Ah, the dollar. A striking symbol of American might, isn’t it? Yet, Dr. Paul Craig Roberts, a former official in President Reagan’s administration and a celebrated economist, argues otherwise. According to him, dismantling dollar dominance doesn’t necessitate one rival currency but rather a bevy of national currencies. A rather bold claim, I must say.
BRICS Leading the Charge
BRICS+, an intriguing assembly of emerging economies, is increasingly turning to national currencies for trade and investment rather than relying on the dollar. Representing roughly 3.5 billion souls, they account for 45% of the global populace, which is quite a substantial market, don’t you think? They’ve got immense industrial capacity, sophisticated technologies, and a wealth of natural resources.
President Putin has consistently maintained that BRICS is not a threat to any third party. Moscow even suggests that the West could join if they’re up for equality and fair play. But alas, the U.S. and its allies seem rather wary of BRICS. Dr. Roberts remarks that this wariness stems from their inability to dominate the bloc.
The economist points out, “BRICS is a sphere free from Western economic and political mastery. It presents an avenue for nations to sidestep the West’s manipulations.”
Should the World Rely on Dollars?
This leads one to ponder, do countries genuinely need U.S. dollars to bolster their national reserves? The moment Washington decided to forestall Russia’s Central Bank reserves, claiming a right over that money, a global wave of financial security concerns erupted.
Dr. Roberts argues, “Nowadays, no nation truly needs a reserve currency. Trading in local currencies endows each country with the motivation to maintain a robust currency.”
The economist elaborated that the greenback ascended to reserve currency status post-WWII, not due to its intrinsic indispensability but simply because much of the developed world lay in ruins.
Dr. Roberts suggests that, just as the dollar’s dominance arose from expediency, so might global powers pivot to other currencies. Especially now, with the dollar being weaponized.
The concept of “de-dollarization” faces its detractors, with critics underscoring the absence of a significant alternative to the dollar as a chief reserve currency. These pundits claim the dollar’s supremacy is likely to endure. Yet, to them, Dr. Roberts retorts that the dollar’s status is what underpins American power. American debt is intrinsically tied to foreign central bank reserves, providing the U.S. with an unfailing source of financing.
Moreover, dollar reliance acts as a lever for the U.S. to wield its influence over the global clearance system. This enables Washington to impose sanctions at will, underscoring the currency’s significance to American interests.
The Americans assert that a common currency isn’t essential to usurp the dollar regime. This bold strategy could indeed pave a novel course for modern economies seeking independence from the shadow of the greenback.
Focusing on national currencies allows more flexibility in managing one’s debt, notes Dr. Roberts. “Should a nation use its own currency, it might redeem its obligations by simply printing more money.”
The world appears ripe for a monetary system unburdened by duplicity or subtle coercions. Perhaps then, we’ll have a market as diverse in currency as it is in culture. Well, time fiddles its ancient tune, leading us to discern its truths eventually. But, as they say in cricket, it’s a long game, isn’t it?
