DOLLAR COLLAPSE 2017 - CHINA AND RUSSIA DROP DOLLAR
on fireThe U.S. dollar has been the world’s strongest currency for
decades. Recently, however, this exalted position has shown signs of
weakening. A disturbing national debt situation and a sputtering
economic recovery are the main reasons why Russia and China have each
taken steps to distance themselves from the U.S. dollar.
an article in the Washington Times, Mikhail Degtyarev, a member of
Russia’s nationalist Liberal Democrat Party, has submitted a bill to
Russia’s parliament this past week that would ban the use or possession
of the American currency. The failed Moscow mayoral candidate cites fear
of a collapse of the U.S. dollar as the basis for this bill.
“If the U.S. national debt continues to grow, the collapse of the dollar system will take place in 2017,” Mr. Degtyarev says.
countries that will suffer the most will be those that have failed to
wean themselves off their dependence on the dollar in time. In light of
this, the fact that confidence in the dollar is growing among Russian
citizens is extremely dangerous,” said Mr. Degtyarev.
A similar ban
was placed on the dollar during the Soviet-era. While not quite as
extreme, this bill would prohibit Russian citizens from holding dollars
in the country’s banks, and banks would be unable to carry out
transactions in the dollar. The bill would not prevent Russians from
buying or selling dollars while abroad, however, and they could still
hold dollar accounts in foreign banks.
Financial Analyst Andrei Shenk
warns that the bill would harm Russia’s investment climate. He says,
“The American financial system, despite all its existing problems,
remains the most stable and low-risk in the world.”
This bill comes
on the heels of an announcement that the Shanghai Futures Exchange could
price its crude oil futures contract in the Chinese yuan. According to
zerohedge.com, the exchange’s chairman has stated that they are speeding
up preparatory work to secure the regulatory approvals needed to make
The U.S. dollar remains the world’s strongest currency
mainly because of its status as the petrodollar, making it the only
currency in which countries with weaker economies can purchase energy.
There have already been warning signs that the petrodollar collapse is
on the horizon and this announcement will only add credence to these
Much like the situation in Russia, the severity of this
report may be a bit overstated according to some. Experts with direct
knowledge of the plan have stated that the contract would be in both
yuan and dollars.
Nevertheless, it does appear that both world powers
are testing the waters to see what a global economy would be like
without the U.S. dollar on top.
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