The Rising Resistance Against the US Dollar Hegemony

The US dollar, which has been the benchmark for investors, market players, and stakeholders in global trade for centuries, is now facing resistance from a new economic "gang" attempting to challenge the status quo.

Resistance against the hegemony of the US dollar, particularly, became apparent when the BRICS nations planned to create a new payment mechanism in April 2023. BRICS comprises Brazil, Russia, India, China, and South Africa.

Russia, already at odds with the United States due to the Russia-Ukraine conflict, has voiced its support for this initiative. The new payment mechanism will be backed by gold and other commodities, including rare earth elements.

The desire to use alternative currencies within BRICS has been discussed since 2009 but hasn't been implemented yet. However, Western sanctions imposed on Russia after the Ukraine conflict reignited discussions on this issue.

Apart from BRICS, the dedollarization issue has gained attention as several countries reportedly started reducing their dependence on the dollar. One such example is the US ally, Saudi Arabia.

Reports suggest that Riyadh is actively engaged in discussions with China regarding the use of the Yuan to purchase oil. The Wall Street Journal reported that these discussions have been ongoing for the past six years.

However, Saudi Arabia's dissatisfaction with the US's security commitments to the kingdom over several decades has intensified discussions with Beijing. It was reported in the same month that US President Joe Biden did not see eye to eye with Saudi Arabia's de facto leader, Crown Prince and Prime Minister Mohammed bin Salman (MBS).

"Saudi Arabia is angry at the lack of US support for their intervention in the Yemeni civil war and at the Biden administration's efforts to reach a deal with Iran over its nuclear program," the media outlet quoted sources at the time.

At the same time, dedollarization issues have heated up between France and China. President Emmanuel Macron once met with President Xi Jinping, where Macron stated that Europe should reduce its "dependence" on the US.

Macron emphasized the concept of "strategic autonomy" for Europe, which might be led by France to become the third superpower.

Is the US Doomed by 2030?

This dedollarization fervor is also complemented by the famous prediction of US author Alferd McCoy, who foresaw the fall of the American "empire." He made this prediction as early as when Donald Trump became President.

McCoy suggested that Trump's election was a symptom of America's decline, accelerating its downfall. He claimed that America's century-long reign might fade away by 2025 and could end by 2030.

He blamed decades of growing deficits due to "incessant wars waged by the US in distant lands." He predicted that by 2030, the US dollar would lose its status as the dominant global reserve currency, marking the decline of its imperial influence.

This change would lead to a dramatic increase in import prices for America. Travel costs for tourists and US troops abroad would also rise.

"As a fading superpower unable to pay its bills, America would then be persistently challenged by powers like China, Russia, Iran, and others to dominate the seas, space, and cyberspace," said the author of "The Politics of Heroin."

The Emergence of a New Currency King

The issue becomes more intriguing as Unherd columnist Thomas Fazi also highlights the collapse of the US's Marshall Plan. The document served as the "key" that kept the US dominant for the past 75 years.

The Marshall Plan, signed into law by President Harry S. Truman, saw Washington send billions of dollars in economic aid to help rebuild Western Europe after World War II. It laid the foundation for a mutually beneficial alliance, as the US offered decades of economic prosperity and military security to Europe.

However, the current situation is different. Fazi argues that under President Joe Biden, America is pursuing isolationist economic policies and rigid foreign policies, contrary to Europe's vital interests.

Europe is experiencing a massive decline in industrial production, while governments are forced to pay hundreds of billions of euros in energy bills as a result of their decisions to follow the US's strategy in Ukraine due to the Russia issue. Riots break out in countries like France, citing inflation and wage increases.

"In this context, why should Europe remain anchored to the US?" he asks.

He also mentions that the conflict in Ukraine has accelerated the emergence of a new international order, where American dominance has lost its appeal.

US actions in Ukraine have brought together its two biggest enemies, Russia and China. Together with India, Saudi Arabia, Turkey, Brazil, South Africa, and dozens of other countries, they have formed a dynamic trade bloc, of which the US is not a part.

"In just the last few days, two significant events have given further impetus to this trend," he illustrates.

"Brazil and China reached an agreement to trade using their own currencies instead of the US dollar. Meanwhile, the Chinese national oil company CNOOC and French TotalEnergies completed the first LNG trade in China settled in yuan," he adds.

"All of this points to the increasing isolation of the US from the rest of the world and a dramatic decline in its influence and ability to extract resources that can then be distributed to its protectorate states," he concludes.

"In other words, America's Marshall Plan is gone, and in its place, China hopes its Belt and Road Initiative (BRI) will become the new economic engine of the post-Western bloc."

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