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Washington
Is Destroying American Power
By Paul Craig
Roberts
October 20,
2017 "Information
Clearing House"
- Readers at home and around the world want to know
what to make of the announcement that China
henceforth will conduct oil purchases and sales in
gold-backed Chinese currency.
Is this an
attack by Russia and China on the US dollar? Will
the dollar weaken and collapse from being discarded
as the currency in which oil is transacted? These
and other questions are on readers’ minds.
Below is my
opinion:
The US
dollar’s value depends on whether central banks,
corporations, and individuals are content to hold
their assets or wealth in dollars. If they are, it
does not matter what currency is used to transact
oil. If they are not, it does not matter if all oil
is transacted in dollars. Why?
Because if they don’t want to hold dollars, they
will dump the dollars as soon as the transaction is
completed and move into other currencies or gold.
What China is doing is creating a currency that
might be a more attractive currency to hold.
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It is
possible that the gold-backed Chinese currency is a
move against US power, but I see it differently. I
see it as a protection against US power.
China and Russia are disassociating from the dollar
system, because Washington, in its abuse of the
world currency role, uses the dollar payments
mechanism to impose sanctions on other countries and
to threaten them with exclusion from the payments
clearing system.
In other
words, Washington, instead of operating a fair
system, uses its world currency role to dominate
other countries. Russia and China are too strong to
be dominated, and, thus, are throwing off the dollar
system. If other countries follow, the dollar will
cease to be an instrument of US control over the
rest of the world.
To put it
in different words, Bretton Woods gave Washington
the responsibility for the world financial system.
Washington abused the power entrusted to it by using
the dollar system to destabilize other countries,
such as Venezuela currently. Washington’s abuse of
the world currency role in order to advance American
financial and business interests and Washington’s
power over the foreign and domestic policies of
other countries has set in motion forces that will
eliminate the dollar’s role as world reserve
currency.
The hubris
and arrogance of Washington are destroying American
power.
Dr. Paul
Craig Roberts was Assistant Secretary of the
Treasury for Economic Policy and associate editor of
the Wall Street Journal. He was columnist for
Business Week, Scripps Howard News Service, and
Creators Syndicate. He has had many university
appointments. His internet columns have attracted a
worldwide following. Roberts' latest books are
The Failure of Laissez Faire
Capitalism and Economic Dissolution of the West,
How America Was Lost,
and
The Neoconservative Threat to
World Order.
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