US Dollar DOWNGRADED

Multinational investment bank Morgan Stanley downgraded the outlook for the U.S. dollar from ‘Bullish’ to ‘Neutral’ on Friday. The global bank cited that the Federal Reserve initiating interest rate cuts led to the decline of U.S. Treasury yields. Morgan Stanley’s outlook for the U.S. dollar is now officially ‘Neutral’ and downgraded from its previous stance of ‘Bullish’. The downgrade comes at a time when the BRICS alliance is advancing to uproot the U.S. dollar’s global supremacy.  READ MORE...

130 Countries Leave US Dollar

If the soon-to-be-released BRICS currency is considered a threat to the U.S. dollar, then the CBDC could be its death knell. Out of 195 countries in the world, 130 nations are moving towards building their Central Bank Digital Currency (CBDC). 

Therefore, 98% of the world is looking to launch their respective CBDC currency making it easier to settle cross-border transactions.

Among the 130 countries, a dozen nations have reached advanced phases and are moving towards launching their digital currency assets.

A total of 11 countries, including many Caribbean nations and Nigeria have already launched their CBDC pilot program. A report from the Washington D.C.-based think tank Atlantic Council shows that only 35 countries considered CBDC in 2020. 

The dramatic rise is putting the U.S. dollar in jeopardy as countries could end reliance on the greenback and consider CBDCs.

The BRICS alliance is looking to challenge the U.S. dollar’s global reserve status by launching a new currency for cross-border transactions. The next summit will be held in South Africa in August and the bloc will decide the formation of a currency.

If the BRICS currency strengthens itself in the global markets, more countries could flock toward it for international trade deals. Also, if the BRICS currency gains support in the markets, the U.S. dollar could be on the path of decline.

Therefore, both the yet-to-be-launched BRICS currency and the CBDC digital assets could pose a threat to the U.S. dollar. The greenback stands at a pivotal point in time where its prospects remain on the razor’s edge for survival.  READ MORE...

Partial De-Dollarization is Possible

The world could soon see the dominance of the US dollar start to wane, amounting to a partial de-dollarization of the global economy, according to JPMorgan, but that doesn't mean it's at risk of being replaced by a competitor like the yuan.

In a recent note, strategists at the bank explained that even if China's economy surpasses that of the US, it is still unlikely that the hegemony of the greenback would take much of a hit, and history suggests that any shift would happen at a glacial pace.

"While the US surpassed Great Britain as the world's largest economy in the latter part of the 19th century, the US dollar is commonly perceived to have overtaken the British pound as the world's foremost reserve currency only by the end of WWII," JPMorgan strategists wrote. 

"Historical experience thus suggests that if China were to overtake the US as the world's largest economy around 2030, dollar dominance may persist even into the second half of the 21st century."  READ MORE...

Ditching the US Dollar

BRICS countries are looking to sideline the U.S. dollar by launching a new currency to settle international trade. The development challenges the dollar’s supremacy and could dethrone it from the global reserve status. The move is inspiring other developing Eastern countries to ditch the dollar and promote their native currencies for global trade. If the momentum continues, many more Eastern nations could join hands and end reliance on the U.S. dollar completely.

The leaders of 10 Southeast nations and the members of the Association of Southeast Asian Nations (ASEAN) have agreed to promote their native currencies for cross-border transactions. The 10 countries will reduce settling payments with the U.S. dollar and use their local currencies for transactions.

The group of nations wants to “encourage the use of local currencies for economic and financial transactions.” The 10 nations that have decided to ditch the U.S. dollar are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

The move will help these countries to end their dependency on the U.S. dollar and significantly boost their native currencies. The declaration accepted by the ASEAN nations said that their goal is to strengthen bilateral and multilateral payment activities. Trading in local currencies would be faster, cheaper, and easier to close deals than the usage of the U.S. dollar.

The official declaration accepted by these 10 developing Eastern countries read, “We adopted the ASEAN Leaders Declaration on advancing regional payment connectivity and promoting local currency transaction to foster bilateral and multilateral payment connectivity arrangements to strengthen economic integration by enabling fast, seamless, and more affordable cross-border payments across the region.”

