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SHOCKING! What The Central Banks JUST ANNOUNCED About The Dollar Will Change The World Forever

The Analyst (New Real Media)
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Published on 21 Nov 2022 / In News and Politics

SHOCKING! What The Central Banks JUST ANNOUNCED About The Dollar Will Change The World Forever

#centralbank #dollar #economy


The United States has been "very trigger-happy" in its application of severe economic measures. However, national governments may soon diversify their foreign exchange holdings away from the US currency.

Expert Gal Luft claims that central banks are starting to raise concerns. And he said they have doubts about whether or not it is prudent to place so much hope in the dollar.

He went on to say that the United States has overreached and been overly quick to resort to economic sanctions. And if this turns out to be accurate, it will have far-reaching effects on the global economy.

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Luft characterized recent US actions as "unacceptable and unprecedented." For instance, cutting Russia off from the SWIFT interbank messaging system and essentially freezing the country's central bank deposits.

He also mentioned that one in every ten countries is subject to US sanctions.

Now, this is starting to add up. And that's why central banks are reducing the dollar's weight in their holdings.

His remarks follow a report in the Wall Street Journal that Saudi Arabia is accelerating negotiations with China to take yuan instead of dollars for oil that Beijing purchases.

Now, the United States has been able to run "massive deficits" because oil is often priced in dollars. But sanctions prompt countries to seek alternatives to the US dollar.

And there is a "lack of knowledge" amongst the American political elite regarding the repercussions of their acts.

According to Luft, the United States sanctions countries "right and left." But it also needs foreign buyers of Treasury bonds to help pay off its debt. And he thinks it's not possible to continue on like that.

Luft, who is also a senior advisor to the US Energy Security Council, spoke on the unpredictability of the international energy market.

He warned that things were looking bleak since what we're seeing now is essentially a second heart attack. These are the Covid epidemic and the Russian-Ukrainian conflict he is referring to.

After that, Luft said that a "new world order" was emerging alongside a global realignment of energy, financial, and geopolitical systems.

A strengthening dollar is terrible for other currencies. Central banks are intervening.

Now, inflation in the United States remained strong, prompting the Federal Reserve to hike interest rates five times this year.

And in response to the rate hikes, investors' returns on US assets have increased, bringing more capital into the US and boosting the dollar's value.

Compared to the rest of the globe, the economy of the United States is doing better. And even those who fear a worldwide economic collapse are pouring money into the world's greatest economy. The dollar may become even more stable as a result of this.

Moreover, the relative values of the currencies of other nations have declined. Japan, China, India, and the United Kingdom are just a few countries whose stock markets have been rattled by these developments.

The actions of the Federal Reserve have a variety of effects on the economies of neighboring areas. And when a country's currency declines, it must pay more to import necessities like food and energy.

That damages families at home, drive up business prices, and may even impact the international economy.

Now, due to the rise in the dollar value, it is now more difficult for international borrowers to repay loans denominated in US dollars.

A lot of money from overseas investors has been coming into the United States. And the expense of borrowing from overseas countries is reflected in higher rates on foreign sovereign bonds.

In addition, the uncertainty in international financial markets is a problem for US policymakers. Inflation is too high and has to be brought under control.

However, the remedy is starting to cause financial instability: high-interest rate hikes. Therefore, it might escalate into major instability, according to some experts.

Yet, the Fed has demonstrated little inclination to abruptly alter its current track. Further rate hikes are anticipated later this year and into 2023.



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