It is becoming increasingly more common for the corporate media to pay attention to the dollar’s dying status as the world reserve currency. The media can no longer realistically ignore developments that ultimately chip away at the dollar piece by piece considering Russia, China, and Iran have become brazen about their intentions to erode the dominant currency in the not-too-distant future.
While Anti-Media has documented the decline of the dollar throughout the course of the year as a result of a number of significant geopolitical decisions, there is still one major elephant in the room that needs to be addressed. Once it is, it should shed some light on just how detrimental these recent developments are to America’s status as the global authority.
Just last week, it was reported that Russia and China would be seeking to link their national payment systems to counter rival Western alternatives.
“I think that the more financial instruments there are in the modern world, the more stable the global financial system will be,” Russian Prime Minister Dmitry Medvedev said at an event in Beijing. “The world needs a balanced system of financial relations, based on the use of different reserve currencies for different transactions. There should not be dominance by any single currency.”
At around the same time, Iran was urging similar action in a meeting with Russian President Vladimir Putin.
To anyone who has been paying attention, these developments are nothing new and arguably somewhat predictable. However, one should consider the statements these defiant states are making as they illuminate the real intention behind the decision to bring down the U.S. dollar.
“We can nullify US sanctions, using methods such as eliminating the dollar and replacing it with national currencies in transactions between two or more parties; thus, isolate the Americans,” Iranian Supreme Leader Ali Khamenei reportedly said.
Medvedev said something similar, albeit less direct, during the event in Beijing, stating:
“I think this has great prospects, which can allow to avoid problems that arise with the use of American payment systems. I am referring to Visa, MasterCard and others of the like.”
In other words, Russia, China, and Iran are seeking to find ways to nullify American-led sanctions. Russia, China, and Iran have all been on the receiving end of American sanctions for some time now. By trading in alternative currencies and creating a market for these currencies, China and Russia have kept Iran afloat during years of crippling U.S. sanctions.
Not too long ago, the Times of Israel reported that a Chinese state-owned investment firm provided a $10 billion credit line to Iranian banks, which will specifically use yuan and euros to bypass U.S.-led sanctions. This was merely the beginning of these countries’ efforts to undermine the U.S. dollar.
If these developments continue, Washington’s system of punishment through sanctions will become completely worthless. No longer will states be bullied into submission through Washington’s manipulation and control of the global markets. This means the United States may have no other means of threatening another state other than with direct violence.
As former MI6 officer Alastair Crooke explained:
“As economic sanctions are increasingly part of the West’s arsenal, those non-Western countries that are the target — or potential target — of such sanctions are devising a counterpunch: non-dollar trading. It would, in effect, nullify the impact of sanctions.
Whether in yuan or roubles, non-dollar trading — which enables countries to bypass U.S. claims to legal jurisdiction — will transform the prospects facing Iran and Syria, particularly in the field of energy reserves, and deeply affect Iraq which is situated between the two.”
This article is published under a Creative Commons Attribution 4.0 International license.