The US-led Western sanctions campaign against Russia threatens to chip away at the US dollar’s dominance as the world’s reserve currency, a top IMF official told The Financial Times.
Gita Gopinath, the IMF’s first deputy managing director, said the sweeping sanctions against Russia will lead to more countries making transactions in other currencies.
“The dollar would remain the major global currency even in that landscape but fragmentation at a smaller level is certainly quite possible,” she said. “We are already seeing that with some countries renegotiating the currency in which they get paid for trade.”
Since the sanctions campaign began, Russian President Vladimir Putin has taken steps to increase trade with the ruble. He said that Russia will stop selling gas to “unfriendly” nations unless they pay in the Russian currency. Moscow has also proposed to India to make deals in ruble-rupee-denominated payments.
Gopinath said that as more currencies are used in global trade, there will be a further diversification of the reserve assets held by national central banks. “Countries tend to accumulate reserves in the currencies with which they trade with the rest of the world, and in which they borrow from the rest of the world, so you might see some slow-moving trends towards other currencies playing a bigger role [in reserve assets],” she said.
Sanctions recently imposed by the US and its allies specifically targeted Russia’s use of the dollar and euro, so Putin’s move to increase trade with the ruble is not a surprise. Russia has been preparing to shield itself from Western sanctions for years, and the ruble has already recovered nearly all of its value since it crashed when Moscow first invaded.
Gopinath said that the dollar’s dominance will not be challenged in the “medium term.” But more global transactions made in other currencies can reduce the value of the dollar over time. President Biden has repeatedly warned that the sanctions will hurt the US and Europe as well as Russia.
OOOOOOOOOoooooooo….. Sad day…NOT!!!!! Dump your dollars NOW B4 its TOO LATE!!!!!!!! Before the selloff PLUNGE…. Nice self goal Bidennn…………
What a mess. I have seen it coming for many years. It can’t end well.
Biden is being told what to do by Rhodes Scholars so he is about to hit the wall.
Putin is being told what to do or how long to isolate etc by his staff of cancer specialists.
At least some good will come of these illegal sanctions
After sanctioning Russia by Deep Pockets, i.e., War Industrial Complex’s Slaves: U.S.A., & Associates, besides China, few other countries are also encouraging their trades in their own or through some suitable financial system, thus Crushing American $, due to West’s Own Stupidities.
“Stupidities” is a good word, idiocy is another…
It could be death wish
So, Biden always said that sanctions will hurt us.
Did he ever ask ifvwe ere OK with that?
The west has no issue of starving the western world to teach Russia a futile lesson.
We have starved to death 500,000 Iraqi children. Nothing new for the “indispensable nation”.
And that’s just the tip of the iceberg.
That is the cold, hard, tragic truth.
He looked at the surveys after the blitz of propaganda and saw 94% in favor of sanctions. And I recently seen a poll that said a majority of Americans wanted more sanctions and wanted Biden to be tougher on Russia. We have to stop kidding ourselves into thinking the majority of the people will ever get it. So sure, they are OK with that.
The majority of Americans have been indoctrinated into being useful idiots for the political establishment. Maybe their reeducation process is about to begin.
It’s called “tribalism”, the core anthropological axion of poli-sci.
That too.
If ignorance is bliss, Americans must be pretty happy.
I think it has now reached the point of “misery loves company”….
I’m looking forward to the company deciding, one by one, that the benefits that come with being in bed with the United States is just not worth the misery, and leaving for greener pastures.
You nailed it!
91 octane gas in Menlo Park, CA is $7.29 per gallon. Biden thinks that wasting the billions of gallons of reserves will keep the price of gas down is rather dumb. Prices will come down when the Seven Sisters decide to have them come down.
What a frivolous policy to use the reserves like that. And yes, it won’t work. Just the normal stupidity of government policy.
I am just amazed at how many people I know prefer to be ignorant of the truth. They actually resent it when I try to give them information that goes against the official narrative regarding Russia and Ukraine.
Sadly, another hard truth.
