Barbados Times

Barbados, Caribbean & World News
Thursday, Oct 31, 2024

De-dollarization: Three Reasons Why Nations Are Diversifying Away from the US Dollar

De-dollarization: Three Reasons Why Nations Are Diversifying Away from the US Dollar

De-dollarization: Three Reasons Why Nations Want to Break Up with the USD.
The US dollar has been the world's reserve currency for decades, but its dominance is fading.

With the rise of alternative currencies, many countries are considering breaking up with the USD.

Here are three reasons why: 1.

US Monetary Policy Holds Too Much Sway Over the Rest of the World As the issuer of the world's reserve currency, the US has an outsized hold on the global economy.

This "exorbitant privilege" means that the US can issue money without facing the same risks as other countries.

Additionally, other countries must follow US monetary policies to avoid negative spillover effects on their economies.

However, some countries, including India, are pushing back against US monetary policies and exploring the use of alternative currencies such as the Indian rupee for trade.

2.

The Strong USD is Getting too Expensive for Emerging Nations As the US dollar gains strength against other currencies, imports become more expensive for emerging nations.

This has led to political pressure and economic instability in countries such as Argentina, which has begun paying for Chinese imports in yuan instead of US dollars.

If access to USD becomes more expensive, borrowers will seek alternatives, making it easier for alternative currencies to gain traction.

3.

Structural Shift in the Global Oil Trade The US dollar's dominance in the global oil trade is also contributing to its decline.

The Energy Policy Institute at the University of Chicago found that the share of global oil trade denominated in US dollars has decreased from 70% in 2002 to 40% in 2019.

As the global oil trade shifts away from the US dollar, other countries may see an opportunity to move away from the currency as well.

In conclusion, the US dollar's dominance is fading as other currencies gain traction.

The rise of alternative currencies is driven by a combination of political and economic factors, including US monetary policy, the strong USD, and the structural shift in the global oil trade.

While the US dollar may still be the world's reserve currency, its position is increasingly under threat.

In 1945, the United States and Saudi Arabia signed a historic deal that would formalize the arrangement where the oil-rich country would sell its oil exclusively in US dollars.

In return, Saudi Arabia would invest its excess dollar reserves in US treasuries and companies, which guaranteed the security of the US.

However, the rise of the shale-oil industry in the US has made it energy independent and a net oil exporter, which could potentially harm the US dollar's status as the global reserve currency.

The relationship between the US and Saudi Arabia has been strained in recent years due to various issues, such as President Trump's complaint about Saudi Arabia not paying a fair price for US defense and President Biden's snub of Crown Prince Mohammed bin Salman over the murder of the Washington Post journalist Jamal Khashoggi.

These tensions, coupled with the shale-energy revolution, raise the possibility that Saudi Arabia could one day abandon its US-denominated oil pricing, according to Sarah Miller of Energy Intelligence.
Comments

Oh ya 1 year ago
Yup the USA has used the dollar as a weapon against too many countries and now it is payback time. They can print as many USD as they want and buy real stuff on the world market. And when they print the dollars in your pockets becomes more devalued with each one they print. August 22 - 24 this is going to change as the BRICS have announced they are coming out with a new gold backed currency for settling country trade, thus they will not need to hold USD in the FX accounts and those unnecessary dollars can flow back to the US and cause inflation like you have never seen before. Buckle up folks

Newsletter

Related Articles

Barbados Times
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
×