De-dollarization is coming. From China and France signing a natural gas deal in Chinese yuan, to BRICS announcing a new gold and commodity-backed currency, the dollar's reign is in crisis. BT's Kei Pritsker explains who is de-dollarizing and how it could de-throne the dollar:
Transcript
0:00
deodorization is coming politicians in
0:02
the U.S already freaking out about the
0:04
prospect that they won't be able to
0:05
punish other countries using the
0:07
supremacy of the dollar Brazil in our
0:10
hemisphere largest country in the
0:11
Western Hemisphere south of us cut a
0:13
trade deal with China they're going to
0:14
from now on do trade in their own
0:16
currencies get right around the dollar
0:18
they're creating a secondary economy in
0:21
the world totally independent of the
0:23
United States we won't have to talk
0:24
about sanctions in five years because
0:26
there'll be so many countries
0:27
transacting and currencies other than
0:29
the dollar that we won't have the
0:31
ability to sanction them you've probably
0:32
heard people say dedolarization will be
0:34
the beginning of the end for U.S
0:36
hegemony and bring about an entirely new
0:38
Global Financial system that replaces
0:40
the dollar and as crazy as that might
0:42
sound it's not only likely but there are
0:44
already dozens of countries working to
0:45
make this a reality to understand why
0:47
the Dollar's dominance could be ending
0:49
first we need to understand how it
0:50
became so dominant to begin with for
0:52
over a hundred years the British Empire
0:54
imposed an International Financial
0:56
system where the British pound function
0:58
as the world Reserve currency a world
0:59
Reserve currency is used as the standard
1:02
and all-international trade and is
1:04
usually the currency of the dominant
1:05
power of the time controlling the world
1:07
Reserve currency conferred huge
1:09
privileges to the British but this
1:10
changed during World War II during the
1:12
war Britain had to let most of its
1:14
colonies go because it had to dedicate
1:16
all of its resources to fighting the war
1:18
Britain itself was also relentlessly
1:20
bombed during the war in most of its
1:22
cities and factories were destroyed in
1:24
fact basically every country involved in
1:26
the war was seriously set back every
1:28
country except the United States the U.S
1:30
Mainland was never attacked and it spent
1:32
most of the war building up its
1:34
industrial capacity the United States
1:35
not only emerged from the war intact but
1:38
also the sole capitalist superpower the
1:40
United States used the crisis of the war
1:42
to recreate a new world financial system
1:45
in what was called the Bretton Woods
1:46
agreement according to the agreement the
1:48
dollar would be the new world Reserve
1:50
currency this gave the U.S tremendous
1:52
Financial power because all of a sudden
1:54
everyone needed the US's currency to buy
1:56
and sell things making the dollar the
1:58
most needed in San cryptocurrency in the
2:01
world it was agreed that the dollar
2:02
would be exchangeable for gold at a rate
2:04
of 35 dollars per ounce in theory this
2:07
prevented the US from just printing
2:09
money because the U.S would have to keep
2:10
enough gold on hand to honor the
2:12
exchange rate and gold can't be printed
2:14
however when it came down to it the U.S
2:16
broke its promise anyway in the 1960s it
2:19
became clear that the US was printing
2:21
way more dollars than it actually had in
2:23
Gold French president Charles de Gaulle
2:25
said the following the fact that many
2:27
countries except as principle the dollar
2:29
as good as gold leads Americans to get
2:32
into debt and to get into debt for free
2:34
at the expense of other countries
2:35
because what the US owes them it is paid
2:38
at least in part with dollars they are
2:40
the only ones allowed to Omit as the U.S
2:43
entered an inflationary crisis country
2:45
started to demand their gold back in
2:47
order to stop the bleeding the Nixon
2:48
Administration suspended the
2:50
convertibility of the dollar into gold
2:52
in 1971. the U.S kept the gold and left
2:55
the rest of the world holding dollars in
2:58
order to keep the world beholden to the
2:59
dollar the U.S negotiated a secret deal
3:02
with the Saudi monarchy in 1973 where
3:04
the U.S would offer Saudi Arabia
3:06
military protection and in return Saudi
3:09
Arabia would only sell its oil in
3:11
dollars since oil is the most traded
3:13
commodity in the world requiring the
3:15
dollar for oil purchases essentially
3:17
made the dollar a prerequisite for
3:19
international trade Economist Barry Iken
3:21
green sums up just how beneficial this
3:24
Arrangement really was quote it costs
3:26
only a few cents for the Bureau of
3:28
Engraving and printing to produce a
3:30
hundred dollar bill but other countries
3:32
have to Pony up a hundred dollars of
3:33
actual goods and services in order to
3:36
obtain one the other aspect of this is
3:38
since the entire world financial system
3:40
is based around institutions created by
3:42
the US the U.S uses this to punish