Yeah Wars, but who cares? I mean, Will Smith smacked Chris Rock! Let’s get our priorities straight here! 😉
I will bet that the Ivy League “Experts” who think that they are smarter
than the average person never saw this one coming. Joe Biden has
another failure on his hands the end of dollar dominance in the world.
Blowback and unintended consequences whenever hostilities occur. Definition of blowback: An unforeseen and unwanted effect, result, or set of repercussions
Russia Central Bank Announces Ruble Bound to Gold! 5000 Rubles per Gram. By pegging gold to the ruble, Russia has just wiped out the dollar’s clout from the world markets
There are experts who did. The other “experts” didn’t listen.
I will bet that the Ivy League “Experts” who think that they are smarter
than the average person never saw this one coming. Joe Biden has
another failure on his hands the end of dollar dominance in the world.
Blowback and unintended consequences whenever hostilities occur. Definition of blowback: An unforeseen and unwanted effect, result, or set of repercussions
Russia Central Bank Announces Ruble Bound to Gold! 5000 Rubles per Gram. By pegging gold to the ruble, Russia has just wiped out the dollar’s clout from the world markets
If de-dollarization happens, it will be a slow but steady process. Likely take 5-7 years.
It’s the timeline for WW3. 2028-2029.
the war party is addicted to war. let’s hope and pray that finally the war party gets discredited after 30 years of failure.
Sadly, the war party wants to go down with the ship.
Not far off the mark. We will go to major war to prevent the loss of the dollar as the main currency for transactions.
Once again, the U.S. has shot itself in its foot.
Sometimes I wonder, if we could aim a bit higher…
Donna, to the groin, or the head? 😉
Exactly!
We’ve already hit the head. The US economy is basically doomed.
Good one, Donna.
… better said, “Shot the goose that lays the golden eggs.”
The problem is it has so many feet to shoot and it can still walk or even run
The price of gold is being surpressed so that the bankers can load up. Then they will issue digital currency,wiping out peoples savings, government debt, and corporate debt, and create a new semi starvation welfare zombified state by guaranteed annual payments.
Without the “Carpet of gold or carpet of bombs” threat Bretton Woods would have died years ago. Iraq, Libya, Iran, and any other that threatened the US Dollar agreement were destroyed, individually or nationally.
Now that the dominance of the US military is a joke, watch all other countries move to trade deals in any currency that the parties agree on.
The NWO would like an single currency to replace the Dollar and keep Bretton Woods, preferring the SDR of the BIS, but having lived under single currency domination, Russia-China will not fall for it again.
US living standards are going to drop by at least 50% over the next few years.
Good luck.
Bretton Woods was ash-canned in ’73(?) when Nixon/Kissinger shifted from gold to petrol. Russia and much of the 3rd world are now recurring to the entire spectrum of exchange, from primitive (barter) to modern (Asian International Development Bank version of SWIFT), and hybrids in between on the way, it would be hoped, to an international labor based value.
Please try not to be stupid.
The fact that the dollar was no longer linked to Gold did nothing to change the basis that all international transactions were required to be denominated in US Dollars. This and this alone is what kept the US Treasury able to issue trillions of bonds and Bills maintaining a level of debt unprecedented in world history.
“All of the countries in the Bretton Woods System agreed to a fixed peg against the U.S. dollar with diversions of only 1% allowed. Countries were required to monitor and maintain their currency pegs which they achieved primarily by using their currency to buy or sell U.S. dollars as needed. The Bretton Woods System, therefore, minimized international currency exchange rate volatility which helped international trade relations. More stability in foreign currency exchange was also a factor for the successful support of loans and grants internationally from the World Bank.”
After ’73 the limit was removed but all trade and currencies were tied to the dollar value at the time of transactions.
They changed the basis but kept the body.
Approx 90% of world trade is conducted in Dollars. To this day all fluctuations of foreign currencies are denominated in Dollars. This is primarily because of a) the excess availability of “Dollars” and b) because if you don’t, then USA will punish you with sanctions and if that doesn’t work, bombs and assassinations.
The US will be destroyed when the world decides that Dollars are no longer dependable.
