Some suspect that NATO’s (i.e. the US) militancy on the Ukraine issue, plus military build-up in general, has to do with fears that control over world finance is slipping away. The renminbi is still a long way from replacing the dollar but is being used in more and more international financial transactions.
In many ways, the US has itself to blame. The fact that it arbitrarily steals countries’ dollar balances has made more and more people reluctant to hold dollar accounts. Not least China itself. But French President Macron has also expressed a desire to move away from dollar dependency. As have many other heads of state.
As uncomfortable as this may be for US self-confidence, it may still be a blessing in disguise. At least that’s the view of Per Lindvall, who (building on Zoltan Poszar at Credit Suisse) points out how access to easy credit has driven their industry out of the market. This is what is known as the ‘Dutch disease‘. Another historical example could be when Spain’s access to cheap South American silver meant that it did not invest in domestic production capacity and in a hundred years turned into a poor agricultural country.
Of course, such things hit unevenly. US rentiers probably benefit from not having to deal with complicated production processes, while the majority of the population suffers from unemployment and falling wages. As long as the rentiers are in power, the government will continue to defend the international status of the dollar. To the ruin of the country.
Activists for Peace 