Countries across the planet are seeking alternatives to the US-dominated financial system. However, former President Donald Trump has pledged that, if he returns to the White House, he will punish nations that de-dollarize.
“We will keep the US dollar as the world’s reserve currency”, Trump promised at a campaign rally in Mosinee, Wisconsin on September 7, 2024.
“It is currently under major siege. Many countries are leaving the dollar”, the Republican presidential candidate lamented.
“They’re not going to leave the dollar with me”, Trump insisted. “I’ll say, ‘You leave the dollar, you’re not doing business with the United States, because we’re going to put 100% tariff on your goods'”.
Trump vows: “I would not allow countries to go off the dollar”
Trump made similar remarks in an interview on CNBC’s “Squawk Box” on March 11, 2024.
“I’m very much a traditionalist. I like staying with the dollar”, he said.
“I hate when countries go off the dollar. I would not allow countries to go off the dollar”, the Republican presidential candidate pledged.
If the United States lost its status as the issuer of the global reserve currency, he argued, “that will be like losing a revolutionary war. That will be, that will be a hit to our country, just like losing a war. And we can’t let that happen”.
“Too many countries now are fighting to get off the dollar”, Trump complained.
Bloomberg reported in April that Trump and his economic advisers are crafting policies aimed at punishing countries that de-dollarize, with threats of tariffs and sanctions.
“Discussions include penalties for allies or adversaries who seek active ways to engage in bilateral trade in currencies other than the dollar — with options including export controls, currency manipulation charges and tariffs”, Bloomberg wrote.
Trump already threatened blanket tariffs of “more than” 60% on all Chinese goods.
Donald Trump threatened that, if he returns as US president, he will impose 100% tariffs on nations that drop the dollar, cutting off their trade.
“I would not allow countries to go off the dollar”, he fumed.
China, Russia, & BRICS will keep de-dollarizing.
(Full video below) pic.twitter.com/PAwThSc21S
— Ben Norton (@BenjaminNorton) September 14, 2024
BRICS pushes de-dollarization
The global de-dollarization drive has received a big boost from the BRICS bloc, of Brazil, Russia, China, India, and South Africa.
China and Russia have de-dollarized more than 90% of their bilateral trade, instead using rubles and renminbi (RMB, also known popularly as yuan).
China and Brazil signed a deal to drop the dollar in trade, settling with yuan and reais.
Russia and Iran pledged to remove the middle man of the dollar from their bilateral trade.
Even the Association of Southeast Asian Nations (ASEAN) has made agreements to de-dollarize regional commerce.
All of these nations are instead using their own currencies to trade with each other, bypassing the dollar.
By far the largest economy in BRICS is China, which overtook the United States as the world’s biggest economy in 2017, based on International Monetary Fund (IMF) data, with GDP measured at purchasing power parity (PPP).
Today, China is the number one trading partner of the majority of countries on Earth. In just two decades, China’s share of global trade more than tripled, from just 4% in 2001 to over 14% in 2021, according to S&P Global.
As China’s economy has rapidly grown, and as its manufacturing abilities have advanced, it has also de-dollarized its international trade.
The United Arab Emirates has sold China gas in exchange for RMB, and Saudi Arabia’s minister of industry even said the oil-producing Gulf nation would be “open” to selling crude in yuan.
According to the IMF, as of 2023, slightly over half of China’s foreign receipts and payments are conducted in its own currency, the renminbi — a staggering rise in just two decades.
During a trip to China in April 2023, Brazil’s left-wing President Lula da Silva visited the headquarters of the BRICS New Development Bank (NDB), which is located in Shanghai.
The current leader of the NDB is the former president of Brazil, Dilma Rousseff, from Lula’s leftist Workers’ Party. She has vowed to de-dollarize the NDB’s lending, offering loans in the local currencies of members.
In a fiery speech at the BRICS bank, Lula declared, “Every night I ask myself why all countries have to base their trade on the dollar”.
To enthusiastic applause from fellow BRICS members, the Brazilian leader asked, “Why can’t we do trade based on our own currencies?”
Eric Arthur Blair
2024-09-14 at 15:43
Drumpf’s schoolyard bully whiny tantrum:
“if you don’t give me your pocketmoney, I will hold my breath until I am blue in the face!”
