The fate of the world's currencies in the wake of the demise of the dollar. - page 80
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EU buries dollar - Russia invited to wake
Observing the information war waged by the US propaganda machine against any attempts to challenge the hegemony of the US dollar, one fundamental difference between Russia and the European Union cannot be overlooked: while Russia's "proprietary" de-dollarisation plan is still a secret, the European de-dollarisation plan (including its technical annex) was "leaked" to Bloomberg by pro-US European officials a week before its final adoption.
The situation is certainly humiliating for the European Union, but if this plan can be implemented, the U.S. will not be helped by the presence of quite a significant number of Uncle Sam's sympathizers in the European leadership.
Even if you discount the legendary sluggishness of the European bureaucratic machine, albeit very slow implementation of the anti-dollar scheme described in the European Commission strategy documents, will simply destroy the petrodollar system in its current form.
The remarkable thing about the European Commission's plan is that it will not work without Russia, which means that Paris and Berlin will probably have to slightly stifle their own anti-Russian impulses, for they will need Moscow's cooperation on a vital issue.
The European plan to de-dollarise and enhance the global role of the euro was clearly not written by politicians, but by financial practitioners. Perhaps European Commission President Jean-Claude Juncker, who has enormous experience of running a successful European offshore, the Duchy of Luxembourg, and understands the pain points of the dollar system, was personally involved in drafting it.
The main point of the program: European energy imports must be paid for in euros instead of dollars. This is necessary in order to protect themselves from sanctions and it is not necessary to guess whose sanctions EU leaders are going to protect themselves from. "The price of the energy issue is about 341 billion dollars a year, which is how much EU energy imports cost each year.
Moreover, the very issue of de-dollarisation is framed in the document as a matter of restoring "European sovereignty" - and this despite the fact that everyone knows how painfully Washington reacts to such rhetoric. "The recent challenges to the international system of rules and trade are a wake-up call in terms of the economic and monetary sovereignty of the European Union," the authors of the EU strategy argue.
The problem is that the tragic biographies of the two politicians who also tried to pull their countries out of the petrodollar system and regain "economic and monetary sovereignty" are still fresh in the world's memory - Muammar Gaddafi and Saddam Hussein.
Of course the Americans are unlikely (at least at the moment) to bomb Paris or Berlin, but why not organise a small coup or a colour revolution?
Because the European plan to fight the dollar is written by financiers, not politicians, it pays special attention to the market infrastructure needed to implement it, which becomes especially urgent under the conditions of Brexit, because Europe's main financial centre is leaving the EU together with Great Britain.
In essence, the proposal of the European Commission strategists boils down to the fact that it is urgent to create its own equivalent of the London Financial Center, literally from whatever materials are at hand, and adjust it to serve the future "nefteuro".
This will require launching its own oil trading floor (which simply does not exist now in the continental European Union, because almost the entire financial infrastructure for servicing European energy imports is in London), creating its own "backbone" oil futures contract to be traded in euros, comfortable conditions for hedging currency and interest rate risks in euros, and building a kind of "fully integrated" payment system, which includes an electronic payment system in the form of an exchange and a clearing house.
It is easy to see that, in fact, the EU is preparing for approximately the same sanctions that the Russian financial system is currently under and preparing for. Europeans are trying to create their own "SWIFT analogue" (though SWIFT is formally a European organization, but by and large it is controlled by the US) and their analog of MIR (probably only at a transaction processing level and not a new bank card brand), trying to prepare their banking system for cutting off dollar financing and access to the dollar system.
Translating this financial action into the language of diplomacy and military affairs, it is roughly the same as ordering EU ambassadors to the US to pack their bags and simultaneously put the air defences on alert on Atlantic shores.
It is clear that all of the above measures from the European Commission's strategic plan cannot be implemented quickly, but the very fact that they have been adopted indicates that the transatlantic conflict will only deepen and that the EU's top officials are setting themselves up for a long and very serious confrontation with the United States.
It should be noted that the entire European plan cannot work without the help of Russia, which is the key energy supplier to the EU. Brussels' dreamers of restoring European sovereignty are very lucky in the sense that, as Vladimir Putin rightly pointed out, "We have no goal of moving away from the dollar, the dollar is moving away from us.
