The US dollar is highly important in today’s economy for three main reasons: the huge amount of petrodollars, the use of the dollar as the world’s reserve currency, and the decision taken by US President Nixon in 1971 to end the dollar convertibility into gold.
The US currency is still a large part of the Special Drawing Rights (SDR), the IMF's "paper money." A share ranging between 41% and 46% depending on the periods.
Petrodollars emerged when Henry Kissinger dealt with King Fahd of Saudi Arabia, after "Black September" in Jordan. The agreement was simple. Saudi Arabia had to accept only dollars as payments for the oil it sold but was forced to invest that huge amount of US currency only in the US financial channels while, in return, the United States placed Saudi Arabia and the other OPEC neighboring countries under its own military protection.
Hence the turning of the dollar into a world currency, considering the importance and extent of the oil market. Not to mention that this large amount of dollars circulating in the world definitely marginalized gold and later convinced the FED that the demand for dollars in the world was huge and unstoppable.
An unlimited amount of liquidity that kept various US industrial sectors alive but, above all, guaranteed huge financial markets such as the derivatives – markets based on the structural surplus of US liquidity.
After the Soviet Union’s collapse, the United States always thought about world’s hegemony and, above all, imagined to oppose the already active Eurasian union between China, Iran, and Russia – the worst nightmare for US decision-makers – both at military and financial levels.
As early as those years, following Brzezinski’s policy line, the US analysts warned against the unification of Eurasia – to be absolutely prevented – and against the subsequent reunification of Eurasia with the Eurasian peninsula, to be avoided even with war.
At that time, the three aforementioned states still conducted their business in dollars: China wanted to keep on becoming the "world factory," Russia had run out of steam and was near breaking point, and Iran had to inevitably adapt to the rest of Sunni OPEC.
With Putin’s rise to power, Russia’s de-dollarization began immediately. The share of dollar reserves declined year after year, while Putin proposed new oil contracts. Since last year, for example, dollars cannot be used in ports.
In the case of Iran, the sanction regime – in particular – has favored the discovery of means other than the dollar for international settlements.
The operations and signs of the de-dollarization continued.
The war in Iraq against Saddam Hussein was also a fight against the Rais who wanted to start selling his oil barrels in euros, while the war in Afghanistan was viewed by China as part of the ongoing overall encirclement of its territory.
Hence the importance of the Belt and Road Initiative. The war in Afghanistan was also an attempt to stop the Eurasian project of economic and commercial (as well as political) union between Russia, Iran, and China.
As a further sanction, the United States has removed Iran from the SWIFT network, the well-known world interbank transfer system, which is also a private company.
Iran, however, has immediately joined the Chinese CIPS, a recent network, similar to SWIFT, with which it is already fully connected.
Basically, China’s idea is to create an international currency based on the IMF's Special Drawing Rights and freely expendable on world markets, in lieu of the US dollar, so as to avoid "the dangerous fluctuations stemming from the US currency and the uncertainties on its real value," as the Governor of the Chinese central bank, Zhou Xiaochuan, who will soon be replaced by Yi Gang, said.
In the meantime, Russia and China are acquiring significant amounts of gold. In recent years, China has bought gold to the tune of at least 1842.6 tons, but the international index could be distorted, as many transactions on the Shanghai Gold Exchange are Over the Counter (OTC) and hence are not reported.
According to official data, Russia is supposed to have reached 1857.7 tons. Both countries have so far bought 10% of the gold available in the world.
Meanwhile, Saudi Arabia has already accepted payments in yuan for the oil sold to China, which is its largest customer. This is a turning point. If Saudi Arabia gives in, sooner or later all OPEC countries will follow suit.
In many cases, India and Russia have already traded with Iran by accepting oil in exchange for primary goods and commodities.
China has also opened a credit line with Iran amounting to as many as 10 billion euros, with a view to getting around sanctions.
It is also assumed that North Korea uses cryptocurrencies to buy oil from China.
As devastated as its economy is, Venezuela no longer sells its oil in dollars – and it is worth recalling it can boast the largest world reserves known to date.
Furthermore, China will buy ga