With the Euro, the creation of BRICS, and China’s newest deal with Iran and Saudi Arabia, less countries are relying on the dollar to conduct global transactions.
70% of global trade is conducted in the U.S. dollar. This means that, around the world, there is a strong demand for the dollar. Country A buys the dollar from the United States to pay for products it purchases from country B. The constant rising value of the dollar worldwide slows the rate of inflation in the U.S. while it increases the rate of inflation in much of the rest of the world.
The dollar’s posture as the world’s primacy currency infuriated many countries with leading and emerging economies such as Russia, China, India, and Syria, to name just a few.
As such, in 1999, many European countries created the Euro as a common currency to counter the dollar’s rise in Europe. As they put it, the rise of the dollar improves the American economy, but it weakens the global economy as a result. With the Euro, the European countries prove that a currency that can be traded among several nations may be more powerful than the dollar.
Lately, China has taken similar steps to counter the dollar primacy in the global economy. With Brazil, Russia, India, and South Africa, it formed an international alliance called BRICS to shape global economic policies, promote financial stability, and bolster economic cooperation among them. Moreover, China has been making more big moves to integrate other countries into BRICS to bolster its vision of economic cooperation.
Practically, BRICS enters the geopolitical scene to build a more just and balanced international order that the United States will no longer dominate. Moreover, China extended its footprint by brokering an important trading agreement with Iran and Saudi Arabia. Note that Saudi Arabia is the world’s largest oil producer and exporter. The significance of that agreement is that China wants it to be a zero-based dollar or a Petro-Yuan deal so that the BRICS countries and other China allies will not use the dollar or they will simply use the Chinese Yuan to exchange products.
One can already see how China is seeking global dominance and how that China’s global dominance might affect the posture of the dollar worldwide. A declining dollar will compel America to re-enforce its instruments of national power through diplomatic ties, information gathering, and military readiness to protect and defend its interests.
In summary, the U.S. dollar is the primary currency used in global trade, giving a strong advantage to the U.S. economy. This has angered many countries with leading and emerging economies, prompting them to create the Euro as a counterbalance. China has also taken steps to challenge the U.S. dollar, forming an alliance with Brazil, Russia, India, and South Africa (BRICS) and brokering a trading agreement with Iran and Syria. This has led to worries that the dollar is losing its global dominance, and henceforth, the US must respond by reinforcing its instruments of national power, which are Diplomacy, Informational, Military, and Economy.
Bobb Rousseau, PhD
Host of Apostrophe Podcast
The dollar’s posture as the world’s primacy currency infuriated many countries with leading and emerging economies such as Russia, China, India, and Syria, to name just a few.
As such, in 1999, many European countries created the Euro as a common currency to counter the dollar’s rise in Europe. As they put it, the rise of the dollar improves the American economy, but it weakens the global economy as a result. With the Euro, the European countries prove that a currency that can be traded among several nations may be more powerful than the dollar.
Lately, China has taken similar steps to counter the dollar primacy in the global economy. With Brazil, Russia, India, and South Africa, it formed an international alliance called BRICS to shape global economic policies, promote financial stability, and bolster economic cooperation among them. Moreover, China has been making more big moves to integrate other countries into BRICS to bolster its vision of economic cooperation.
Practically, BRICS enters the geopolitical scene to build a more just and balanced international order that the United States will no longer dominate. Moreover, China extended its footprint by brokering an important trading agreement with Iran and Saudi Arabia. Note that Saudi Arabia is the world’s largest oil producer and exporter. The significance of that agreement is that China wants it to be a zero-based dollar or a Petro-Yuan deal so that the BRICS countries and other China allies will not use the dollar or they will simply use the Chinese Yuan to exchange products.
One can already see how China is seeking global dominance and how that China’s global dominance might affect the posture of the dollar worldwide. A declining dollar will compel America to re-enforce its instruments of national power through diplomatic ties, information gathering, and military readiness to protect and defend its interests.
In summary, the U.S. dollar is the primary currency used in global trade, giving a strong advantage to the U.S. economy. This has angered many countries with leading and emerging economies, prompting them to create the Euro as a counterbalance. China has also taken steps to challenge the U.S. dollar, forming an alliance with Brazil, Russia, India, and South Africa (BRICS) and brokering a trading agreement with Iran and Syria. This has led to worries that the dollar is losing its global dominance, and henceforth, the US must respond by reinforcing its instruments of national power, which are Diplomacy, Informational, Military, and Economy.
Bobb Rousseau, PhD
Host of Apostrophe Podcast