Refusal of settlements in US dollars: what will happen to change the currency
The United States of America uses the US dollar as an instrument of dictatorship for us and for other countries.
A photo: REUTERS
I had a son. A new world order has been established on the planet. There are no more commonly recognized currencies for international trade. Each country has its own money. If you want Russian gas, pay in rubles, Indian masala chai – in rupees, Chinese sneakers – in yuan, American technology – in dollars, etc. e. I open my wallet in a dream, I pay banknotes in different currencies inside, so that for imported goods in stores. I wake up – what if a prophetic dream?
NOT BY BAKS ALONE
Like it or not, the throne of the world’s main currency under the dollar staggered. And there are several reasons for that.
1. Loss of trust
In March, Western countries in government with the United States froze almost half of the gold and foreign exchange reserves of the Central Bank of Russia – about $300 billion. What is most interesting is that such steps have already become a habit with the authorities. About $2 billion of Iran’s reserves were blocked in a US bank 20 years ago. Part of their reserves lost the Central Banks of Venezuela and medicine. Afghanistan said goodbye to its $7 billion last year.
2. Search for an alternative
Not wanting to be frozen, many countries that kept their “savings” in the currency of the currency decided to leave on their own. And they began to look closely at the alternative – gold. So, for example, the share of Russia’s gold reserves for each year. In 2018 – $ 77 billion, in 2022 – already $ 131.5.
3. Switching to other currencies
To further shake the dollar, Russia put forward conditions for European buyers: pay for our gas in rubles. Literally at the same moment, the Arab countries – oil suppliers – started an interest with China on the supply of energy resources for yuan.
4. Rise of cryptocurrencies
Many countries have already thought about the legalization of electronic money. And in El Salvador, for example, observations have already become the national currency.
“And yet, a dream is a utopia,” says Mikhail Belyaev, an expert at the Russian Institute for Scientific Research (RISI). – To take and turn away from the dollar is not so easy.
ADVANTAGES AND DISADVANTAGES
However, in the 2022 calendar, the dollar, US dollar, Russian position, but the lion’s share of world leaders (about 70%) is still valued in the currency of the currency. What’s the matter?
– Yes, it’s just very convenient, – Georgy Ostapkovich, director of the Center for Market Research at the Higher School of Economics. – The dollar is the maximum volatile currency (that is, its most stable exchange rate. – Ed.). Take, for example, the ruble. In 2013, the dollar cost 30 rubles, two weeks ago – 120 rubles. Four times higher! If you pay with the ruble, then there is no certainty that he will hold out. And the dollar constantly fluctuates within one percent.
Another plus is that different countries prefer to keep reserves in dollars. The same China has a money-box – more than a trillion bucks. Why are they not converted to yuan?
“Yes, because China has such colossal volumes of trade with America that it will not go anywhere,” says Evgeny Kogan, professor at the Higher School of Economics. – The Chinese are actively using American technology, and the Americans are the biggest consumers of Chinese products.
According to Georgy Ostapkovich, another advantage of the dollar is that it is a protective currency. Russia is in a crisis – Russians are buying dollars to save their money. The United States only benefits from this: the demand for the country’s currency supports its conditions, at the same time it allows you to print more money without the risk of supply, such is the law of the market.
Will the US authorities agree to change the situation? Of course not. And this is the main disadvantage of the current system.
– It is expected that the US dollar will be a tool of dictatorship for us and for other countries, – added financier Mikhail Belyaev. – And this shortcoming will accompany any country.
– It is necessary for some country to oppose the dollar, because its content immediately begins to threaten with threats. There are enough examples in modern history, – says Yevgeny Kogan.
Finally.
A photo: Dmitry POLUKHIN
WHAT IF YOU REFUSE?
– Sure, not a problem! – says Evgeny Kogan. – You can calculate in any currency, but there is a small problem – instruments in dollars are more profitable and more liquid.
We explain. Let’s say we sold oil to India and got rupees for it. Now we need to buy medical equipment in Germany, which requires payment in euros.
– Why does Germany need rupees? Ostapkovich says. – We lose on conversion. We can give rupees to the same India for some of its goods, but there is a nuance. There are very few Indian products in Russia. If exports in a particular country are equal to imports from it, then we can use the national currency. But if there is a surplus or deficit, then there is no point at all.
However, no less than in the United States, Russia partially accounts for non-dollar settlements. This is Turkey, the same India, Belarus, Kazakhstan, Armenia and Kyrgyzstan.
WHEN WILL HE LEAVE?
– For half a century she has been dealing with the issues of the American economy, – says Mikhail Belyaev, – and all these stories we are only talking about her funeral. She is still powerful. It differs from other countries in its elasticity and resistance (resistance. – Ed.), which allows it to renew packaging from crises. Understand: the strength of the currency is in the state of the domestic economy. Therefore, the dollar will not weaken even if a number of countries refuse it. It will simply serve a narrower section of international relations.
So maybe we shouldn’t weaken our attack on the dollar? Even if Russia “pushes” him a little on the international arena – well, let it be, it’s a pellet for an elephant, but we are pleased.
Georgy Ostapkovich abruptly interrupted my reflections and slowed down that the share of GDP in the world economy is 1.7%, the total share of the EU and the USA is about 60%.
– Who are we going to move? the analyst throws up his hands.
And now what? Did the dollar remain irreplaceable?
– So far, its serious competitor is the yuan, – says Mikhail Belyaev. – If England does not give up positions, another pound and, possibly, the yen and the Turkish lira.
The throne of the main world currency under the dollar staggered.
A photo: Ekaterina MARTINOVICH
BACKGROUND
And where, in fact, it all began? How did the dollar become the hegemon? In short, it was like this.
1944 The end of World War II is a foregone conclusion. During the voting, the town of Bretton Woods hosts a monetary and financial conference of representatives of 44 countries. The goal is to agree on new observations of international settlements. Until privileges in gold were received. The course for calculating the cost and the precious metal is set individually for each.
The conference participants decided that they needed one currency pegged to gold. During the war, the American dollar became, since during the war only the US economy (if we take the leading countries) suffered practically no losses.
This decision paid off. In subsequent years, the economies of various countries strengthened, international trade gained momentum, and investment increased. But the observed medals have been the growth of the hegemony of the dollar and the study of US state banks in other countries.
In 1976, a new conference was held in Jamaica, at which a decision was made to orient the dollar towards gold and move to floating rates. This communication to the currencies of other countries is strengthened. The International Monetary Fund has calculated that over the past few years, the share of the dollar in the International Reserve Management has ranged from 71% to 61%.
Economists do not exaggerate the euphoria over the abandonment of the dollar. First of all, because it is unrealistic.
– For the world to be without dollars, you need to forget that there is the United States, – says Evgeny Kogan. – And that won’t work. The lion’s share of world trade takes place using the dollar. And even if Russia leaves the settlement in dollars, the world will not turn upside down. Another thing is that at present many are switching to settlements in euros and the share of the dollar in the calculations of the fall. But not much. And our country will not be able to reverse the situation until it has the same technological economy as in the United States.