via Kitco News:
There are plenty of reasons to be bullish on gold: a global banking crisis, an impending recession, and persistently higher inflation. Now, we can also add the demise of the U.S. dollar as the world’s reserve currency.
Okay, rumors of the U.S. dollar’s death might be premature, but there is definitely a growing trend that the world is moving towards a multi-currency financial system. China and Russia are leading the charge to create an internationally recognized yuan and results are starting to bear fruit.
This past week, China announced that it settled its first Liquid National Gas trade in yuan through the Shanghai Petroleum and Natural Gas Exchange. At the same time, China and Brazil inked a deal to conduct trade and financial transactions in the natural and yuan, cutting out the U.S. dollar.
In other de-dollarization headlines, Former Goldman Sachs chief economist Jim O’Neill, the person who coined the term BRICS — representing Brazil, Russia, India, China and South Africa — said that the trading bloc should expand and challenge the dominance of the U.S. dollar.
“The U.S. dollar plays a far too dominant role in global finance,” he wrote in a paper published in the Global Policy journal. “Whenever the Federal Reserve Board has embarked on periods of monetary tightening, or the opposite, loosening, the consequences on the value of the dollar and the knock-on effects have been dramatic.”
The idea of the world diversifying away from the U.S. dollar has been around for years, but the trend picked up significant momentum in the past year as Western nations have tried to punish Russia for invading Ukraine.
Led by the U.S., Russia was kicked out of Society for Worldwide Interbank Financial Telecommunications, or SWIFT system, and its economy has been crippled by harsh economic sanctions. Some nations have described the West’s actions as a weaponization of the U.S. dollar and a new style of “aircraft carrier diplomacy” to dictate foreign policy objectives.