us bullying fuels the worldwide anti-dollar movement

In the following is our translation of an article from RIA Novosti with commentary by Vince Dhimos.
 
Years ago, I heard President Putin say, in a Kremlin recording of a speech at the Valdai Club, that Russia wants a “strong Europe.” Now that came as a shock to me because in Europe, a “strong Europe” means a united European Union and I had always assumed that Putin, as a believer in national sovereignty, would have to oppose the dictatorial system of the EU. But then I started to realize that an overarching goal of Russia and China was the dedollarization of world trade settlements that would reduce dollar hegemony and make it more difficult for the US to wage its constant wars and bully other countries. I guessed that he was in fact talking about a strong euro to challenge the dollar.
 
My analysis of July 4, 2017 shows, based on the EU’s own charts, that the euro is indeed the best candidate by far for edging out the US dollar in international trade settlements. It is clear from these statistics that the euro is not far behind the US dollar in world trade and is becoming a viable replacement for the USD.
 
The article below (as well as other Russian analyses) shows that I was right. The author shows that Europe has been quietly striving to replace the dollar with the euro in world trade to diminish the “bludgeon” power of the US.
 
Analyst Ivan Danilov writes:
 
“The struggle for financial sovereignty is particularly acute in the European Union, where applicants for the position of the next head of the European Central Bank are swearing allegiance to the idea of ​​internationalizing the euro and protecting the European Union from dollar pressure.”
 
Not at all surprising considering Trump’s threats to sanction all countries trading with Iran. Europe is the region that wants and needs potentially lucrative Iran trade more than any other.
 
If the US finally comes to the realization that it can no longer deal from a position of raw power, it will desperately need real deal making skills, because sanctions will be out of the question. I think Washington will find that the only deal maker capable of soothing an angry Tehran in this new game is President Putin, who so far has shown remarkable skill and restraint in keeping Israel and Iran/Syria from launching a full-scale war despite the increasingly frequent Israeli missile attacks on Iranian bases in Syria.
 
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US media: the planet is slipping the leash of dollar power, what to do
 
June 6, 2019
 
Ivan Danilov
 
One of the most striking changes in the official foreign policy discourse of the United States in recent years is that the American media, diplomats, officials and experts no longer hesitate to say openly that the dollar is a financial weapon used by Washington to oppress its geopolitical rivals. A few years ago, a Russian columnist was accused of spreading conspiracy and of “writing Kremlin propaganda” for voicing the obvious thesis “the dollar is not so much a currency as an instrument of American hegemony.” Now the statement "The dollar lies at the heart of American power. Rivals create workarounds," has become the headline of a Wall Street Journal long read. The Americans have not only stripped away the mask of the imperial grin from their own financial system, but are also demonstrating a rather serious concern over their opponents (and even allies) trying to shake off dollar dependence.
 
Nowadays, defenders (including Russian ones) of Pax Americana have moved from the position "there is no problem with the dollar system" to the position "yes, the dollar system is Uncle Sam's whip, but you can’t dodge it, so everyone had better get right down to licking the American boots.” Actually, this simple message is read in numerous articles of both the world and Russian press, which periodically use international trade or statistics on transactions through the SWIFT system to demonstrate that neither the euro, nor the yuan, nor gold could “bite off” any significant part of the market in the US currency. This technique is very good in terms of propaganda, but is completely untenable in terms of economic theory.
 
The situation with alternative dollar currencies for international trade and interbank information exchange systems that can replace SWIFT is not an example of normal market competition. And it cannot be estimated on the basis of such parameters as “market share” or “consumer preference.” The situation can be explained with the help of a metaphor: imagine a country that is dependent on food supplies from an unfriendly state. In the absence of alternatives, the food supplier may blackmail customers any way he chooses, because hunger is the only alternative to subordination. Now imagine that the situation has changed and another importing country has appeared in the importing country, but the whole assortment it offers is reduced to buckwheat "with smoke" and canned stew, and is not very cheap.
 