This sets the stage for Russia's energy exports to switch to European currency: Russian oil and gas companies are already demanding that Western partners change the currency of their long-term contracts.
Given that, for the US economy and financial system, reducing the "dollar area" is in the truest sense an existential threat, a sharp US response is to be expected.
America will seek to blatantly punish those who try to deprive Washington of the "exorbitant privilege" (in the words of US economists), that is "the extraordinary economic advantages that the issuer country of the reserve currency enjoys in the global economy".
But it is precisely this American response that will improve relations between the EU and Russia, despite all the contradictions that exist.
Nothing brings us closer than a common problem in the form of an infuriated "Uncle Sam", who will demand that the global hegemony of the dollar be left alone.
Source: Pravdinform.
Author of the publication: Vadim Danilov
Unfortunately, no source or author is given,
the content is wishful thinking in broad strokes,
the sale of treasuries does not automatically diminish the dollar's role as a high-grade medium of account,
creation of a "proprietary financial instrument" that Kostin talks about is so far only in his imagination,
However, even if such an instrument is created, how would it be fundamentally different from the existing national bonds and indices?
Now about the translation of settlements into national currencies - this will have a significant impact when these same settlements will occupy a significant share of the global turnover,
Moreover, let's take a look at the charts of these currencies and see their great volatility ))))).
I will not talk about the ruble, just look at the depreciation of the lira in August and the rupee recently,
the parties to such arrangements are the first to jump on such settlements as soon as something happens,
it is no coincidence that they choose stable currencies for settlements, right? (contract denomination) - simply because no one wants to be suddenly on edge,
Further on in the text of the article we would like to note such characteristic embeddings:
"America's like a mean child". , "Americans will lose their current advantage", "...will refuse to submit to America's dictates", "they themselves want this collapse", "stock up on food" ...
well these are such phrases in general give away the whole essence of the article and the bias of the author (authors),
they have this crazy idea that America is evil and they should disappear, there is no rational basis for it and no in-depth research... as usual ...
One last thing: russia's trade turnover with china is about 70-80 billion, while the global turnover stands at 16-17 trillion for a second, feel the scale of the numbers as they say, and that does not include the financial sector,
other turnovers mentioned in the article I am too lazy to filter, but I think they are about the same, given that Russia's overall share of world turnover is about 1.5-1.8% somewhere ...
the authors should have consulted statistics before making such high-profile statements.
As for the evaluation of the article - I agree with you. The article is quite artistic, although the resource there is generally quite serious. I think it's a mix of Shulgin and Chepkova and various media articles on "burying the dollar".
But the process of the dollar losing its status of the world's reserve currency is due to objective economic trends, which do not depend on the wishes and actions of the leaders of the EU, USA and Russia. This is due to several parallel mutually reinforcing trends, which can be conventionally divided into two large blocks.
1. the rapid growth of the Chinese and Indian economies.
2. The problems of the US economy.
1. According to various estimates, China's GDP, in absolute terms, will exceed that of the US in the next 8-12 years. In the same period of time, India will come 4th in terms of GDP. In total, it will be a conglomerate with about a third of global GDP and a population under a third of the entire population of the planet. And if the surrounding satellites are included, up to 40% of both. Common sense suggests that the huge flows of goods/financials/services to be carried out here are unlikely to use the dollar. Most likely, the main currency of mutual settlements will be the currency of the largest participant, i.e. the yuan. Since many people will want to participate in this economic convoy, the yuan will gradually acquire the status of a global reserve currency. This process will be greatly accelerated after the Yuan, in 5-6 years, will receive the status of a freely convertible currency.
2. The problems of the U.S. economy are well-known and understandable - a growing national debt, deficit problems, an aging population - it is unknown and unclear what to do with them. For now, these problems are offset by the dollar's status as the world's reserve currency. As soon as this support begins to weaken - the problems of the American economy will begin to grow like an avalanche. Well, those trends towards the formation of dollar substitutes in the European Union, or even more so in Russia, due to the widespread use of US sanctions mechanisms, they certainly are pushing the dollar off the pedestal, but I think not significantly.
On the evaluation of the article - I agree with you. The article is quite artistic, although the resource there is generally quite serious. I think it is a mix of Shulgin and Chepkova and various media articles on "burying the dollar".
