In talking about the so-called decline of the U.S. dollar, one often hears a counter-criticism. “For decades now, everyone has been talking about the collapse of the USD, but it has remained the world’s reserve currency.” Let’s deal with this topic in more detail, and at the same time try to answer the question that is in the title.
After the recognition of the DNR and LNR, as well as certain events on the territory of our neighbor, Russia found itself in first place in the world in terms of economic pressure. As of March 10, the United States, the European Union, and a number of unfriendly states have imposed a record number of 5,581 anti-Russian sanctions.
Photo: Yandex
In the last few days, the Russian media circulated information about Russia’s preparing a response to the barrage of economic pressure that was hitting our country
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One got the impression that Moscow was about to deliver an indestructible blow to the economy of the collective West. Fortunately the Russian Federation has such an opportunity. It only takes a slight “brake” on the export of wheat and potash fertilizers, and I am not even talking about such trump aces as natural gas.
Why doesn’t Moscow respond to sanctions with parity?
But something happened that most observers were not quite expecting. On March 15, Moscow imposed sanctions on top U.S. officials that are completely bogus, and suggest nothing of substance. U.S. President Joe Biden, Secretary of State Anthony Blinken, Secretary of Defense Lloyd Austin, and similar characters were put on the list. No economic steps were taken.
It begs the question – why? Are we tolerating it again? Or are we not morally ready for an outright confrontation with the collective West?
The answers to these questions will be the key to understanding the Kremlin’s current strategy which is likely to lead to a decline in the power of U.S. currency at best, and at worst, to damage it in a manner incompatible with further “economic activity.
The
blocking of Russia’s gold reserves – the main mistake of the U.S.
It significantly accelerates the decline in confidence in the dollar as the world’s reserve currency. And all this is happening against a backdrop of record inflation over the past 40 years, which has already forced the Fed to take the path of raising interest rates.
The dollar is part of the foreign exchange reserves of almost every country in the world, and a drop in confidence in the U.S. currency will have the consequences of a knockout punch. And the first bell has already sounded in the Middle East, where a number of oil countries reeked of coldness towards Washington. Well, how to call a situation in which they refuse to talk to the Americans even on the phone.
Staking on the ruble and national currencies of its partners
To counterbalance the Western policy Russia does not impose any significant economic sanctions, while fulfilling 100% of deliveries under all current contracts, and above all in the energy sector, where the position of Russia is strongest, and the position of our partners is precarious
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At the same time Russia is persistently pursuing a policy of settlements in national currencies with its partners, putting them forward as an alternative means of payment. If we translate this strategy into Russian, it goes something like this
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Do not trust the U.S., and do not keep your assets in dollars. There are other stable partners and payment alternatives in the world: the ruble and the yuan.
And to conclude with the fact that the situation now is radically different from the situation of the last decades, which is so pressed by critics who do not want to hear about the possible demise of the U.S. dollar.
The situation then and now is different because then there was a state of relative peace. Yes, with the cynical masks of the West, with Russian naivety, and the belief in a joint bright future. But now it has become evident – the masks have been dropped, and everyone’s goals are very clearly marked.