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Western Media Ignore Rapid Collapse Of US Global Hegemony

Few Stories In American Outlets Make Even Passing Mention Of China-Russia Currency Deal

by Daniel Johnson


    For many years, the world's most widely accepted 'international reserve currency', the currency used by governments to pay external debts, has been the US dollar. This, in turn, keeps the US dollar stable and benefits US companies by giving them a competitive advantage in world trade. 

   This is now coming to an end, beginning with a deal between Russia and China to pay each other in their own domestic currencies, and with the rise of the Chinese Yuan as the new reserve currency for many Asian countries while doing business with Chinese firms. This has gotten covering through Al Jazeera and many international and independent outlets, but no mention on mainstream western media outlets, despite it's massive impact on US global economic power.

   On Tuesday May 20, in the presence of Chinese President Xi Jinping and Russian President Vladimir Putin, an 'Agreement On Cooperation' was signed between Russia’s second biggest financial institution, VTB, and the Bank of China, in which they agreed, among other things, to bypass the US dollar. 

     This is not the first stage of the world's transition away from the US dollar as the dominant currency. The first was China's announcement last year that they would trade oil in their own currency and inviting other countries to do the same. Trade using the Yuan has expanded rapidly, and many leading investment firms and economists are predicting the Yuan to become Asia's main reserve currency in the next few years. 

Yet the IMF, still guided by the Eurocentric principles it was founded on, still tries to push countries to use a certain set of 'approved' reserve currencies and has deliberately ignored the growth of the Chinese Yuan.  This is reflected in the IMF's continuous reporting in The Currency Composition of Official Foreign Exchange Reserves (COFER) database, which is managed by the Statistics Department of the International Monetary Fund (IMF). The currencies identified in COFER are, of course, the U.S. dollar, the Pound sterling, the Japanese yen, despite it's recent major downturn, Swiss francs the Canadian dollar, the Australian dollar, and the Euro. As they admit, all other currencies are indistinguishably included in the category of “other currencies.”

So the emergence of Chinese currency as a new reserve currency is being wilfully ignored by global development agencies in favour of western approved currencies that it is starting to outperform.

As the nations of the 'BRICS' bloc have already collectively discussed finding or possibly creating another viable currency to work with, this arrangement accelerates a process that has been a long time coming. 

    Combined with the recent sudden military reversals the US has faced in Syria and Ukraine, America's dominant role in world affairs is clearly coming to an end. 

 


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Daniel Johnson (Daniel Johnson)
Regina Sask
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