But the process of the dollar losing its status of the world's reserve currency is due to objective economic trends, which do not depend on the wishes and actions of the leaders of the European Union, the USA and Russia. This is due to several parallel mutually reinforcing tendencies which can be divided into two large blocks.
1. China's and India's rapidly growing economies.
2. The problems of the US economy.
1. According to various estimates, China's GDP in absolute terms will exceed that of the United States in the next 8-12 years. In the same period of time, India will come 4th in terms of GDP. In total, it will be a conglomerate with about a third of global GDP and a population under a third of the entire population of the planet. And if the surrounding satellites are included, up to 40% of both. Common sense suggests that the huge flows of goods/financials/services that will be carried out here are unlikely to use the dollar. Most likely, the main currency of mutual settlements will be the currency of the largest participant, i.e. the yuan. Since many people will want to participate in this economic convoy, the yuan will gradually acquire the status of a global reserve currency. This process will be greatly accelerated after the Yuan, in 5-6 years, will receive the status of a freely convertible currency.
2. The problems of the U.S. economy are well-known and understandable - a growing national debt, deficit problems, an aging population - it is unknown and unclear what to do with them. For now, these problems are offset by the dollar's status as the world's reserve currency. As soon as this support begins to weaken - the problems of the American economy will begin to grow like an avalanche. Well, those trends towards the formation of dollar substitutes in the European Union, or even more so in Russia, due to the widespread use of US sanctions mechanisms, they certainly are pushing the dollar off the pedestal, but I think not significantly.
1. China's economic growth is constrained by the level of global consumption of its products. If consumption in the US and the EU hypothetically declines (a parallel process to the actual weakening of the dollar), China will also collapse. The growth of India's economy is nonsense, as the level of corruption and the general level of development of the population does not contribute to this in any way. Just read the Indian equivalent of Star Wars and translate the emotion gained into "India's economic growth".
2. The problem with the US economy is that it has moved production out of the country, as a consequence the copying of technologies without royalties has taken place. The topic is uncomfortable because China has got the technology and it is at the same time a trading partner. With telephones they have already started to show the rules of the game, no problem, you do not want to comply with the rules - the US market is closed to you both for your goods and for obtaining technologies.
3. You have to understand that the U.S. has already gone through an overproduction crisis in the 1930s (with food and industry) and still survives. China now has a similar problem but with the growth of robotic manufacturing - people are simply not needed, where do they go to work? If you don't feed them, they will go on the rampage.
1 billion people in China and 1 billion people in India are not needed in today's economy, but they still have to be fed. And there's another 0.5 billion population in Pakistan.
____________
The problem with the US is that it is a self-sufficient country in terms of technology and food, and there are plenty of freeloaders in the world.
1. China's economic growth is restrained by the level of global consumption of its products. And the US and EU consumer, if US consumption drops hypothetically (a parallel process to the actual weakening of the dollar), then China will collapse too. The growth of India's economy is nonsense, as the level of corruption and the general level of development of the population does not contribute to this in any way. Just read the Indian equivalent of Star Wars and translate the emotion gained into "India's economic growth".
2. The problem with the US economy is that it has moved production out of the country, as a consequence the copying of technologies without royalties has taken place. The topic is uncomfortable because China has got the technology and it is at the same time a trading partner. With telephones they have already started to show the rules of the game, no problem, you do not want to comply with the rules - the US market is closed to you both for your goods and for obtaining technologies.
3. You have to understand that the U.S. has already gone through an overproduction crisis in the 1930s (with food and industry) and still survives. China now has a similar problem but with the growth of robotic manufacturing - people are simply not needed, where do they go to work? If you don't feed them, they will go on the rampage.
1 billion people in China and 1 billion people in India are not needed in today's economy, but they still have to be fed. And there's another 0.5 billion population in Pakistan.
____________
The problem with the US is that it is a self-sufficient country in terms of technology and food, and there are plenty of freeloaders in the world.
Well, I don't even know what to write in response to your comment. The free flight of your thought, not too bound by the conventions of logical-factual paths, is contemplatively confusing...
In case you were wondering, India's growth rate in recent years has exceeded that of China, the recognised leader among major economies. And there was a great depression in the US in the 1930s, just for the record.
.................
