The world is backing away from a reserve currency that’s issued by the government no one can trust. From Ted Snider at antiwar.com:
On March 20, Chinese President Xi Jinping met with Russian President Vladimir Putin in Moscow. In his article in the Russian media preceding the meeting, XI enthused that “China-Russia trade exceeded 190 billion U.S. dollars last year, up by 116 percent from ten years ago.” Though it has reached 190 billion US dollars, it is no longer all being traded in US dollars. In his article in the Chinese media, Putin said that “the share of settlements in national currencies” of all that trade “is growing.” 65% of that massive China-Russia trade is now being conducting in their Russian and Chinese currencies.
Though the US sees Russia and China as the largest threats to its position in the world, it is not just America’s enemies that are fleeing the dollar. Its closest friends have hinted at it too. Following his meetings with XI in China, French President Emmanuel Macron likely stunned and angered the US by calling for Europe to reduce its dependency on the “extraterritoriality of the US dollar.”
These calls for a flight from the US dollar are not merely economic, they are geopolitical. They are calls to reshape the world order by challenging US hegemony and advocating multipolarity. The monopoly of the dollar has not just assured US wealth: it has assured US power. Most international trade is conducted in dollars, and most foreign exchange reserves are held in dollars. That dollar dominance has often allowed the US to dictate ideological alignment or to impose economic and political structural adjustments on other countries. It has also allowed the US to become the only country in the world that can effectively sanction its opponents. Emancipation from the hegemony of the dollar is emancipation from US hegemony. The flight from the US dollar is a mechanism for replacing the US led unipolar world with a multipolar world.