Written by – Elijah J. Magnier:
There is no doubt that the ongoing war in Ukraine has become explicitly an open battle between Russia and the US, where Washington exploits its financial, political and military capabilities- and those of its allies. These costly and substantial military and economic efforts aim to confront, weaken and eventually defeat Moscow. But the confrontation is not exclusively about the Russian challenge to the US dominance, which forbids the European nations bordering Russia from establishing further business and commercial ties (even those previously well-established with Moscow). Clearly, the US intends to prevent Russia (and China) from wearying down the US economy by weakening the dollar’s dominance in international world markets. Indeed, the US is fighting the attempt of financially powerful and resourceful countries to seek alternatives and solid alliances with other nations to eliminate the US monetary hegemony. This would weaken the effect of any “unilateral” US sanctions Washington’s administration adopts against countries that refuse to submit to its dominance.
Will Russia, along with countries such as China, India, Pakistan and Iran, achieve this goal to destabilise the US soft power and survive by finding an alternative to the US dollar?
The quick answer to the above question is that there is not yet a robust alternative to compete with the dollar, despite the existence of the European euro, the Chinese yuan and the Russian rouble, that occupies a slight advantage over the US dollar that it has enjoyed since the First World War. The dollar was, and still is, firmly entrenched since the end of the Second World War in 1944. It has replaced Sterling, which declined after England spent most of its gold reserves on the anti-Nazi war effort. In 1971, the US gave up its gold reserves to consider its currency the “currency of the world” for commercial and financial exchanges.
Since then, US debts have grown disproportionately. Nevertheless, these US financial obligations will never be repaid because the debt consists of its actual currency, which can be printed at any time and in abundance. This situation does not apply to other countries, who must pay their debt in dollars and submit to US policy or face sanctions and the US withdrawal of the dollar from circulation, which means that the local currency is sharply devaluated. This is precisely what has happened to many countries: Venezuela, Iran and Lebanon, to name but a few.
Subscribe to get access
Read more of this content when you subscribe today.
Proofread by: Maurice Brasher