The decline of the US dollar: the world turns to a new monetary system

The dollar is currently facing serious difficulties, which is a major concern. This situation is frightening because it’s an event that hasn’t happened in a very long time. A recent video showed the Russian and Chinese presidents talking, with the Chinese president declaring that radical change was underway, something that hadn’t happened for over 100 years. As a result, the dollar is losing its strength and shaking. This is a crucial moment, unprecedented in the past.

Go back in time to understand the basics

If the dollar falls and loses value, it means you lose everything you’ve accumulated – your money, your financial capacity, your wealth. So what’s really going on today? The dollar is rapidly losing its value, and unfortunately, this is an inevitable story that has been repeating itself for a long time, after every centenary. In the past, the Dutch, then the British, and finally the Americans before the Second World War, dominated and were considered the richest because of their gold.

In 1944, after the Second World War, the dollar was designated as the international currency for trade and exchanges between countries and companies. Respect for the dollar was high in those days. However, it was based on the amount of gold held by each country. In the past, trade and commerce were conducted in gold. However, as we couldn’t be transported to run major errands, we had to find alternative means. That’s why certified silver leaf was born, to make up the equivalence with the gold one possessed. So the countries with the most gold were the richest.

But in 1971, President Nixon announced that the dollar would no longer be linked to gold, and that its value would be determined by decisions taken by the US government. This meant they could print as many dollars as they wanted, which had a major impact internationally.

Read more: CBC: A new form of currency being adopted worldwide

Why is the dollar losing its value?

Today, it’s clear that the United States has run into many difficulties with other countries, and its economic sanctions have created a lack of confidence in the dollar. Venezuela, Cuba, North Korea, Syria, Afghanistan, Iraq and many other countries have realized that they can no longer rely on this currency. They have turned away from the United States and have begun to build their own alliances, such as the BRICS (Brazil, Russia, India, China, South Africa), which are seeking to turn the situation around, by creating their own currency.

Today, China, India and Russia have become major forces in the world, which has changed the game. Countries decided to meet to decide on the international currency to be used for international trade. This means that the dollar’s former privilege as an international currency is being called into question. The President of Kenya urged all those who still have the dollar to change it quickly, because the system is changing.

Alternatives to the US dollar: between CBC and Bitcoin

The BRICS has started to think about manufacturing its own currency, with the aim of breaking away from the dollar’s stranglehold. Now, there are two options: either to turn to decentralized crypto-currencies (Bitcoin) which is an unsupervised currency, a currency for free thinkers, or to a CBDC(Central Bank Digital Currency) dollar controlled by the US government. However, the digital dollar has its drawbacks, as the government has the ability to monitor your transactions and restrict your purchases. On the one hand, decentralized crypto-currencies could offer protection against currency fluctuations, and on the other hand, the digital dollar offers you more security.

We’re at a critical juncture, and it’s important to understand the financial implications of these changes. Many people will be able to take advantage of this situation if they understand the financial system, while others could become even poorer if they are not prepared and do not have adequate financial education. So it’s essential to be prepared and understand what’s going on to make informed decisions.

Totally inspired by Zack Mwekassa’s vacuum