The FED has come to accept the painful and unsettling fact: the dollar has been beaten. In his March 2 testimony, the Federal Reserve Chair Jerome Powell said: “Over a period of time… it would diminish our status as reserve currency. It is also possible that the world will have more than one large reserve currency. There have been times when that was the case… so it is not really clear.” This is the FED’s acceptance of the dollar’s decline.
If the dollar is no longer the only reserve currency, then America is no longer the only superpower. The defeat of the dollar is a bigger event than the defeat of Pax Americana in Ukraine. Powell did not name the currencies which could play (or are already playing) the role of reserve currency. It could be crypto—it could be the Chinese Yuan, the Japanese Yen, and the European Euro. If America tries to maintain the dollar’s supreme position, it will cause an endless hemorrhaging of the world economy and it will fail in the end. In the long run, it would be cheaper for America to accept coexistence with other reserve currencies and financial systems.
India has had its own currency model for trade with Russia for many years. China has recently reverted to its own currency in pursuing trade with Russia. The combined population of Russia, China, and India is about 3 billion—this implies that close to half the population of this planet will now be doing their trade outside the SWIFT system and through non-dollar currencies.