Yea!

 

last one for today on the $.

A US gearing up for a fight will need its dollar dominance and allies in Europe

"As Brazil and others take steps towards reducing their dollar reliance, Macron’s controversial remarks about Europe staking its own position on Taiwan, independent of the US, may herald a redrawing of the geopolitical fault lines – if the Ukraine war drags on."

("IF?"

We just acquiesced to Russia about Realtime MQ9 reaper drone intelligence

for goodness sakes.)

(Were not gonna have dollar dominance 

(at least not in the form it once was) 

or our allies in Europe.

getting the picture yet?)

"The buzzword is “acceleration”. No sooner had I made observations in this column late last month about the acceleration of geopolitical developments since the Biden administration came to office than we witnessed an acceleration of the acceleration."

"The Beijing-mediated rapprochement between Saudi Arabia and Iran and President Xi Jinping’s visit to Moscow, both of which occurred last month, have set in motion potentially consequential tectonic-plate shifts in global politics."

"Two developments are especially noteworthy: recent talk of the ascent of the renminbi and potential de-dollarisation, and the hype over French President Emmanuel Macron’s remarks following his trip to China early this month."

"Following its reconciliation with Iran, Saudi Arabia has pledged investments worth US$10 billion in China’s petrochemical industry, raising Chinese hopes that it would soon accept the yuan as payment for oil exports."

"For its part, Brazil is already accepting yuan payments in its trade with China. On a trip to China last week, Brazilian President Luiz Inacio Lula da Silva went further and called on the BRICS bloc to settle bilateral trade and investments in their own currencies."

"Separately, members of the Association of Southeast Asian Nations are also considering a move to reduce their dependence on the dollar and other major currencies in the settlement of their intra-region trade, specifically suggesting a move away from Visa and MasterCard, the global credit card processing duopoly from the US."

"It has to be pointed out, however, that there is a lot of hype regarding de-dollarisation and the rise of the renminbi, as the dollar remains dominant."

"Complaints about the dollar’s dominance largely reflect developing economies’ frustration over the US Federal Reserve’s tightening monetary measures that have drained them of their dollar reserves. Meanwhile, the yuan is also emerging as a viable alternative for some, considering their substantive trade with China and reliance on it for infrastructure and industrial development."

(The bigger test translation is this:

The more we do to help fight inflation here?

The more developing countries have to pay on their $ dominated debt.

"The lack of available good options...etc.)

"Still, those who worry about the dollar’s future are right to do so: the cracks in the currency’s ascendancy are unmistakable."

(Unmistakable at this point.)

"The other issue to make headlines was Macron’s controversial remarks during a flight from Beijing, after meeting Xi, that Taiwan was not Europe’s crisis and that Europe should avoid becoming a “vassal” of the US. His comment sparked emotionally charged responses on both sides of the Atlantic."

"Some, like US senator Marco Rubio, castigated him for his stance, some traced his motivation to the Gallic penchant for independence,

 

(Except when they need bailed out from the Germans coming toward them, then they are all about some "transatlantic cooperation" etc.)

"...and still others saw it as a naive attempt to divert attention from his domestic troubles over pension reform."

"Would America act with determination to deflect the feared avalanche of a “flight from the dollar” in the developing world, while keeping a rein on its allies like France and the Franco-German-led EU? I see little prospect of this."

(Me either:

)

"Two years ago in this column, I regretted that Washington did not do for the developing world what it had so admirably done for post-war Europe with the Marshall Plan.

"Now, it seems too late to contemplate this kind of initiative because, by having too successfully globalised its economy, America has lost what it used to have, especially in the immediate post-war period – namely, unrivalled industrial capabilities married with equally powerful monetary prowess epitomised by Wall Street."

(That is 100% true and what my dad and others like him warned about when 'offshoring" and "Globalization" started.

"We are shooting ourselves in the foot." 

He would say.)

"In fact, only China can do that now, and along with that capability comes the likelihood of the renminbi’s rise.

Europe’s defiance regarding China and Russia is imminent."

(100% agree with all of that.)

"If the war in Ukraine drags on into next year, it could serve to spur the de-dollarisation movement and push a recalcitrant Europe over its limits.

America’s hand may well be forced one way or another as geopolitical movements keep accelerating."

(Emphasis on accelerating.)