I’d say the really big change since 2022 was that account surpluses of Russia, China and Saudi Arabia have now reached record levels, but these surpluses are no longer being transferred to traditional reserve dollar assets. Instead of the dollar, these countries invest primarily in gold, raw materials assets, and also make geopolitical investments. The remaining surpluses are stored on bank deposits in a liquid form to guarantee the possibility of their use.
Moreover, dedollarization is now accelerated by three fundamental trends:
Settlements in national currencies greatly reduce the role of the dollar as a world equivalent
Digital currencies of central banks will allow transactions to be carried out without using the infrastructure of the financial system of the West
Reserves denominated in US government debt are declining
Finally, another key reason the dollar is a global reserve currency is that oil could only be bought using dollars up to now. Every modern country needs oil to function, and that means having to buy dollars in order to get oil.
This scheme made dollar a very stable currency since there was guaranteed demand for it. This scheme is now falling apart. Russia is already trading oil outside the dollar, and now Saudis are going to start doing that as well. These are two of the most important oil producers in the world facilitating oil trade outside the dollar. Meanwhile, China and India are two of the biggest consumers and both are now pushing towards settlements in national currencies. Both are already trading this way with Russia out of necessity.
2022 was definitely a big year. 2008 and 2014 as well imo
I’d say the really big change since 2022 was that account surpluses of Russia, China and Saudi Arabia have now reached record levels, but these surpluses are no longer being transferred to traditional reserve dollar assets. Instead of the dollar, these countries invest primarily in gold, raw materials assets, and also make geopolitical investments. The remaining surpluses are stored on bank deposits in a liquid form to guarantee the possibility of their use.
Moreover, dedollarization is now accelerated by three fundamental trends:
Finally, another key reason the dollar is a global reserve currency is that oil could only be bought using dollars up to now. Every modern country needs oil to function, and that means having to buy dollars in order to get oil.
This scheme made dollar a very stable currency since there was guaranteed demand for it. This scheme is now falling apart. Russia is already trading oil outside the dollar, and now Saudis are going to start doing that as well. These are two of the most important oil producers in the world facilitating oil trade outside the dollar. Meanwhile, China and India are two of the biggest consumers and both are now pushing towards settlements in national currencies. Both are already trading this way with Russia out of necessity.