Rest of the world:
“knock yourself out, jackass!”
Prof Richard Wolff, during Drumpf’s last term, showed how Drumpf’s tariffs on Chinese imports backfired on the USA, worsening inflation. This will skyrocket if Drumpf tries the same thing again. What do you call someone who tries the same thing over and over again yet expects different results?
China makes high quality products at low prices and arguably saved the world from economic collapse and hyperinflation back in 2008/9.
Who will pay for the 100% US tariffs on Chinese imports? The US consumer. Unless the USA can substitute those cheap high quality imports with its own manufactured goods at the same low price immediately (duh), the US will face hyperinflation and domestic turmoil.
China’s exports to the USA represent only 3% of its global exports, ie insignificant (recent interview with Pepe Escobar).
The obvious consequence of the USA banning trade with non USD compliant countries is that the USA will not be able to export to those countries ie USA will sanction its own exports. Nor will the US be able to import from those countries, so no raw materials coming in from 85% of the non-US bloc world.
The myth of the USA being the world’s biggest oil producer will EVAPORATE because the fact is that the USA needs high value imported crude (presently obtained FREE by virtue of the US petrodollar) to extract low value US LTO which is/was a Ponzi scam based on fraud.
Saudi, UAE, Russia, Iran, Brazil, Kazakhstan, Azerbaijan, Algeria etc are among just a few BRICs+ and BRICs wannabe nations that will no longer export crude to the USA.
That, apart from the fact that many countries, especially China and even Saudi are rapidly getting rid their US Tbills/debt securities, which will cause USD demand and USD nominal value to plummet. This will force the Fed to increase interest rates, paralysing US domestic economic activity.
Result: all imports into the USA become even more expensive, more US hyperinflation, US economic paralysis.
Summary: The USA is faarked and Drumpf is a self faarking faarker.
Rob Roy
2024-09-14 at 17:57
Excellent comment. Thank you. What should also be mentioned is the Democrats want the exact same thing as Trump and will also sanction and rage and threaten in the same arrogant way. There are two other candidates on ballots. You don’t have to vote for either evil.
Eric Arthur Blair
2024-09-14 at 19:43
I was struck by Pepe Escobar’s comment that China’s exports to the USA was only 3% of total Chinese exports, which seems very low.
I tried to find that interview again without success so far.
According to this website, China’s exports to USA in 2023 were worth USD 427 billion https://www.statista.com/statistics/187675/volume-of-us-imports-of-trade-goods-from-china-since-1985/
ie 12.6% of total, since China’s total global exports were worth USD 3380 billion.
https://www.statista.com/statistics/263661/export-of-goods-from-china/
Adjusting for the artificial overvaluation of the USD, it is possible to regard the material value of exports from China to USA in 2023 to be less than 12% of total, which indicates the value of China’s exports to the rest of the world is more than 88%, making the USA relatively unimportant.
Perhaps Pepe was referring to total trade imblances, which would exclude the value of US tech giants like Facepoop and Goober, which bleed the coffers of many countries around the world, but have zero value in China.
JonnyJames
2024-09-15 at 10:55
Great articles and comments here. I wish more would see the facts as Ben, Rob and Eric point out.
The Bipartisan Consensus/Washington Consensus always continues, no matter what the outcome of Elections Inc. The Genocide of Palestine will continue, oligarchy, the housing crisis, health care crisis, environmental crisis, provocations of nuclear war will worsen.
Yet, millions of insouciant, gullible US denizens will go the the polls and undermine their own interests. It’s a case of collective Stockholm Syndrome with a dose of suicide-death-cult.
Portia
2024-09-16 at 11:31
U.S. tariffs on China went into effect on Sept 13, 2024.
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/september/ustr-finalizes-action-china-tariffs-following-statutory-four-year-review
“Economic analyses, including the principal U.S. Government analysis published by the U.S. International Trade Commission, generally find that the Section 301 tariffs have contributed to reducing U.S. imports of goods from the PRC and increasing imports from alternate sources, including U.S. allies and partners, thereby potentially supporting U.S. supply chain diversification and resilience. ”
After de-industrializing the West? Where is all this stuff coming from now?
