US Expert Warns: RMB to Surpass Dollar in 6 Years
Since the beginning of this year, the global trend of "de-dollarization" has been gathering momentum like a spark starting a prairie fire.
American economist Peter S. Ong released a video in which he warned about the future of the US dollar.
He stated that in 2001, the dollar's share in global settlements accounted for 73%, but by 2020, this figure had dropped to 55%.
Moreover, a more serious issue is that in just the past year, the dollar's share has decreased by another 8 percentage points, leaving it at 47%.
In the span of nearly one year, the global "de-dollarization" process has accelerated tenfold, far exceeding people's expectations.
Peter expressed concern, stating that if the current trend continues, the dollar's share in global settlements could be surpassed by the Chinese yuan in just six years.
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In response, the outspoken Musk also "fired back" in the comments section: "If a currency is used as a weapon too often, then other countries will stop using it."
The facts are indeed as Musk said, with the example of the US abandoning the "spirit of contract" to sanction Russia in the wake of last year's Russia-Ukraine conflict still fresh in people's minds.
If a currency becomes a "nuclear economic weapon" for a certain country, capable of being sanctioned and frozen at will, who would still be willing to continue using it?Is the "Weaponized" Dollar Still Attractive?
Less than a day after the Russia-Ukraine conflict last year, the United States, in conjunction with its allies, issued a statement announcing that Russia would be expelled from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) settlement system, unleashing this "financial nuclear bomb."
Subsequently, the United States froze more than $300 billion of Russia's foreign exchange reserves, possibly with the aim of causing panic in Russian banks, severely damaging its domestic economy, and hoping to trigger large-scale unemployment and internal chaos.
But what was the outcome?
In harming the enemy by a thousand, one suffers a loss of eight hundred. Russia was indeed greatly affected, but at the same time, countries around the world also saw through the true face of the United States behind its "spirit of contract," causing panic.
After all, who can guarantee that they will not follow in Russia's footsteps and become the next victim?
In the words of economist Peter Seng-Wong:
"Overnight, the dollar transformed from a rock-solid value reserve in the world into a political football."
When the dollar becomes an invincible weapon in the hands of the United States, and it unscrupulously practices dollar hegemony worldwide, it will lose the trust of everyone.
The dollar, once "weaponized," is no longer attractive.The global trend of de-dollarization is intensifying.
According to data from the World Gold Council, central banks around the world purchased a significant amount of gold in 2022, weighing a total of 1,136 tons, a year-on-year increase of 152%, marking the highest level since 1967.
In contrast, many countries have chosen to sell off US Treasury bonds.
The latest International Capital Flows Report (TIC) released by the US Department of the Treasury shows that 8 out of the top 10 "overseas creditors" of the United States reduced their holdings in the same month.
Among them, China has sold off US Treasury bonds for seven consecutive months, with current holdings at only $848.8 billion, which is the lowest since June 2010.
Quietly, de-dollarization has become a consensus among many countries, with the wave sweeping through various corners of the world.
In March of this year, China National Offshore Oil Corporation (CNOOC) and French energy company TotalEnergies completed the first LNG transaction in yuan;
The Brazilian government announced that in the future, trade with China will use local currencies, no longer using the US dollar as an intermediary currency;
During Malaysian Prime Minister Anwar Ibrahim's visit to China, he suggested the establishment of an "Asian Monetary Fund Organization".
Over the past few decades, the United States has repeatedly harvested global wealth through dollar hegemony, with many countries being "daring to be angry but not daring to speak", and lacking effective countermeasures.The global landscape is undergoing changes. As the United States grapples with inflation, banking sector turmoil, and a debt crisis, many countries have realized that now is the optimal time for "de-dollarization." Consequently, the global process of de-dollarization has intensified this year.
The internationalization of the Renminbi accelerates
According to data from the State Administration of Foreign Exchange of China, in March of this year, the Renminbi's share in China's cross-border receipts and payments reached 48%, marking a significant leap from almost zero in 2010.
In contrast, the share of the US dollar has dropped from 83% in 2010 to 47%.
It is evident that the proportion of the Renminbi in cross-border use is continuously increasing, and the process of Renminbi internationalization is accelerating.
Data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) also illustrates this issue:
In March of this year, the Renminbi's share in global trade finance currency transactions doubled to 4.5%.
Although it is still a "drop in the ocean" compared to the US dollar's share of over 40%, it is sufficient to demonstrate the current trend in the global currency market:
The Renminbi is steadily growing, while the US dollar is on the decline.
Recently, China has finalized Renminbi payment agreements with several countries, including Brazil, Russia, Iraq, Iran, Saudi Arabia, and more.The pace of global de-dollarization and the internationalization of the renminbi is much faster than people imagine.
It is precisely for this reason that economist Peter Shengwengqi would issue a warning that if the United States makes more policy mistakes, then this process of de-dollarization will be irreversible. The dollar's share in global settlements may be surpassed by China in just six years.
Even entrepreneurs like Musk can't stand it and are resonated, firing at the current poor dollar policy.
In conclusion: Although the dollar is still the undisputed hegemon in the world today, the gun of de-dollarization has been fired, and the status of the dollar is declining.
All of this is undoubtedly the United States' self-inflicted cocoon, having enjoyed the dividends brought by "weaponizing" the dollar, it must bear the backlash it causes, and now it is just the beginning.