Republican presidential candidate Donald Trump wants to lift all sanctions against Russia. Isn't it too late to save the dollar? Bitcoin's turn?
Olive Branch
Mr Trump said: “I myself used sanctions, but I lifted them as quickly as possible so as not to kill the dollar. […] The dollar must remain the international reserve currency. Failure would be like losing a war. We will become a third world nation. We cannot afford that.”
The former president is well aware that the world is working to bypass the Western monetary system. This is even a priority for the BRICS. Strong announcements in this regard are expected at the Kazan summit in October.
“You lose Iran, you lose Russia. China is trying to make its currency the dominant currency. You're going to lose the dominance of the dollar. It's happening. We're going to lose so many countries.”he added.
[A ce titre, ne manquez pas notre article : « L’internationalisation du yuan est foudroyante »]
On the other hand, Vladimir Putin prefers to support Democrat Kamala Harris in the presidential race. Some think that the Russian president is being ironic. Or not…
Indeed, foreign ministers around the world know that the 2014 US coup in Ukraine is the real origin of the war. They also know that US envoy Boris Johnson derailed the Istanbul peace talks that were supposed to bring peace just two months after hostilities began. To make matters worse, the West froze half of Russia’s foreign exchange reserves (~300 billion euros), disconnected banks from the SWIFT network, and stopped imports of gas and oil.
From there, Vladimir Putin decided to cross the Rubicon in the hope of triggering a global rebellion against the Empire. With success. His calls to let go of the main instrument of American power – the dollar – have not been in vain.
[Notre article : « La Russie plaide à New York pour la fin du monopole du dollar »]
The exorbitant privilege
The dollar has been the international reserve currency par excellence since the signing of the Bretton Woods agreements. These agreements stated that the dollar would be the pivot currency, that is to say the only currency freely convertible into gold, and against which all other currencies would float. And this thanks to the immense gold reserves that the Americans obtained in exchange for their support during the Second World War.
These agreements ended in 1971. After losing half of their reserves, the United States (Nixon) suspended the convertibility of the dollar. The greenback should have collapsed. Especially since the American trade deficit was going to seriously widen due to the massive increase in oil imports following the peak in national oil production that occurred precisely in 1971…
But that was without counting on Henry Kissinger and his geopolitical masterstroke called the “petrodollar”. The United States succeeded in forcing Saudi Arabia to sell its oil exclusively in dollars from 1975, and soon, all OPEC countries. Oil being the lifeblood of industrialized economies and globalization, the dollar remained the international reserve currency. Valéry Giscard d'Estaing used the expression “exorbitant privilege”. What is it concretely?
It's very simple. The growing demand for oil has maintained the global demand for the dollar. In addition, the major exporting countries have begun to place their dollar reserves in the form of US Treasury bonds. In other words, a good part of the proceeds of exports come back to the United States to finance the American public debt.
It follows that the United States can afford to run a chronic trade deficit without the dollar collapsing. That is the exorbitant privilege.
Only the United States can import more than it exports without a currency collapse. In fact, a few European countries like France have the same privilege. They benefit from Germany's massive trade surpluses that prop up the euro.
That said, will Germany be able to remain a industrial power without Russian gas ?…
When will bitcoin be available?
Russia and the BRICS in general are unlikely to abandon their de-dollarization ambitions, even if Donald Trump lifts sanctions. Too much Russian blood has been spilled.
And given the success of the last BRICS meeting in Russia (more than 60 official delegations), why backtrack?
The risk is that the United States will multiply conflicts to stop this dynamic. Taiwan is the next pawn that could be sacrificed on the geopolitical chessboard. The West will not let the BRICS, led by China, steal its monetary privilege without a fight.
The only solution is to trade on a level playing field. The world needs a stateless currency and payment system that offers advantages to no one.
Unlike the SWIFT network, this network will have to be immune to censorship. And unlike the dollar, this currency will have to exist in limited quantities. The solution is called bitcoin. A payment network and a currency, two-in-one.
It is no coincidence that Donald Trump intends to create a strategic reserve of bitcoins. Nor that Russia has just allowed Russian exporting and importing companies to settle their trades in bitcoin.
Bitcoin is the only currency that has the makings of an international reserve currency. We need a war for BTC instead of a third world war. Bitcoin is the new Bretton Woods.
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