Joe Biden has no clue what he’s doing as President.
He thought he was helping out with the Russia-Ukraine situation.
But he ended up making everything worse, and handing the ChiComs an enormous gift.
The U.S. has the world’s reserve currency. That is incredibly important for the success of the U.S. economy, because it means the U.S. has to pay less in interest than other countries do.
This has huge second-order effects on things like oil and other commodities. If the U.S. ever lost its position as the world’s reserve currency, ordinary people would suffer significantly.
In fact, the U.S. may even end up defaulting on its debt if it comes to that.
But when Biden froze the assets of the Russian central bank, he put America’s status as the world’s reserve currency in serious danger.
That’s because the entire system is predicated on the idea that if foreign banks hold assets in dollars, they can trust that those dollars will be stable for them.
The assets that Biden froze were Russian holdings in dollars. And now, countries around the world have less faith that their dollar-based assets are going to be there for them.
Now, Saudi Arabia is about to make a big move that will threaten the U.S. status as the world’s reserve currency. They are about to allow Chinese purchases of oil to be conducted in yuan (the Chinese version of the dollar) instead of U.S. dollars.
An article on The Hill summed it up by saying, “Saudi and Chinese officials are in talks to price some of the Gulf nation’s oil sales in yuan rather than dollars or euros, The Wall Street Journal reported Tuesday, citing people familiar with the matter.”
“The talks are the latest in an ongoing effort by Beijing both to make its currency tradeable in international oil markets and strengthen its relationship with the Saudis specifically. China previously aided Riyadh in construction of ballistic missiles and consultation on nuclear power.”
“The report Tuesday also comes as the U.S. has appealed to the Saudis to pump more oil to offset soaring gas prices compounded by Russia’s invasion of Ukraine and the U.S. cutting off Russian oil imports in response.”
For years, China has been trying to slowly move its currency in the direction of supplanting the dollar as the world’s reserve currency.
Now, Biden’s foreign policy decisions have led to a serious situation that could make China the dominant global economic powerhouse.
This would be catastrophic for the U.S. First of all, it would lead to defaulting on our debt, which would crush the economy.
Second of all, it would give China newfound global prestige and influence, which they could use to export their tyrannical system around the world.
That is already being seen with the U.S.’s rush to adopt a “Central Bank Digital Currency” which would do irreparable harm to American freedom.
China cannot become the leading global economic powerhouse. And in order to stop it, America needs to stop playing the role of “world policeman” and focus instead on strengthening its economy.