Since ’73 the dollar has been implicitly denominated in barrels of crude. The IMF floating exchange and interest rates are $ based as a technical factor, a convenient but arbitrary constant.
Only a bit over 60% of trade is in dollars. Held bonds and bank reserves have been obviated by US Treasury use of sanctions, massive fiducial forfeit.
There you go again.
Oil has been denominated explicitly in US Dollars. All commodity exchanges are handled in US Dollars.You have got it face about ass. The Petrodollars are dollars accumulated by oil exporting countries and has nothing to do with current prices or trading.
The world’s Central Bank’s reserve holdings are around 60% US and 40 % other currencies and SDRs.
“In the foreign exchange market, the dollar rules. Around 90% of forex trading involves the U.S. dollar. ”
That is because around 90% of actual trade is in Dollars. When you work in a Central bank, the daily exchange is set against the US Dollar and to go from Sterling to Yuan takes two calculations, as every Central bank sets it’s exchange rate against the Dollar as a standard. That way they do not have to issue exchange rates in 190 currencies each day.
This usage will decrease significantly over the next 2-5 years, maybe even quicker.
This is childish, … but, just one more try.
The dollar, because of (as you say) its wide distribution is currently the constant in conversion equations, but its rate is floating. It’s not a “fiat currency” nor a unique value (tho it still has considerable convenience), but one among many; all which subject to being dropped. Once upon a time it was backed by gold. In ’73 that changed to oil. Since it is as inconvenient to store oil in your wallet or safe as it was gold, banks use promissory notes. We are presently witnessing Russia, Venezuela, UAE, the world’s largest banks of oil, abandoning in whole or part dollar denominated trade. Your sophomoric money theory is blinding you to the significance of this potentially world shattering event.
I am afraid that you have not reached “Sophomoric” but are stuck in Somoronic.
“Fiat money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.”
EG Dollars.
Oil is not a world standard primarily because there is no standard “oil”. therefore oil is divided into the fields that it is extracted from. Brent, West Texas Intermediate etc. and each quality has it’s own price. Unlike Gold, Silver, Platinum etc where all ores are refined to the same standard.
The US Dollar is the standard not the oil.
“… abandoning in whole or part dollar denominated trade” this does not solely apply to oil but to all trade, and that is the issue.
World had a total export of 20,538,351,810.39 in thousands of US$. To this can be added a percentage for domestic consumption of say 40% giving approx $29 tr.
Oil trade was approx $2 tr.
Gold approx $500 bn
Petroleum Gas was the world’s 12th most traded
product, with a total trade of $217B.
So oil accounts for less than 10% of world trade, 90% of which is settled in Dollars.
Please tell me how many years you have worked as an expert consultant in a Central Bank.
My “Sophomoric” knowledge comes from 6 years in Central banks as an expert consultant and a further 6 years in International Settlements, specifically the implementation of SEPA.
So before casting stones, move out of your little glass house.
Banker expert: Fiat money is…backed by the gov’t that issued it.
Everyman: And what “backs” this gov’t?
Xprt replies, full faith & credit.
Evymn, Faith in what?
Xprt, The word of the gov’t.
Evymn, An inveterate liar and deal breaker?
Xprt, OK then, the gold in Fort Knox.
Evymn, There’s nowhere near enough?
Xprt, OK then, the petrol reserves in The Empire.
Evymn, But the oil patch is no longer subject to dollar dictat?
Xprt, OK then, the basket of internationally traded goods.
Evymn, OK, but why privilege the dollar? I can’t eat dollars, …heat my home?
Xprt, Coz it’s convenient and customary.
Evymn, And, should one find it otherwise?
Xprt, I have a gun, idiot.
Evymn, So first it was backed by a gold fetish, then a petrol fetish, then a gov’t fetish, then a convenient math fetish, only to end in a gun fetish and bluster? You’ve got the catechism by heart alright, but your theology of the blessed bourgeois long green, fiat money, is merely a bankers’ confidence trick, a sack-o-shit fetish.
