The U.S. dollar has long been the hegemon of the global monetary system, and its position is supported by the petrodollar system, which builds a complex settlement network between the United States and major energy countries such as the manufacturing powerhouses, the Middle East, and Russia.
The U.S. pays dollars to the big manufacturing countries and buys a large number of manufactured goods; Then everyone takes dollars and pays Saudi Arabia, Russia, and Australia to buy oil and iron ore as industrial raw materials for making goods. Saudi Arabia and Russia, these oil-producing countries, have a huge surplus of US dollars, the amount of which is staggering, and if the money cannot be spent, it can only be invested, and then the United States has designed a series of investment products such as treasury bonds, stocks, and funds, and then it is impossible to put American banks to earn some interest. The U.S. dollar has formed a U.S. dollar settlement system by bringing together the world's largest energy countries, the Middle East, Russia, China, the largest manufacturing country, and the largest financial country (the United States).
With the changes of the times and the adjustment of the international political and economic pattern, in 2022, the United States will suddenly remove Russia, a major energy country, from the dollar settlement system, and confiscate other people's dollars.
The abrupt exclusion of energy powers such as Russia from the dollar settlement system by the United States has not only made Russia lose its dependence on the dollar, but also caused other energy powers to begin to reassess their trust in the dollar. At the same time, as the United States has shown distrust of the manufacturing powers, and is still talking about decoupling from our trade, the manufacturing powers have also begun to consider finding alternatives, such as through local currency swaps or gold settlements to get rid of the dependence on the dollar.
The United States must not have thought that without dollar settlement, everyone rushed to ask for Russian oil and natural gas, and without dollars, the goods we made were the same as those wanted, and without dollar settlement, everyone could use gold and local currency swaps.
If the manufacturing power and the energy power really get rid of the dependence on the dollar, then the hegemony of the dollar will be greatly challenged, the dollar settlement system lacks the manufacturing power and the energy power, the United States is anxious, thinking that there is still energy in the Middle East, go to the Middle East. If manufacturing is not good, rebuilding the manufacturing industry will not be able to support a few obedient people, such as Vietnam, Mexico, India and other labor-intensive areas to work.
The manufacturing and energy countries are not stupid, they can't re-settle the system, the swift system can't be used, we can use the CIPS system. So now the United States is on its way to losing its dominant position in the global monetary system. The restructuring and rebalancing of the global monetary system has already begun, and there may be a coexistence of multiple currencies and the emergence of new settlement mechanisms.
We can see that the collapse of the hegemony of the dollar will also have a significant impact on the US economy, which has long benefited the global economy by issuing dollars, but if the dollar loses its status, the US will lose this advantage and may face more than just inflation and recession. As long as the manufacturing and energy powers do not use the dollar, the position of the US boss will soon be lost.