The Decline of Dollar Dominance: Implications for America’s Global Power

The Ministry of Foreign Affairs said that the US does not benefit from the dominance of the dollar in the world, as they have to compensate for the consequences of the trade policy of countries with a positive trade balance.

The newspaper said the United States maintains its role as a balancing act for the global economy, which requires it to allow capital to move freely across its borders and absorb savings and imbalances, meaning the United States is forced to bear a capital deficit. to compensate for the financial surpluses of other countries, which also reduces global demand, helps to restore the economic balance.

The United States does not need, according to the newspaper, “to continue to suffer from a trade deficit in order to keep the global trading system connected to the dollar. For example, when the world needs savings, the United States provides them, achieving a positive trade balance, and otherwise America suffers from the deficit.

The authors of the article believe that the United States, like other countries in the world, will benefit from the declining role of the dollar as the dominant currency. Although Washington’s power will be limited, American companies will grow faster and workers will earn more, but exclude that this will be easy to achieve due to for the general abandonment of the dollar, which could have disastrous consequences for the economies of countries with a permanent positive balance, focusing only on exports.

Former CIA adviser James Rickards said on June 7 that the transition of the BRICS countries to their own currency would mean the collapse of the dollar as the dominant currency in the world, stressing that such a situation would push the US economy to collapse, while there was talk that Russia and its partners are planning the collapse of the US currency.

Source: Gazeta.ru