You cannot read. You are the child who said the Dollar is NOT fiat currency and I demonstrated that Fiat currency is exactly what it is.
Instead of admitting that you made a mistake you go into flights of fancy.
Ah well (sigh),
And here’s me thinking I’d just demonstrated the gun backed dollar. The world’s wealth is stored in dollar instruments not because some high & holy US gov’t promise to back its value; but, from the surety the gov’t will destroy anyone who challenges its hegemony, as Hilary so relished in the example of Qaddafi you instanced. If that’s what you understand by fiat, “full faith and credit backing”, I must concede. But it’s not the conventional acceptation, ….
I wonder where you got that wonderful insight?
Oh yes now I remember.
‘Without the “Carpet of gold or carpet of bombs” threat Bretton Woods would have died years ago. Iraq, Libya, Iran, and any other that threatened the US Dollar agreement were destroyed, individually or nationally.’
–
“full faith and credit backing”, is as meaningless as “I did not have sex with that woman.”
Anyone who does not understand that it is just mumbo jumbo is an idiot.
”All previous attempts to base money solely on intangibles such as credit or government edict or fiat have ended in inflationary panic and disaster.”
Winston Churchill
Josiah Stamp, former Director of the Bank of England said:
“Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again.”
“However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.”
There you go again.
Oil has been denominated explicitly in US Dollars. All commodity exchanges are handled in US Dollars.You have got it face about ass.
Central bank reserve holdings are around 60% US and 40 % other currencies and SDRs.
With sanctions, wars and assassinations( Milosevic, Qaddafi, Saddam) the fraud banksters stole the gold of those countries.With coup these banksters robbed gold from Haiti assassinating its president and gorging his left eye find out where the gold was stored (This is a report).It is very funny to watch all those rascals talking about democracy freedom etc while the real aim is to rob those nations and confiscate their wealth.The same game plan is being tried in Ukraine now. Wait and watch if Putin can be eliminated so easily.I doubt it very much.He has been saying it starting with speech in Munich Security Conference back in 2007 that he would go to the last resort toprotect and preserve and the integrity of Russia. Can’t see if the handlers of Biden, Johnson and gang realise it
“Send lawyers, guns and money, the sh-t has (is about to) hit the fan!”
Aaaand MBS in Saudi Barbaria or the UAE hasn’t picked up their phones yet, have they?
Meanwhile Ruble (which is backed by commodities) is back up on a pre-war level, will do more than fine as the Eurofags practically is forced to nullifie their sanctions to buy it for their purchases….
Russia just need to assure that they still have their gold. Ruble will be stabilized
“Meanwhile Ruble (which is backed by commodities)”
“No official ratio shall be set between the rouble and gold or other precious metals.” — Article 28, Federal Law on the Central Bank of the Russian Federation
The Neoliberals are playing from the same tired old playbook. Reality hasn’t sunk in that the Eastern block is economically in much stronger position. This will not end well for humanity.
That’s the Idea…!
https://www.strategic-culture.org/news/2022/03/31/meet-the-new-resource-based-global-reserve-currency/
Also a big impact is the default on the safety of the dollar as a reserve currency. The high handed abuse of its status will severely limit that status in the future.
Maybe this is a “good cause.” Whatever, it will have this cost. There is a price to be paid.
It will limit the US government’s ability to spend without hyperinflating the currency.
They want hyperinflation,it wipes out debts and starves out the poorer masses.
Next, is deflation which kills everything.
The mice in our house packed up and left….
Apparently Gopinath from IMF didn’t mention the US stealing reserve assets from Russia, Venezuela and Afghanistan, actions which will greatly affect where countries park their reserve assets. This failure to recognize theft also illustrates how subservient the IMF is to Washington.
I mean they are freezing them, not stealing them.
Putin turned the ruble into rubble.
It is not reduction in dominance of the dollar. It is going to be the total elimination
Pepe Escobar, as usual, explains the new world economic order…
Meet the New, Resource-Based Global Reserve Currency
http://thesaker.is/meet-the-new-resource-based-global-reserve-currency/