In conclusion, apart from BRICS countries, now ASEAN nations will move away from the U.S. dollar. It is reported that the Gulf Cooperation Council (GCC) is also planning to move in the same direction. Read here to know more details on why the oil-rich Gulf countries want to end the U.S. dollar’s dominance.

Push Against US Dollar

Countries around the world have embarked on an irreversible agenda to divorce from the US dollar, according to veteran investment guru Matthew Piepenburg.

In a new interview at the Deutsche Goldmesse conference with the Soar Financially YouTube channel, Piepenburg, partner at emerging markets-focused Matterhorn Asset Management, says that economic powerhouses are now clearly attempting to “break ranks” with dollar supremacy.

He says that the raising of interest rates by the U.S. Federal Reserve is pushing nations like China and Russia to adopt settlement systems that don’t rely on USD.

Besides China and Russia, which are both part of the BRICS coalition, the family office guru says that 41 other countries are now following suit, perhaps concerned with the way the US has treated Russia during its conflict with Ukraine.

“So when that dollar gets higher, because Powell is raising the rates, that becomes more onerous and painful for the rest of the world and they begin to break ranks. Asia in general, China and Russia in particular are very big rank-breaking nations. And, of course, they’re bringing 41 other countries alongside to have trade settlements outside the US dollar.

And so there’s no doubt that the weaponization of the dollar, even the petrodollar comes into this because there’s threats to the petrodollar market and the demand of the petrodollar and the strong dollar. So a strong dollar was a real gut punch for years it became even more of a gut punch when we weaponized that dollar when we took Russia off of the STR and the SWIFT and of course froze its FX reserves. Other countries raise their eyebrows in alarm and looked differently in our thinking of ways to go around and break with the dollar.”   READ MORE...

Fate of US Dollar

For many weeks, speculation has been circulating about the decline of the dollar, the currency of world trade since the end of the Second World War.

The U.S. dollar is in decline -- or at least such is the speculation that has been circulating this year.

These rumors are fed by various articles, starting with headlines saying that Russia is now considering using China's yuan for its global trade. Then talk followed that Saudi Arabia, a major U.S. ally, was considering charging in yuan for its oil exports to China.

Things accelerated: France was reportedly considering buying gas from China with yuan, while Brazil and Beijing were considering no longer using the U.S. dollar in their bilateral trade relations.

The avalanche of rumors about the demise of the U.S. dollar was such that some headlines said that the Brics countries -- an acronym for Brazil, Russia, India, China, and South Africa -- were considering developing a new reserve currency, while India was in the process of settling some trades in rupees.

All this news had a common theme: The dedollarization of the world economic stage was under way.

The greenback had lost or was in the process of losing its place as the top choice in world trade and finance, this theme suggested. It was circulating mostly among conservatives and critics of the policies of President Joe Biden's administration. The death of the U.S. dollar on the global stage was inevitable, they predicted.

The Dedollarization Narrative
This narrative is based primarily on the fact that in the aftermath of World War II, the U.S. gross domestic product accounted for almost half the world's GDP, a situation that placed the U.S. dollar as the main currency of global exchange, store of value and unit of accounting.

But the U.S. economy is no longer as dominant as it was, these critics say, so the reign of the U.S. dollar is also nearing the end.

For Elon Musk, Tesla's (TSLA) - Get Free Report CEO and, in his view, the global CEO, dedollarization is inevitable and the result of the U.S. using the currency as a weapon on the world stage.

One way the greenback is weaponized is the economic sanctions the U.S. imposes on other countries. Consequently, the billionaire entrepreneur says, other countries at some point will no longer want to use the U.S. dollar, to free themselves from dependence on America and its diktats.  READ MORE...

Saudi Arabia Will No Longer Use the US Dollar

The first lesson you learn in economics is there are always tradeoffs.

For instance, if your country announces it’s banning gas by 2035 it will force oil-producing countries to scramble in search of new alternative revenue streams.