I think this is about abolishing the sovereign State, and always has been. BRICS+ aren’t having it. The dollar’s role as a weapon of empire is over. Now our parasite will turn on us and swallow us whole.
Energieerhaltungssatz
2024-09-16 at 00:10
Quotes from the Nuremberg Trials (translated from German):
“As a result of the purchase of significant quantities of material goods of all kinds for many years without economic quid pro quo, a noticeable reduction in substance had occurred, which, in turn, was confronted with a very significant increase in the circulation of money and the issue of bank notes, which had led to increasingly visible signs of inflation, primarily a devaluation of money and a decrease in purchasing power.“ – Excerpt from the Hemmen report of 15. December 1944, written by Hans Richard Hemmen, Ministerial Director at the Federal Foreign Office in Berlin, Chairman of the German Economic Delegation of the “Armistice Commission”, also known as the “Economic Dictator”. Quoted during the afternoon session on 22 January 1946 of the Nuremberg Trials by French Prosecutor M. Gerthoffer.
Another quote by M. Gerthoffer during the same session (22 January 1946), which fits so well to the economic sanctions of the US “shadow” government, e.g. in Cuba: “If, on the one hand, the other German crimes, such as deportations, murders, executions, make us shudder with horror, then on the other hand, the crimes that consisted in the deliberate starvation of entire sections of the population are no less heinous.“
By the way, I heard that there was another assassination attempt on Trump, I did not even try to verify this information, but I am sure that all the people in Palestine, Russia, Syria, Venezuela, Honduras, Afghanistan, Iran, Libya, etc. are extremely worried and will immediately start an investigation.
Eric Arthur Blair
2024-09-16 at 06:39
Political economist Dr Jack Rasmus describes the true situation of the US working class: $18 trillion in private debt, median households spend 54% of their income servicing that debt, falling real wages, the $10 trillion fiscal stimulus injected by the US government during COVID ended up in the hands of the rich and with corporations, who put it into the stockmarket and FIRE sectors, grossly inflating the everything bubble which can explode anytime (derivatives are the worst).
https://podtail.com/podcast/the-critical-hour-1/scholz-coalition-crushed-in-german-elections-mass-/
from 1hr40min
No mention of any of that by Drumpf or Kama Kameleon.
Not to mention the $35 trillion in US public debt, mostly due to wasteful military spending, with the huge interest payments burdening the US taxpayer.
Not to mention multiple trillions more in unfunded liabilities, such as the promise of future worker pensions that will NEVER be paid.
Summary: the USA is faarked.
JonnyJames
2024-09-16 at 09:31
Another excellent reference Eric! : Jack Rasmus is great, he should team up with Hudson, Desai, Keen, Wolff and other honest economists to help dispel the misinformation and myths of Junk Economics. (He teaches at a university nearby where I used to live in California)
The public debt is issued in USD, as long as other countries accept and hold USD/Treasuries as reserve, the deficit spending will continue. The private consumer or “household” debt is a bigger problem in the US. Most US dwellers have become debt peons.
Eric Arthur Blair
2024-09-16 at 17:49
Hello JJ:
US public debt will ultimately blow back to affect every ordinary US householder…
As I previously mentioned by Prof Michael Hudson, the US government raises multi trillion dollar funding (for wars, for funding 800 overseas military bases, for overpriced duds eg F35s, etc) by issuing interest bearing T bills out of nothing which are then purchased by a variety of suckers who effectively fund US debt.
During the petrodollar (and PD recycling) days, that was mostly purchased and underwritten by OPEC, along with vassal morons like industrial Japan. China too got on this Ponzi bandwagon but are now bailing.
Who else bought the T bills? The US Fed, who then issued money out of nothing to send to the Treasury Department to fund US militarism, repayments to the Fed with interest to be shouldered by the US government AKA joe sixpack taxpayer*. Such government payments to the Fed (a consortium of private banks) are serviced by stealing from public fund allocations such as public health, infrastructure, education, social and disability services, libraries, parks etc etc.
