The US dollar is in big trouble. Brazil has teamed up with China to ditch the US dollar,
and instead use yuan directly when trading with each other.
Saudi Arabia is also looking to accept China's yuan as the settlement currency for oil trading
instead of using US dollars. Bricks nations such as Russia, India and South Africa are also looking
to ditch the US dollar in favor of yuan, or their own local currency. Why are countries ditching the
US dollars and embracing yuan? There are several reasons for this. First off, many countries are
just tired of being bullied by the US. The US has been forcing countries to buy oil with US dollars
for decades. If not they risk being slapped with sanctions. But things are changing as China and
Russia are leading this bricks movement to stay away from the US dollars, and the US can't really
do anything about it, as China and Russia are global superpowers armed with nukes. This could
mean a lot of trouble for the US if more countries abandon US dollars in oil trading.
Because right now, a lot of demand for the US dollars comes from oil trading as countries need
to use US dollars to import oil from OPEC countries. But now it seems that major OPEC countries such as
Russia and Saudi Arabia are looking to move away from US dollars with many countries expressing
the same intent. Besides that, there is too much uncertainty regarding the value of the US dollar
as the Federal Reserve has been printing trillions of dollars since the COVID-19 pandemic,
which subsequently led to the high levels of inflation we see today.
Although they stopped printing money in 2022 and raised interest rates to control inflation,
it looks like the feds are turning on the money printers again to provide funding facilities for
banks. Moreover, the US government also has massive amounts of debt that it even had to raise the
debt ceiling several times as the debt situation worsens. If the US defaults on its debts,
the US dollar will definitely crash and cause ripple effects in global financial markets.
This is a huge risk for countries with large US dollar reserves and debt instruments,
which is why countries are now starting to de-risk and diversify into other assets.
Now we have demand going down as countries ditch the US dollar while supply is going
up as the feds keep printing money. And to make matters worse, the recent TikTok
Congress hearing has made the US the laughing stock of the world. If more countries ditch
the US dollar, there will be a significant drop in its value as countries start dumping
billions of dollars from their reserves into the forex market in favor of other currencies,
such as the UN. But why are countries favoring the UN over the US dollar and other currencies?
Simple. Because China, as we all know, is a major exporter and importer of goods,
with many countries