10 Asian Countries Agree to Ditch The U.S. Dollar

Source: Beawiharta Beawiharta / Reuters / cfr.org  

Asean Briefing: ASEAN to Increase Local Currency Trade, Reducing Reliance on the US Dollar 

ASEAN members have agreed to increase the use of local currency transactions and push for a better regional payment connectivity, in a move that could be seen as a continuing shift in de-dollarization in the region. 

At the 42nd ASEAN Summit, held in Labuan Bajo, Indonesia, ASEAN members signed an agreement to push for better regional payment connectivity and the use of local currency transactions (LCT). The move is seen as the bloc’s strategy to transition away from established currencies used for trade, such as the US dollar. 

The US dollar has been king for global trade for decades. This is not only because the US is the world’s largest economy, but also because oil and most commodities are priced in US dollars. However, since the Federal Reserve embarked on its aggressive interest rate hike strategy, central banks of developing countries have been forced to raise their own interest rates to stem the sharp depreciation in their currencies.  

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WNU editor: Another sign that the U.S. dollar is losing its status as the world's reserve currency.

China's Yuan Is Rapidly Replacing The U.S. Dollar As the World's Reserve Currency

Move over, U.S. dollar. China wants to make the yuan the global currency. © Kim Kyung Hoon/Reuters  

Washington Post: Move over, U.S. dollar. China wants to make the yuan the global currency. 

Newsan, one of Argentina’s biggest home appliance retailers, imports most of its products from China. Until now, it was paying for fridges, TVs and parts in U.S. dollars, the currency of international trade. 

But last month, as part of a bid to relieve pressure on Argentina’s dollar-strapped economy, Newsan started doing something new: settling deals in Chinese yuan. 

“The yuan is becoming increasingly relevant as currency for international trade,” said Luis Galli, chief executive of Newsan. “But beggars don’t get to choose. This deal was born out of necessity.” 

Argentina’s economy is — again — in crisis. A drought has wiped out key agricultural exports, pushing the economy, already grappling with skyrocketing inflation, to the brink of recession.  

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WNU Editor: The US and its uncontrollable urge to pile on debt is only going to help China achieve its goal sooner rather than later .... Biden and congressional leaders to meet in debt ceiling showdown as McCarthy pushes for faster deal (AP).

Warren Buffett Discusses The Future Of The U.S. Dollar As A Global Reserve Currency

Watch this 13-year-old ask Warren Buffett and Charlie Munger about the future of the U.S. dollar. https://t.co/IycXbkDVmp pic.twitter.com/BzTdQG5uoP

— CNBC (@CNBC) May 6, 2023

WNU Editor: Aside from saying that there is no other currency that could replace the US dollar as the world's reserve currency, he then mumbles that we should be careful on not jeopardizing the advantage the US has with its currency because the consequences if the US dollar does lose its reserve status would be severe. 

Sighhhh .... 

This is not a reassuring answer from Warren Buffet.

The US Dollar’s Status As A Global Reserve Currency Is Accelerating

Photo Credit: The Cradle  

The Cradle: De-dollarization kicks into high gear  

The US dollar is essential to US global power projection. But in 2022, the dollar share of reserve currencies slid 10 times faster than the average in the past two decades. 

It is now established that the US dollar’s status as a global reserve currency is eroding. When corporate western media begins to attack the multipolar world’s de-dollarization narrative in earnest, you know the panic in Washington has fully set in. 

The numbers: the dollar share of global reserves was 73 percent in 2001, 55 percent in 2021, and 47 percent in 2022. The key takeaway is that last year, the dollar share slid 10 times faster than the average in the past two decades. 

Now it is no longer far-fetched to project a global dollar share of only 30 percent by the end of 2024, coinciding with the next US presidential election.

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WNU Editor: Before the Russia - Ukraine war I was predicting the demise of the US dollar as the world's reserve currency would only start to happen in two or three decades (or even more). I cannot say that now. The race to abandon the US dollar is accelerating, and I for one would not be surprised if the US dollar as the world's global reserve currency will be replaced by a basket of currencies (predominantly the Yuan and Euro) by the end of this decade. 

The US Dollar’s Status As A Global Reserve Currency Is Accelerating 

 De-dollarization explained by top currency economist Stephen Jen -- Business Insider  

Dominant US dollar faces challenge from emerging currencies -- AFP  

Dollar dominance could give way to 'tripolar' system with yuan and euro -- Markets Insider  

Visualizing The De-dollarization Of The Global Economy -- OilPrice.com  

In defense of the dollar -- Jay Newman and Meyrick Chapman (Politico.eu) 

Still More Fairy Tales of US Dollar Demise That Didn't Happen -- Mish Talk  

What Could Replace the US Dollar as World Reserve Currency? -- Merlin Rothfeld, Barchart

French Energy Giant TotalEnergies Makes LNG Deal With China That Bypasses The US Petrodollar

China is trying to have its currency, the renminbi yuan, replace the US dollar as universal means of payment in international trade. Reuters 

RFI: 'Petrodollar' at risk as TotalEnergies sells LNG to China in yuan 

Chinese and French energy companies this week finalised the first-ever deal on liquified natural gas (LNG) in China settled in the renminbi yuan currency. The trade, involving 65,000 tons of LNG imported from the United Arab Emirates, marks a major step in Beijing's attempts to undermine the US dollar as universal "petrodollar" for gas and oil trade. 