As China, Saudi etc get rid of their T bills, an increasing proportion of such US debt will be borne by the US taxpayer resulting in further theft from publicly funded services and more austerity AKA poverty.
Summary: the USA is faarked.
*as pointed out by Michael Hudson, this is a private bankers SCAM because the Fed is utterly unnecessary: a publicly controlled Treasury Department working with a publicly controlled Central Bank can issue money directly without the intermediate parasitic Fed.
JonnyJames
2024-09-17 at 13:54
Of course, I fully agree with all that. But, as prof Hudson also points out: don’t forget the aggregate household debt, student loan debt. Yes, it’s all a giant Ponzi Scheme and ‘merkans are merely debt peons.
Eric Arthur Blair
2024-09-18 at 13:14
You are right
Eric Arthur Blair
2024-09-16 at 06:49
Dr Radhika Desai https://podtail.com/podcast/the-critical-hour-1/meta-censorship-admission-kamala-harris-first-inte/
from 1min 40 sec
Unaffordable housing and extortionate rents are plaguing all neoliberal capitalist economies today, especially the USA. Why?
The rich 1% and the vulture capitalist firms eg Blackstone, Blackrock have bought up residential housing as a speculative asset (the RE part of the FIRE sector expanding bubble), and US government policies ensure these asset prices will always rise (till the next planned crash).
Ordinary people lacking funds to purchase houses must rent, and high rental demand pushes rental prices through the roof.
Rich landlords who cannot get their high rental prices met, rather than lower rents, prefer to keep their properties empty because their investment property prices keep rising even when vacant.
Result: nationwide epidemic of homelessness where there are MULTIPLE empty rooms in vacant houses for each and every homeless person.
Summary: the USA is faarked.
Eric Arthur Blair
2024-09-16 at 07:27
https://www.abc.net.au/news/2024-07-28/nsw-sydney-ghost-apartment-blocks-towers-vacant-homes/104132070
Rubicon
2024-10-04 at 11:01
Very real points you bring out that the majority of US citizens are totally clueless about.
But let’s remember, these politicians know who their audiences are. Trump’s followers include the Very Wealthy, and the massively illiterate American commoners.
China is SLOWLY removing its $$ holdings in the US Treasury. Saudi Arabia-they’re playing a different game with $Billions in the US and in the EU.
As Hudson has pointed out, only about 38% of adult Americans can afford mortgages loans; unlike in the 70s-80s, about 70% of citizens could afford to do that because they had good paying jobs. Now, only the wealthy can afford such things.
Not sure that Americans are receiving “high quality” goods from China. Instead, they’re most LOW quality goods, marked up greatly by the US Middle Man.
Let’s face reality: the vast majority of US citizens won’t wake up to how they’re being ripped up. End result: even greater poverty and early deaths.
Eric Arthur Blair
2024-10-25 at 14:13
The mindset that China only makes cheap plastic toys is the outdated decades old mentality of a head-in-the-sand ostrich, similar to the idea that Japan only makes cheap plastic toys. Very stupid.
How is China dealing with an aging population? Small examples:
https://gpcsl.com/2024/10/15/robots-pave-the-way-chinas-unmanned-road-resurfacing-milestone/
https://www.impactlab.com/2019/08/18/autonomous-sweepers-keep-roads-clean-in-major-chinese-cities/
China itself has declared it’s focus to be on high tech, high quality, high earning technology especially renewable energy and “new energy” vehicles. The best and also affordable solar PV panels and electric cars and mobile phones are made by China and that has the Germs and robber barons like Felon Musk shit scared. If such high value items are unavailable to USAnians it is because of dumb self faarking US tariffs which are an inflationary tax on US citizens, trapping them in high fossil fuel polluting lifestyles. Response by China: knock yourself out Drumpf, we will trade with the other 87% of the world as you faarkers faark yourselves.
Summary: the USA is faarked.
Eric Arthur Blair
2024-10-25 at 16:32
“China is SLOWLY removing its $$ holdings in the US Treasury.”
…says Rubicunt.
“How Did You Go Bankrupt?”
“Two Ways. Gradually and Then Suddenly.”
– Hemingway’s protagonist in “The Sun Also Rises”.
Summary: the USA is faarked.