Russia, China, and Saudi Arabia Push to Dethrone U.S. Dollar as Global Reserve Currency
The recent events have marked a significant milestone in the potential downfall of the U.S. dollar as the global reserve currency. There is a growing belief that Russia, China and Saudi Arabia are planning to make a collective effort to dethrone the U.S. dollar. This is due to the increasing divide between the BRICS nations, led by Russia and China, and the West, led by the United States.
Last summer, Russia and China announced a “new global reserve currency” which was predicted by some experts in early 2022. Russia and China are working with nations like Saudi Arabia and India to implement their plans.
One of the crucial elements in dethroning the U.S. dollar is the removal of its use for buying and selling oil. This system has been in place since the 1970s when the U.S. made a deal with the Saudi Kingdom, promising security in exchange for the petrodollar system that underpins the dollar’s strength as global reserve currency.
Recently, Saudi Arabia has signed new protection agreements with Russia, which could be a sign of their intention to break away from the petrodollar system. Furthermore, Eastern European countries that have repatriated their gold and trade their own currency, could also be breaking away from the Western system.
The U.S. dollar has long been known as the "King dollar" due to the big Fed rate rises last year, but the recent events have reinforced the market expectation that borrowing costs will not rise much further in 2023. If these speculations are true, it could mark the end of the petrodollar system and the start of a new era where multiple currencies are used to buy and sell oil. It could also lead to a significant shift in the global financial system and expose the U.S. as an emperor with no clothes.