Obviously, under the conditions of free competition, this second supplier has no chance to take a significant market share, but by the very fact of its existence it eliminates the possibility of blackmailing by hunger and breaks the entire system of relations between the victim and the blackmailer that existed before. With the dollar system – a similar situation – in order to “defang the dollar,” it is not at all necessary to create a full-fledged replacement. The emergence of enough currencies and trading systems will allow countries threatened by Washington to continue (albeit not in the most convenient form) foreign trade and financial activities, even with the introduction of total financial sanctions from the United States.
 
It is because of these risks that American experts and journalists of the Wall Street Journal find cause for concern in the attempts of the European Union, China, Russia and even India (!) To create their own foreign trade systems without the use of the dollar:
 
"US allies, seeking to weaken US control over international trade, are developing alternative systems that are independent of the US currency. The UK, Germany and France did not support sanctions, including a ban on dollar operations with Iranian banks. Thus, they set up a system to allow companies to trade with Iran without using dollars.
 
<...> Iran is a trading partner of long standing (of India. - Ed.), and India wants Iranian oil. India began using a similar alternative system in November, and, according to delivery reports, international companies are already using it to trade with sanctioned Iranian companies. China and Russia, also seeking to break away from US control, are promoting their own alternatives to the global bank transfer system, which the United States actually controls, and settles trade transactions in yuan and roubles instead of dollars. "
 
The dedollarization movement is gradually “grinding down” its administrative opponents in various countries that have suffered to some degree from American sanctions or diplomatic pressure. European, Chinese, Russian officials and captains of business are gradually getting used to the idea that it is necessary to build by-passes around the dollar system and there is simply no alternative strategy. The struggle for financial sovereignty is particularly acute in the European Union, where applicants for the position of the next head of the European Central Bank swear allegiance to the idea of ​​internationalizing the euro and protecting the European Union from dollar pressure.
 
If the current ECB leadership sabotaged the efforts of the European Commission (and specifically Jean-Claude Juncker) to increase the use of the euro in the EU and insisted that "the market must decide everything," the next head of the ECB may well become a "Euro-nationalist." The Financial Times, with some surprise, reports that one of the likely candidates for the post of the head of the European Central Bank, the current head of the Bank of France, François Villeroy de Galhau, said: “we can expect the ECB to shift from its past neutrality a more positive tone (in the matter. - Ed.) of the international expansion of the euro. "
 
[I want to remind the reader here that France was the country hardest hit by US dollar sanctions when the Obama administration brought “criminal” charges against one of its banks in 2014. Allow me to quote from my analysis of 2017:
 
“Of course, no one in EU officialdom mentions this but the US absolutely shot itself in the foot by levying a fine of almost $9 billion against the French bank BNP Paribas for settling a payment to Iran in US dollars. It was a settlement that was declared “illegal” by the US even though it was lawful in France. They were fined for using dollars. In other words, it not only was seen as gouging but also as blatant disrespect for France’s sovereignty. The US was usurping the role of the UN and the International Court, but on whose authority? This was the epitome of heavy-footed monopolar behaviour and it was undoubtedly perceived as a slap in the face to all of Europe. Though no one dares to suggest this, it was quite likely the turning point in US-European relations that encouraged Europe to use euros as much as possible in dealing with non-EU countries.” If Galhau is named as head of the ECB, I think we can expect all-out war on the USD.]
 
His position suggests quite pragmatic measures: “The practical agenda for the development of the international role of the euro strongly converges in order to create a real (European. - Ed.) unification of capital markets - with the development of fully unified European instant payment systems, integrated capital markets and possible creation of a euro-denominated safe asset.” A safe asset is an analogue of US government dollar bonds, only in European performance - that is, it must be bonds of the entire European Union, and they must become a kind of safe haven for capital, which in the case of crises traditionally seeks refuge in US dollar government bonds.
 
The ability of the United States to use the dollar as a "sanctions bludgeon" is now lower than in the past, and will decline further. Washington is facing an unenviable choice: use the “bludgeon” to the fullest at last, or, conversely, show restraint and hold on the most stringent measures for the most extreme cases. Just because fear is often the most powerful weapon. If the first few years of Trump’s presidency have taught us at least something, then we can safely bet that the White House will choose the most aggressive option with the maximum short-term effect. The irony of fate: as American journalists rightly point out, these are the kind of actions that stimulate the rest of the world to get rid of dollar dependence as soon as possible.
 
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