At the moment, the OPEC oil-backed status of the dollar allows the currency to enjoy the status of the most stable and sought-after medium of exchange in trade.
However, a number of countries and non-state actors have recently sought to change this state of affairs, proposing other currencies, gold or even cryptocurrencies as a replacement.
The US Office of the Director of National Intelligence, the powerful state organ coordinating the foreign and domestic intelligence of the US intelligence community, has published a job posting searching for PhD’s to evaluate threats to the global dollar system.
The organization is seeking candidates who can “provide useful new insights not available today” to allow the USA to “prepare for scenarios that threaten to undermine the US dollar as the world reserve currency.”
The posting explains that the dollar’s status as the world reserve currency provides America with many advantages and opportunities, including “jurisdiction over dollar transactions, and the ability to “effectively level sanctions” against countries or entities at free will.
Multiple factors, including the growing economic power of BRICS countries like China and India, as well as cryptocurrencies, threaten the dollar’s supremacy.
Curiously, the posting also calls for skills in Earth and geo-sciences, environmental and marine sciences, life health and medical sciences, and nanotechnology.
The research project calls on candidates to “leverage all available information as well as recent breakthroughs in applied statistics, artificial intelligence, and deep learning” to determine the most likely expected cause of the dollar’s decline, the time frame involved, and the likely economic and national security consequences.
Russia has helped to lead the charge in challenging the dollar’s hegemony in recent years after accusing Washington of the “outright abuse” of its coveted status and the “increasingly aggressive use of financial sanctions.”
Last month, Russian Foreign Minister Sergei Lavrov confirmed that Russia would continue “its policy aimed at the gradual de-dollarization of the economy.”
Once one of the largest investors in dollars and US debt, Moscow has gradually dropped the vast majority of its Treasuries holdings, and topped up the share of gold, yuan, euros and other currencies in place of the greenback in its $500+ billion reserve cushion.
Furthermore, Russian trade partners including China, Turkey and India have agreed on the use of local currencies for major trade deals and defense-related contracts, in part to allow them to skirt US sanctions restrictions.
Late last year, Russian energy giant Rosneft, one of the world’s largest oil and gas companies, dropped the dollar in favor of euros in export contracts.
Russia’s ministry of finance has also toyed with the idea of switching to euros in all trade with the European Union.
Iran, which switched from dollars to euros for its official reporting currency in 2018, has proposed an ambitious international effort at the Non-Aligned Movement level to battle the dollar, saying the community of neutral states has the power to counter and defeat illegitimate US economic and sanctions pressure.
I think a good mechanism to profit from the demise is to first buy physical food stocks, rice above all. Also go short on McDonald’s and long on Gold. Once US treasuries start sliding, go short on the Dollar and long on agricultural commodities.
It seems like an admission of failure to deal with the problem. All the best strategists and thinkers in the financial world work in banks, hedge funds and trading firms, and they are not going to quit and join an outfit that undermines their ability to get richer.
Sputnik / ABC Flash Point Currency News 2020.