The dollar war

Published: 11:18 PM, 29 Jun, 2022
The dollar war
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The world is coming to terms with the fallout of the Ukraine conflict, the expected crisis of food shortage, the heightening prices of oil and gas, the increase in defence budgets across Europe and the influx of refugees but it is equally significant and meaningful to observe the scenario from the viewpoint of the benefactors of this war and many others which have been fought in the last decade. Almost always, somehow, the war deals a certain boost to the value of the Dollar in the International market, and damages another currency that is opposing the victory of the Dollar. Activists like Julian Assange have opened the pandora's box of conspiracies that have been hatched by Governments of rich countries, conspiracies that were simply thought to be the product of imaginations, are now out in the open. Wars that look like conflicts between nations are in-fact engineered to keep the financial system of a powerful country in the status quo. We are witnessing another War to strengthen the Dollar and it is just the start. 

Within the context of Wars instigated by choices of national Governments to De-Dollarize their economies, there is a clear pattern. After the Second World War, the American Dollar became the most powerful currency of the World. The financial systems across the world were made dependent on the money supply of the Dollar. And with the Petro-Dollar arrangement of the United States with Saudi Arabia, the position of the Dollar above all other currencies was set. The remaining work was done by the World Bank and the IMF that are clearly Washington-run organizations. In the Cold War between the United States and the Soviet Union, all efforts were made to damage the Soviet economy, both from within and without. The invasion of Afghanistan by Soviet Union became an opportunity to drain the resources and reserves of a nation that was opposing the Dollar dominance. And so, billions of Dollars and Mujahideen from across the Muslim world were gathered in Afghanistan and the Soviet Union was defeated. After the fall of the Soviet Union, Dollar further occupied the world market. In order to achieve economic growth, the Federal Treasury of the United States only needed to print money.  

Another glaring example includes Saddam Hussain of Iraq. When he decided to oppose the Dollar dominance, within afew weeks, an invasion of Iraq was launched in 2003, wherein even more petro-Dollars were secured for the US economy. There is a similar pattern in other countries but the contrast of Internal dissent instead of external, such as, toppling of Gaddafi in Libya and other nations that saw a regime-change in the name of the Arab Spring. It was all a strategic program to protect the hegemony of the Dollar. 

At present, the saga began with the initialization of the BRICS initiative. A financial co-operation between Brazil, Russia, India, China and South Africa to offer an alternative to Trade and Commerce in US Dollars. Within afew years, Brazil was taken over by a Far-Right regime under Bolsanaro, who took the opposite steps and has brought Brazil to the table in front of the IMF. The economic growth of Brazil has been diminished and the democratic institutions are under attack. Corruption and Nepotism is high and the country is under a severe crisis. 

Continuing with our analysis, it is clear that China is now the most formidable adversary to the US. China is strengthening the Chinese Yuan and making diplomatic ties with countries in all continents. It is offering a clear alternative to the Dollar dependency. Hand in hand, China is now facing strict opposing from a consortium of US allies, namely, Japan, India, Canada and Australia. For the sake of protection, diplomacy and Dollarization, these countries are sacrificing their own interests and taking an aggressive stance against China in the United Nations and otherwise. On the other hand, China is launching its own counter-strategies. First and foremost is the Chinese One Belt Road project that revives the Silk Route of Trade and will ensure that the momentum of Chinese exports will continue despite recession in the world.  In order to deal with this threat, Americans will be making all out efforts to drain the Chinese resources in Taiwan and Hong Kong. The idea is to burden the national economy of China to weaken the Yuan and keeping the security expenditure at the maximum. And because of the military might of China, there will always be a geo-strategic objective to prefer indirect confrontation and proxy wars instead of direct military conflict. The same Dollar War strategy is obvious in the Ukraine conflict, an event that will damage the Russian efforts to prosper and De-Dollarize the region, and at the same time, European resources will be spent on security and buying technologically advanced weapons from the U.S armory. 

The Ukraine War has sent shockwaves in Europe. The economic prosperity of the whole region is shaking. The oil and gas supply lines are disrupted. Inflation is on an all-time high in Europe. The scare of Russian forces at the borders is converting the welfare budgets into security expenditure. All the investment on Industrial growth and strengthening the trade in Euros is now being converted into buying American arms. At the same time, Moscow is undergoing stringent sanctions.  All efforts being made by China and Russia to push their co-operation to develop a Dollar free region have been discarded for the time being. Engaging Russia in the war has damaged the Russian economy and the Euro at the same time, in both cases, there is progress for the Dollar. And now there is a fresh market for American arms and ammunitions. All this has been done without direct military conflict with the Russian army or the risk of a nuclear war. 

America has to ensure that there is constant war and conflict is rampant to keep its economy and its Dollar at the top. But there is a down side to this strategy. And that lies in the fact that the world is not Unipolar anymore. China is an alternative to the World Order. Washington was considered the champion of the free-market world but it has now been replaced by Beijing. The Chinese have beaten the Western liberal democracies at their own game, and that too in a timeline of two decades. The Dollar conspiracy is out in the open. In the age of information, connectivity, social media, intelligence and algorithms, no one can operate from the shadows. And so, it remains to be seen when the intelligence masses of the Superpowers of the new world will hatch their own counter-strategy to the war-soaked hegemony of the Dollar. The time for change is now, and the demise of the Dollar is around the corner. There is still hope for a day when prosperity of one nation does not mean bloodshed and destruction of someone else half way around the world, and Ukraine is yet another example, hopefully the last. 

Categories : Opinion
Imtiaz Rafi Butt

The Writer is Chairman of Jinnah Rafi Foundation.