In a recent Mailbag edition, I responded to a couple of readers’ questions about the U.S. dollar’s reserve currency status.
In 1944, the Bretton Woods System pegged all currencies to the U.S. dollar. That system remained in place until the 1970s.
But although it has had many challengers since then, the U.S. dollar reigns as the primary reserve currency to this day.
I briefly touched on a few of those challengers in my response to the readers. And I mentioned that I had covered some of these in my 2018 book, Collusion: How Central Bankers Rigged the World.
Recently, China purchased coal and oil from Russia in yuan. This was likely in response to Western sanctions against Russia.
The emergence of a so-called petroyuan may prove a credible threat against the U.S. dollar’s domination over time. (Petroyuan refers to oil futures contracts priced in yuan.)
But China pushing its currency forward on the world stage is nothing new. Nor is its alliance with Russia…
So today, I’m sharing an extract of Collusion with you.
It’s all about China’s efforts to undermine the U.S. dollar and have its own currency recognized.
It essentially amounted to a declaration of monetary policy warfare against the U.S. dollar and a challenge to the old economic order.
Cast of Characters
Here are some names you’ll want to keep in mind as you read the excerpt…
Ben Bernanke: Chair of the Federal Reserve of the United States from 2006 to 2014.
Timothy F. Geithner: U.S. Treasury secretary from 2009 to 2013. President of the Federal Reserve Bank of New York from 2003 to 2009.
Luiz Inácio Lula da Silva: President of Brazil from 2003 until 2011 (reelected in 2006). He was the founder of the leftist Workers Party.
Zhou Xiaochuan: Governor of the People’s Bank of China from 2002. In 2009, at a pivotal moment of financial instability, Zhou gave a speech titled “Reform the International Monetary System.” It questioned the role of the dollar as a reserve currency. Zhou pressed for and achieved the yuan’s inclusion in the IMF special drawing rights (SDR) basket.
There will also be a glossary of terms at the end of the excerpt for your reference. To read the excerpt, follow this link.
Editor, Inside Wall Street with Nomi Prins
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