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Jay Powell’s Punch In The Face For The American People-The Dollar Is No Longer The Preeminent World Currency

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Jay Powell’s Punch In The Face For The American People-The Dollar Is No Longer The Preeminent World Currency

June 20, 2022
By Stan Szymanski

On June 17, 2022 at a Federal Reserve research conference, Jerome Powell stood and admitted to the world that the United States Dollar was no longer the preeminent world currency:

…’Looking forward, rapid changes are taking place in the global monetary system that may affect the international role of the dollar in the future. Most major economies already have or are in the process of developing instant, 24/7 payments. Our own FedNow service will be coming online in 2023. And in light of the tremendous growth in crypto-assets and stablecoins, the Federal Reserve is examining whether a U.S. central bank digital currency (CBDC) would improve on an already safe and efficient domestic payments system. As the Fed's white paper on this topic notes, a U.S. CBDC could also potentially help maintain the dollar's international standing.’…​

As I outlined a day before the Ukraine war kicked off..‘The Ukraine Is The Financial Waterloo Of The West’ this was going to happen. This has now been evidenced by the fact that after the initial drop in its value after the American sanctions were implemented, the Russian Ruble went back to where it was before the war started and is now above that level. The day the war started it took 85 Rubles to buy a US Dollar. On March 9th, 2022 it was 138 Rubles to a Dollar. As of this morning it only takes 56 Rubles to purchase a ‘Buck’. That means the strength of the Russian currency relative to the US currency has increased approximately 34 percent in just under four months. Is it any wonder that the Fed is fishing for something to supplant the financial strength it sees diminishing in the markets every day?

Why did Putin’s medium of exchange get stronger while that of the U. S. weakened? It’s simple. In March 2022, Russia pegged the Ruble to GOLD. In the new age of inflation the Rubles’ link to GOLD gave it a floor, an inflation hedge. In contrast, the Dollar, since it is pure fiat, is only backed by the confidence that other nations have in it. The Buck lost value when in the marketplace it was weighed in the balance and found wanting when compared to an asset backed currency.

When Jerome Powell says…’As the Fed's white paper on this topic notes, a U.S. CBDC could also potentially help maintain the dollar's international standing’…he is stating that if the US just had a digital currency (its’ own cryptocurrency) that it might maintain its hegemonic stature in the world. Nothing could be further from the truth. All a national crypto would do is to to relentlessly and perfectly track the financial transactions of those who used it, mainly US citizens. It has nothing to do with why the nations of the world resent the predominance of the dollar. First, that is the resentment that stems from being financially under the thumb of the United States. Secondly, as the potency of a world power wanes (like that of a 79 year old falling over when he stops his bike), the countries of the world wish to transact business in a medium that is backed by something they can count on and not the empty promises of a government who left 9,000 of its own people to rot in a hostile country. On top of that, the rotters left 85 billion dollars of aid for the benefit of its enemy in Afghanistan. A Central Bank Digital Currency (CBDC) will not cure these ills. And if you use a debit card or a credit card the US dollar already has a digital system it has operated in for many years so a CBDC will not be a beneficial advance for the user. Mr. Powell has just told you that you may want to grab some jam and butter because The Dollar is TOAST.