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Yesterday I wrote about the reasons behind the trend toward de-dollarization and how that should impact your investing strategy overall, so you're prepared for the worst when it comes.
But what about now? What immediate actions are countries taking to weaken the dollar, who is most active in the push to dethrone it, and what's going to be the world's next reserve currency?
Well, the unfortunate answer to the first part of that question is that there are several multinational coalitions now forming to create trade agreements which will allow them to do business with one another in currencies other than the dollar. And while we don't know exactly what will eventually replace the USD as the world's reserve, there is one country pushing harder and faster than anyone else to center their currency in international trade.
It's China.
While globalization led to international stability and paved the way for China's incredible ascent to superpower status and boasting the second biggest economy on Earth, it's now moving down a new path - one marked by de-globalization, bilateralism, resource nationalism, protectionism, and militarism.
On that new march, China doesn't mind trampling the dollar - not into oblivion, at least not for a few more years, but into a place where the yuan can rise.
Some of the things they're doing have been in the headlines already; you've probably already seen them. But you probably don't know how long they've been at this. It's at least a decade in the making, and it's working.
So today, I'm pulling back the curtain on how what's happening right now in the charge against the dollar, how China's actions put it front and center of that charge, and of course, what investment and trading opportunities all this opens up for you.
Let's get started.
The Most Recent Steps to Dethrone the Dollar
On December 9, 2022, at a meeting of the Gulf Cooperation Council (GCC), Saudi Royals hosted Chinese president Xi Jinping for first time, as China, a net importer of oil since 1993 and having surpassed the U.S. in 2017 as the largest importer of oil in the world, talked about paying for oil in Chinese yuan as opposed to the USD.
Since almost one-quarter of Saudi oil output now goes to China, the possible beginnings of the de-dollarization of oil, the potential end to the petrodollar regime in place since 1974 could be devastating to the dollar, as well as U.S. influence in the Middle East and globally.
Brazil and Argentina are openly contemplating creating a common currency. The United Arab Emirates and India are exploring rupee purchases of non-oil products from the UAE, potentially leading to oil purchases in rupees.
Russia and Iran are working together on a cryptocurrency backed by gold.
So are the BRICS, the nations of Brazil, Russia, India, China, and South Africa are reportedly stockpiling gold which they might tie to their own gold-backed crypto. They're also discussing a crypto tied to commodities, or rare earth elements, or…
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.