3. you have to understand that the US already went through an overproduction crisis in the 1930s(with food and industry) and still live on. China is now experiencing a similar problem but with the growth of robotic production - people are simply not needed, where can they go to work? If you do not feed them, they will go on the rampage.
.................
Well, I don't even know what to write in response to your comment. The free flight of your thought, not too bound by the conventions of logical-factual paths, is contemplatively confusing...
In case you're wondering, India's growth rate in recent years has exceeded that of China, the acknowledged leader among major economies. And there was a great depression in the US in the 1930s, well that's just saying.
Try thinking for a start. India does not have an adequate national economy (and with over 90 different branches of language it is problematic), it is a country from which everyone else is feeding (historically) and making efforts to keep feeding further.
...
The problem with the US is that it is a self-sufficient country in terms of technology and food, and there are plenty of freeloaders in the world.
no, the US problem is different, it is this:
India does not have an adequate national economy (and with more than 90 different branches of language it is problematic), it is a country from which everyone else feeds (historically) and is making efforts to keep feeding further.
The US is the world's freeloader, but there is a limit to everything...
Technology? All the technologies they have are either stolen (absorbed, taken away), or imported from other countries (Germany for example), or borrowed from immigrant runners (Pentkovsky, as an example, and many others).
US dominance is not due to technology, but solely due to the presence of a machine of currency, which is the currency of other economies. They do not bear any of the costs that other countries are forced to bear in this regard.
There is a realization in the world that the normal functioning of local economies is not possible without mutual settlement in national currencies.
A small illustrative example is Poland. Locals took out loans in euros (because the interest rate is low) and bought a lot of housing, euro increased by more than 2 times, and? - Now people can't sell their flats (no one buys expensive flats in zloty) and it's very difficult to pay debts..... Everyone who uses currencies other than the national currency for their payments suffers the same way (individuals in particular and countries in general).
No, the US problem is different, this one:
The US is the freeloader of the world, but there is a limit...
You must be writing from a computer/phone/tablet that has nothing to do with US intellectual property? In the last 100 years, literally the US fed the USSR and Europe after WW1/revolution, sold the USSR factories and engine production, fed the UK when Hitler pistol-whipped it, poured into post-war Europe for reconstruction, made an Arab state a fairy tale amidst the desert. Oil is different from "just add manganese". Where would Europe be now if the US hadn't cut off a chunk of it from the USSR after the 41-45 war? Where is Japan now? Can you provide any values as an alternative to them other than "clashnikoff" and "macaroni/paint fences"? Didn't the USSR take anything out of Germany? What technologies did the US steal and from whom - the first Soviet 1in1 processor from the Intel (in circuitry) was on display in Germany and nothing. What technology is being stolen now and from whom? First reactors with metallic coolant - USA, first actual quantity of nuclear fuel - USA - nuclear technologies were stolen in favour of USSR, agents (family couple) were executed. Babayan (elbrus) held out to the last and joined Intel himself. (The USSR and Russia ruined the birth of their computer industry four times over).
It's just that the "kids" are getting older and trying to sway.
No, that's not the problem with the US, that's the problem:
The US is the world's freeloader, but there is a limit to everything...
Technology? All technologies that they have are either stolen (absorbed, sued), or imported from other countries (Germany for example), or borrowed from emigrant runners (Pentkovsky, as an example, and many others).
If you remember that Anglo-Saxons are ancient Germanic tribes of Angles and Saxons, then by that logic, they stole from themselves :)
It should be understood that the USA is not only the USA in the literal and figurative sense, if you take the nationality. It does not matter where they decided to build the central house
Homo sapiens also ate Neanderthals, not because they were smarter technologically but because why not
And if you remember that the nobility and tsars married their younger children to their foreign equals, then you get that all flocked to the Freemasons!!!! ))) - just kidding!
regarding the subject, alas, 100 years ago or 1000 years ago or now the stronger is right and the smarter is right! - If the Amerks have been "whacking" half the world for years... Alas, they are stronger or smarter. You have to admit the obvious sometimes and not live for slogans.
ZS: Maksim made up his post, this is what I am writing as well ;)
The chpokolka has not grown up to poke and prod everyone... but to do their business exclusively with other people's hands.
But that's not what this thread is about.