In January, President Donald Trump took to Twitter to denounce Pakistan’s commitment to fighting terrorism . Twenty-four hours later, Pakistan’s central bank announced that it no longer would use the U.S. dollar in international transactions, and would instead switch to the Chinese yuan.
Four months later, in response to the Trump Administration’s withdrawal from the United States’ nuclear weapons pact with Iran, the European Union announced that it would use its own currency, the euro, to pay for Iranian crude oil.
Earlier this month, Moscow and Beijing announced a plan to use their own national currencies in bilateral trade. Russian President Vladimir Putin told reporters that the move would “increase the stability of banks’ servicing of export and import operations while there are ongoing risks on global markets.”
The Trump administration’s bellicosity has combined with the volatility of the global economy to sharply accelerate what has become an international movement: ditching the dollar as the world’s reserve currency. When Trump was inaugurated, the greenback was used in nearly 90 percent of all international transactions; today that figure has dropped to roughly two-thirds , according to Shabbir Razvi, the director of International Finance Solutions Associates. As the economist Peter Schiff told RT recently: I think the world is in the process of trying to de-dollarize. Money makes the world go round, especially if you can print it
The prospect is an ominous one for a U.S. economy that many believe is closing in on perhaps the worst recession in history. International reserve status was closely tied to gold supplies and the British pound was the international reserve currency for all of the 19th century and half of the 20th—until the 1948 post-war conference In Bretton Woods, New Hampshire anointed the U.S. dollar as the primary currency for international trade.
When the Nixon Administration uncoupled […]