It is no longer news that in the world of international trade and finance, a storm is brewing (for some of us who think the world doesn't spin and stop at the lands of the "free world" at least). The USD hegemony is gradually coming under threat. This is coming in the form of bilateral, multinational, regional, and international talks about the creation/adoption of a new single currency as well as the use of national currencies for international trade settlement.
Image Source: unsplash.com
In another theatrical display of international politics, an emergent observation is that the idea of the use of single currencies/national currencies is being pushed by traditional US rivals and surprisingly, some of its European allies. In a recent development, the UAE settled a gas deal in the Chinese yuan, a deal facilitated by Total (a French company). Seems like the joke is on the US.
However, it is worthy of note that, this struggle has been going on long before now, but crusaded by developing and under-developing countries, whose economies and people are used as sacrificial lambs to water and sustain the USD hegemony. But today, it is been championed by traditional US rivals who until now we're immune from the effect of the US using the Dollar as a tool of control and subjugation over them. This was a fate reserved for African countries, as well as developing countries in Asia and South America.
Over time, it seems to have gotten to the heads of those in Washington, who seem to have forgotten how the USD hegemony was established in the first place as well as the mechanics of its sustenance. Put simply, the USD hegemony was established through the gun and set up to sustain itself ( as long as the US continued to convince the world that they needed a stable currency for International trade and it had to be their dollar).
The US has constantly done a good job of peddling that lie. So much so, that they believe it has become the nitty-gritty of the fiber of everything international, hence no need for any further active effort at doing so. This can be seen in their actions against Russia in response to Russia's invasion of Ukraine. They probably didn't think about it well enough, but the decision to sanction Russia by cutting them off the dollar-international financial system was a grave mistake.
The decision (initiated and pursued by the US) to cut off a regional power from the international financial system has shown that those who have always faulted the system as a tool of control and subjugation by the West, led by the US, were not wrong. This action was also seen as an indirect attack by these nations, who in recent years have benefited greatly from the generosity of traditional US rivals like Russia and China, at a time the US is playing at controlling and dictating the internal affairs of these countries through threats and Greek gifts.
Another emergent observation is that Western politicians and financial experts are downplaying the emerging and evolving threat to this tool of control of theirs. I observe that it's probably a method of "Ignoring the problem, and it will die away". It smacks of Western propaganda during the era of the slave trade and colonialism. This is going to turn out to be another great mistake. But what do I know? I am not a financial expert.
The whole situation is not helped by the fact that despite the Western effort to isolate and cut Russia off from this International financial system, hoping that the whole Russian economy will come spinning to the ground in months, it has rather held well and even performed better than not so few European nations. If the world needed a practical example of how to beat the dollar hegemony, the West has given it one. Now the world has seen that it is possible to break the dollar hegemony and be better for it. The genie is out of the bottle and it ain't going back in.
The US is now caught in a dilemma of its creation. Keeping the course will have grave consequences for the dollar while changing tack will have great consequences for the US as a regional/world power, which will still end up being a disaster for the dollar hegemony. The propaganda of the USD being the only currency stable enough for International trade won't hold anymore, seeing as the world is learning that the seeming stability is not a cause but an effect of the dollar hegemony.
The developing nations are tired of being economic captives of the USD hegemony, and recent events have shown that the US is not the powerhouse its propaganda says it is. All these have combined to create a situation where they are more than willing to say "f*ck the US and its dollar". This is real, this is happening. The sooner we accept it, the better. A multipolar world is emerging both politically and economically.