains why the world is testing Washington on every front. Be it energy needs or invasions, the anti-dollar axis is like a shark: It smells blood in the water.
The only thing the United States has in its favor is time. The dollar still represents about 85% of foreign exchange transactions, while the yuan accounts for a fraction of this percentage. In the end, perhaps Washington will employ a regime change conflict to shield the dollar system from external threats. Unfortunately, considering the internal menaces that have eroded the buck’s value, the only winners in this de-dollarization crusade are the Keynesian acolytes residing inside the fiat empire indifferent to sound money.
~ Read more from Andrew Moran.