3:45
countries it doesn't like for example
3:47
the U.S controls Swift the digital
3:50
payment system that's akin to the blood
3:52
vessels of the world financial system
3:53
the US's unilaterally banned countries
3:56
like Cuba Iran and North Korea from
3:58
Swift essentially forbidden them from
4:00
conducting International Trade the U.S
4:02
also leverages foreign countries
4:04
stockpiles of US Dollars against them
4:06
for example when Russia invaded Ukraine
4:08
the U.S froze over 600 billion dollars
4:11
of gold in foreign reserves held in U.S
4:13
and EU Banks making Russia unable to pay
4:16
its foreign debts regardless of how you
4:18
feel about Russia U.S control over the
4:20
world financial system allows the US to
4:22
intervene in any conflict on Earth and
4:25
financially ruin the side they oppose
4:27
this is the complete opposite of the
4:29
free trade and political neutrality the
4:31
U.S promised when it built this
4:33
globalized financial architecture this
4:35
Arrangement is obviously incredibly
4:37
beneficial to the U.S Elites but there's
4:39
only one problem the system only works
4:42
if the rest of the world especially
4:44
oil-bearing States continue to use the
4:46
dollar this came up for instance with
4:48
Muammar Gaddafi who just two years prior
4:51
to the U.S led carpet bombing of Libya
4:53
proposed the creation of a single
4:55
gold-backed African currency called the
4:57
dinar an email leak by WikiLeaks on
5:00
Hillary Clinton's email server
5:01
explicitly mentions Gaddafi's plan for
5:04
the goldback dinar as one of the reasons
5:06
for intervening Iran another big oil
5:08
state is under one of the worst U.S
5:10
sanctions regimes in the world in
5:12
Venezuela who not only has the largest
5:14
petroleum reserves in the world but has
5:16
also made several moves to sell its oil
5:18
and alternative currencies was the
5:20
victim of a U.S back coup attempt in
5:22
2019 were taking Venezuela's oil was
5:25
discussed casually as one of the central
5:27
motivations so if you think of a company
5:30
like sitko which is owned by pedivasa
5:32
which is the state-run oil company there
5:34
in Venezuela we have a lot of those
5:37
Cisco assets right here in the U.S is
5:40
that something for example sir that
5:41
you're looking at
5:42
yeah look we're in conversation with
5:44
major American companies now that are
5:46
either in Venezuela or in the case of
5:48
Citgo here in the United States it'll
5:51
make a big difference to the United
5:52
States economically if we could have
5:55
American oil companies really invest in
5:58
and and produce the oil capabilities in
6:01
Venezuela it'd be good for the people of
6:03
Venezuela it'd be good for the people of
6:04
the United States despite the US's
6:06
repeated attempts to maintain its
6:08
Supremacy over the world financial
6:09
system more and more countries are
6:11
setting up agreements to do trade in
6:12
their local currencies and gold instead
6:15
of the dollar it would take too long to
6:16
go through each example so here's a list
6:19
of countries that have moved to
6:20
de-dollarize in the last year
6:29
some notable examples here are France
6:31
and China settling their first liquefied
6:33
natural gas contract in Chinese Yuan
6:35
followed by French president Emmanuel
6:37
macron saying that Europe needs to
6:39
lessen its dependence on the dollar
6:40
India recently announced that it would
6:42
no longer require the US dollar in
6:43
foreign trade Argentina and Brazil
6:46
announced plans to create a common
6:47
currency for South America called the
6:49
sword at the top of the agenda of the
6:51
recent asean meeting a grouping of 10
6:53
Southeast Asian countries was to quote
6:55
reduced dependence on the U.S dollar
6:57
euro Yen and British pound from
7:00
Financial transactions and move to
7:02
settlements in local currencies one of
7:04
the most notable examples is brics
7:06
announcing that they'll be developing
7:08
plans for new currency at their next
7:09
meeting a currency that will be backed
7:11
by gold and other crucial Commodities
7:13
brics is something like a rival to the
7:15
Western G7 Alliance and stands for
7:17
Brazil Russia India China and South
7:19
Africa this year bricks is set to expand
7:22
with possible new members including
7:23
Algeria Saudi Arabia Argentina Iran
7:27
turkey and the UAE this plan for for new
7:29
currency begs the question why would the
7:31
world continue to use the dollar when
7:33
the dollar is used as a weapon against
7:35
the ones who use it the great irony of
7:37
the dollar standard is that it forces
7:39
all the countries that are rich in
7:41
resources and labor to hand over their
7:43
real wealth in exchange for pieces of
7:45
paper that cost a few cents to print
7:46
when the U.S suspended the Dollar's
7:49
convertibility into gold in 1971 then
7:51
treasury secretary John Connolly shocked
7:54
reporters when he said the dollar is our
7:56
currency but it's your problem now the
7:58
world is waking up and saying this is
8:01
our wealth you want and that's your
8:03
problem