Yu Jin, the general manager of the China National Offshore Oil Company (CNOOC,) which closed the deal with TotalEnergies, says global resource procurement based on the yuan could "promote the globalisation of energy trading and build a more diversified ecology."  

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Update #1: China completes first yuan-settled LNG trade (Reuters) 

Update #2: Goodbye US Dollar: China, France Complete First LNG Transaction In Yuan (The Deep Dive) 

WNU Editor: I must confess that the speed at which the US dollar is being replaced as the global reserve currency is astounding. And as the above report reveals, even US allies are making deals bypassing the US petrodollar.

Indonesia Is The Latest Country To Move Away From The US Dollar And Western Financial Institutions

Plastic money: An employer supervises the printing of Bank Mandiri credit cards at the state-owned lender's headquarters in Jakarta in 2016.(Antara/Puspa Perwitasari) 

Indonesia Expat: Indonesian Government to Launch the Domestic Credit Card 

President Joko Widodo’s statement that he prefers credit cards used by the government to be issued by domestic issuers rather than foreign companies has been met with positivity from Indonesia’s credit card issuers. 

Executive Director of the Indonesian Credit Card Association (AKKI), Steve Marta said that the government should encourage the use of government credit cards that utilise local issuers and public credit cards. 

“It’s not only government credit cards but I think we should also have local credit cards one day,” Marta told CNBC Indonesia on Thursday, 6th March 2023. 

Marta stated that the banking sector’s credit card issuers would also endorse this measure, citing security risks associated with credit cards issued overseas, as highlighted by Jokowi’s comments about US sanctions against Russia during the Ukraine conflict.  

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Update: BI pushes ahead with domestic credit card to cut reliance on foreign ones (Jakarta Post)  

WNU Editor: Almost everyday I am reading a news report from a country or a foreign financial institution that has made the decision to minimize and/or move away completely from the US dollar. But in the West there is little if any coverage in the main stream media of these developments.

Has The U.S. Dollar Become An At-Risk Currency?

The ongoing global sanctions against Russia in the wake of its invasion of Ukraine may have rightly isolated Moscow, but they've also weakened the standing of the US dollar in the process. Shutterstock  

Jay Norton, NYPost: Why the US dollar has become an at-risk currency 

Everywhere you turn there’s chatter about the ongoing US economic sanctions against Russia. The Russian Central Bank, Russian banks, Russian companies, Russian oligarchs — and anyone caught helping them — have seen their fortunes entangled since Moscow invaded Ukraine just over a year ago. 

From Davos to Aspen, American Treasury officials tout the unprecedented scale and scope of this powerful economic weapon. 

And why not? The effort has been impressive. 

The US government task forces have beached scores of yachts, grounded planes, blocked hundreds of millions of dollars of central bank assets and cut Russian financial institutions off from the global SWIFT financial system. 

Sanctions are an ancient game: in 432 B.C., Athens crushed its rival — Megara — by banning their traders from Athenian marketplaces. 

 For the US government in the 21st century, economic sanctions aren’t merely second nature, they’ve become a central tool of foreign policy. More than 10,000 people and dozens of countries are subject to sanctions worldwide.  

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Update: NYP: The US dollar has become an at-risk currency (Mordern diplomacy).  

WNU Editor: A year before Russia's invasion of Ukraine I predicted that the US dollar will continue to exist as the global reserve currency for the next 2 to 3 decades (if not more). I do not believe this anymore. 

Money printing followed by massive spending has created a debt and inflation crisis that the US shows no signs of stopping. Coupled with a sanctions war against the resource super power of the world (Russia), and the start of a sanctions war against the world's manufacturing super power (China), I do not have hope that the US dollar will continue to dominate as the world's leading currency. I now give it 5 to 10 years, and maybe less.

Will Countries Cut Dollar And Euro Reserves In Response To Financial Sanctions Against Russia?

Zero Hedge: IMF Warns Countries May Cut Dollar Reserves In Response To US Sanctions Against Russia 

Did the IMF just parrot one of Russian President Vladimir Putin's favorite criticisms of Western sanctions? 

During an interview with Foreign Policy, the IMF's first deputy managing director, Gita Gopinath, warned that Western sanctions on Russia, and more specifically, the confiscation of dollar- and euro-denominated reserves held by the Russian Central Bank, could backfire by making other foreign central banks more reluctant to hold such a large amount of their own foreign reserves in dollars and euros.  

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WNU Editor: Weaponizing the US dollar and Euro will have consequences. On that I have no doubt about it.This IMF official is just stating the obvious.

Russian President Putin Says The U.S. Is Killing The Dollar As A Reserve Currency By Weaponizing Sanctions & Uncontrolled Money Printing

© Sergei Bobilev/TASS  

RT: Putin says US itself killing dollar as reserve currency by weaponizing sanctions & uncontrolled money printing, fueling inflation 

Washington itself is undermining the US dollar as the world’s reserve currency by using it as an instrument of sanctions abroad, while raising the national debt and inflating at home, said Russian President Vladimir Putin.  

“It seems to me that the United States is making a very big mistake by using the dollar as a sanctions instrument... by preventing payment in dollars for the sanctioned products,” 

Putin told CNBC’s Hadley Gamble on Wednesday, after a panel at the Russian Energy Week.  

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Update: US making big mistake when using dollar as sanction instrument - Putin (TASS)  

WNU Editor: Amazing. 

Not only is Russian President Putin correct. But it looks like he is more worried about the state of the U.S. dollar as a reserve currency than most people in Washington.