The US dollar is in crisis. In just a few short months, it has gone from the unquestioned global reserve currency to one that scores of countries are dumping in favor of using their own or regional currencies for international transactions.
One individual who is not lamenting the dollar’s sharp decline is Ben Norton, who joins the show today. Ben is an American journalist based in Nicaragua and the editor-in-chief of the independent news outlet Geopolitical Economy Report.
In the past year, dozens of countries have announced that they will no longer be using the US dollar for international transactions, preferring instead to use regional or new currencies. This harms the US economy, as countries will no longer exchange goods and services for pieces of green paper that Washington prints, almost for free. The move away from the dollar also has huge implications for the American empire and Washington’s ability to wage economic war across the world. As Florida Senator Marco Rubio lamented,
Brazil, the largest country in the Western hemisphere south of us, cut a trade deal with China. They are, from now on, going to do trade in their own currencies and go right around the dollar. They’re creating a secondary economy totally independent of the United States. We won’t have to talk about sanctions in five years because there will be so many countries transacting in currencies other than the dollar that we won’t have the ability to sanction them.”
Norton told Lowkey that much of this comes as an unexpected consequence of Russia’s invasion of Ukraine, noting:
Because the West imposed brutal sanctions on Russia and also stole half of the Russian central bank’s foreign exchange reserves, which includes around $300 billion of dollar assets and euro denominated assets that were held by what was essentially the Russian people… that was a ‘wake up’ kind of moment for a lot of countries, because they say ‘if we do something that the West doesn’t like, they can simply steal all of our US dollars and euro-denominated assets.’”
As Washington declines, Beijing is rising. China has steadily grown to the point where, if measured in purchasing power parity, it has now economically surpassed the United States. Countries in the Global South (i.e., poor nations), Norton suggests, are happy to see this and prefer to trade with China, as there are far fewer strings attached than dealing with the West.
At every turn, the United States has tried to prevent this, attempting to pressure nations into shunning both Russia and China, something which Norton said is akin to asking them to commit economic suicide.
American power is slipping so rapidly that even longtime allies such as Saudi Arabia are beginning to play both sides. Riyadh has refused to sanction Russia or shun China. Indeed, Beijing played a key role as a mediator for the détente between Saudi Arabia and Iran and in winding down the Saudi-led war on Yemen. If the United States can no longer count on the unflinching support of even Saudi Arabia, its days as the global hegemon are likely over.
Join us for this crucially important introduction to global geopolitics.
Lowkey is a British-Iraqi hip-hop artist, academic and political campaigner. As a musician, he has collaborated with the Arctic Monkeys, Wretch 32, Immortal Technique and Akala. He is a patron of Stop The War Coalition, Palestine Solidarity Campaign, the Racial Justice Network, and The Peace and Justice Project founded by Jeremy Corbyn. He has spoken and performed on platforms from the Oxford Union to the Royal Albert Hall and Glastonbury. His latest album, Soundtrack To The Struggle 2, featured Noam Chomsky and Frankie Boyle and has been streamed millions of times.
bla 17:30 EST
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