01. Abandoning the US Dollar

The US dollar once stood tall above all other currencies, but now it finds itself surrounded by competitors.

The euro, established over 20 years ago, has gradually grown into the world's second-largest currency. In the foreign exchange reserves of central banks, the euro's share has reached 20%, almost all of which has been taken from the US dollar.

The Chinese yuan is also continuously growing. Ten years ago, the yuan was virtually absent in our country's trade settlements, but now it accounts for as much as 48%, relegating the US dollar to the second position.

Now even India has stepped forward to de-dollarize in trade, using the Indian rupee.

It is truly challenging to count how many competitors the US dollar has.

However, the fastest-growing currency in this period is undoubtedly the Chinese yuan. At the end of March, when ASEAN held a meeting to discuss internal trade, they began to reduce the use of the US dollar for settlements. The discussion topics at the time included not only the use of local currencies but also the use of the yuan.

Subsequently, Malaysia and Indonesia have both proposed that trade with China should prioritize the use of the yuan.

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Next, the President of Brazil suggested using local currencies for settlements within the BRICS countries, including trade with China using the yuan for settlement. Another major country in South America, Argentina, also announced that it will import goods from China using yuan settlement in the future.

Although the US dollar is still a major player in international settlements, compared to the 51.9% share in 2014, it has now significantly dropped to about 40%.02, Gold Reaches New Highs

There is also a super currency that cannot be ignored, and that is gold.

Central banks around the world are continuously buying gold in large quantities. Last year alone, the total amount of gold purchased by global central banks reached 1136 tons, the highest annual purchase since 1967, a significant increase of 152% compared to 2021.

Yesterday, the international price of gold set a new high for the recent period, reaching $2085.4 per ounce, just a step away from the highest level during the European conflict.

When the dollar was decoupled from gold, it was actually a process of demonetizing gold, which led to the dollar being unrestrained by gold, and the United States became reckless in issuing dollars.

Now, countries are taking actions in the opposite direction of the past, de-dollarizing while re-elevating the status of gold.

In this process, the decline of the dollar's hegemonic status is accelerating.

03, What are the consequences?

All along, in order to maintain its own dominance and prevent its dominance from continuing to decline, the United States has been creating various geographical frictions worldwide. However, this kind of friction comes at a cost, requiring the U.S. government to provide substantial funds to support it.

In the case of the Russo-Ukrainian war, the U.S. government provided the most funding, not to mention the arms.Over the years, the United States has seemingly reaped substantial profits from financial harvesting around the world. However, in reality, the U.S. government has been running annual deficits of several trillion dollars.

Now, with the decline in the status of the U.S. dollar, the country simply does not have surplus funds for other endeavors.

Most importantly, if the status of the dollar diminishes, the U.S. government will remain perpetually short of funds.

Currently, due to the crisis in the American banking sector, the credibility of the dollar has been continuously declining, leading to a trend of devaluation. Many countries are massively offloading U.S. debt, causing the prices of U.S. Treasury bonds to fall incessantly, exacerbating the shortage of funds in the United States.

As a result, the United States does not have ample funds to invest in infrastructure, technology, and the military, let alone the capacity to instigate wars around the world. If this continues over the long term, the U.S. will lose its leading edge, the status of the dollar will be shaken, and the global standing of the United States will also decline.