Enter Saudi Arabia: they are breaking ties with the U.S. dollar and joining the China-led Shanghai Cooperation Organization, a massive trade bloc that trades in yuan.

Here’s the score if you aren’t keeping track:

• Crafting connections with China, a superpower rival to the U.S. ✅
• Creating a new financial system away from the dollar ✅

As their Crown Prince Mohammed Bin Salman recently told associates last year, “[we] are no longer interested in pleasing the United States.”

This is the biggest story of the year.
Was losing U.S. hegemony part of his plan?

Image from Wikimedia Commons

Yes. Of course.

The free ride of the dollar is over. The world can’t sustain it.

Since 1933, the U.S. dollar has lost 92% of its domestic purchasing power. It doesn’t help that almost half of global trade is based on this volatile gumshoes system.

It’s led to events like the British pound flash crashing against the dollar and now fucking the UK economy beyond repair:

• Rampant inflation (10.4%), which the central bank is not controlling
• Daily strikes in the UK as people aren’t getting paid enough
• Real estate is overpriced for mostly everyone forcing them to rent for the rest of their lives

Lost access to the EU economy through Brexit
But it wasn’t just Biden; the entire U.S. financial system — that led to the crashes of 2008, 2020, and 2023 — was ignored by both parties.

Americans think in quarter-long windows and take military and economic supremacy for granted. Countries like Saudi Arabia, India, China, and Russia are looking at the long-term picture, figuring out ways to reduce their reliance on U.S. dollars.

Was it self-sabotage or hubris that got America to its current state?

I don’t know, mate. But we’ve squandered our advantage, and now?  

READ MORE...

Stunning Collapse of US Dollar

(Kitco News) Markets need to pay closer attention to the de-dollarization trend since the greenback is losing its power as a reserve currency faster than many analysts are noticing, according to Stephen Jen, CEO and co-CIO of Eurizon SLJ Capital.

The dollar's loss of its reserve currency status accelerated last year when the greenback was used against Moscow as part of the sanction package after Russia invaded Ukraine. In 2022, the USD's share as a global reserve currency fell at ten times the average pace of the past 20 years, Jen said in a report.

"The dollar suffered a stunning collapse in 2022 in its market share as a reserve currency, presumably due to its muscular use of sanctions," Jen wrote. "Exceptional actions taken by the U.S. and its allies against Russia have startled large reserve-holding countries, most of which are from the Global South."

According to Jen's calculations, the greenback's share of official global reserve currencies dropped from 73% in 2001 to about 55% in 2021. And in 2022, it tumbled to 47% of total global reserves.

Coordinated sanctions against Russia alerted many countries, pushing them to seek currency alternatives — for trade settlements and reserve build-up.

"It seems reasonable to speculate that the main driver of the collapse in USD's reserve status in 2022 may have reflected a panicked reaction to property rights being jeopardised. What we witnessed in 2022 was sort of a 'defund-the-global-police' moment, whereby many reserve managers in the world disagreed with the conduct of both Russia and the U.S.," the note said.  READ MORE...

US Dollar Abandoned

As the BRICS nations have made their opinion on the currency known, more countries are moving away from the US dollar as a reserve currency. Moreover, the collective has recently expressed its desire to diminish the prevalence of the greenback within international trade.

Now, various figures are speaking out on both sides of the development. Specifically, Donald Trump took to his social media platform, Truth Social, to comment on the matter. Stating that the potential unseating of the US dollar’s dominance would be the “biggest defeat for our country in its history.”

As the BRICS nations have made their opinion on the currency known, more countries are moving away from the US dollar as a reserve currency. Moreover, the collective has recently expressed its desire to diminish the prevalence of the greenback within international trade.

Now, various figures are speaking out on both sides of the development. Specifically, Donald Trump took to his social media platform, Truth Social, to comment on the matter. Stating that the potential unseating of the US dollar’s dominance would be the “biggest defeat for our country in its history.”

Now, amidst these actions from the BRICS nations, more countries are moving away from the US dollar as a reserve currency. Importantly, the American currency is threatened by the rising prominence of China as an economic juggernaut. READ MORE...