Russia Is Going To Pass A Law Formally Dumping The U.S. Dollar

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Michael Snyder

(RINF) – Russian President Vladimir Putin has introduced legislation that would deal a tremendous blow to the U.S. dollar. If Putin gets his way, and he almost certainly will, the U.S. dollar will be eliminated from trade between nations that belong to the Commonwealth of Independent States. In addition to Russia, that list of countries includes Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan. Obviously this would not mean “the death of the dollar”, but it would be a very significant step toward the end of the era of the absolute dominance of the U.S. dollar. Most people don’t realize this, but more U.S. dollars are actually used outside of the United States than are used inside this country. If the rest of the planet decides to stop accumulating dollars, using them to trade with one another, and loaning them back to us at ultra-low interest rates, we are going to be in for a world of hurt. Unfortunately for us, it is only a matter of time until that happens.

When I first read the following excerpt from a recent RT article, I was absolutely stunned…

Russian President Vladimir Putin has drafted a bill that aims to eliminate the US dollar and the euro from trade between CIS countries.

This means the creation of a single financial market between Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and other countries of the former Soviet Union.

“This would help expand the use of national currencies in foreign trade payments and financial services and thus create preconditions for greater liquidity of domestic currency markets”, said a statement from Kremlin.

For a long time, tensions have been building between the United States and Russia over Syria, Ukraine, the price of oil and a whole host of other issues. But I didn’t anticipate that things would get to this level quite yet. It is expected that Putin’s new bill will become law, and this is only one element of a much larger trend that is now developing.

You see, the truth is that Russia and China have both been dumping dollar-denominated assets for months. The following comes from a recent piece by Mac Slavo

Last year Russia began unloading massive amounts of their US dollar reserves. In the month of December 2014 alone Putin sold some 20% of the country’s U.S. Treasurys, a move that further increased tensions surrounding what can only be described as economic warfare between East and West.

Then, as if part of a coordinated effort, this summer it was revealed that China had implemented a similar strategy,dumping half a trillion in dollar denominated assets.

But that’s just the beginning of the end for the US dollar. Amid a major meltdown in Chinese stock markets the People’s Republic sold off billions in dollar assets last week in what was reported to be an effort to stabilize their collapsing financial markets.

And now, as Russia’s economy collapses under the weight of American and European sanctions, including what many believe to be widespread downward manipulation of oil prices, Vladimir Putin is sending a clear signal to the central bank of the world’s reserve currency.

China has the second largest economy on the entire planet, and Russia has the tenth largest. In recent years, these two superpowers have become much tighter. For example, just consider this headline from Sputnik News that I came across just today: “Crippling US Foreign Policy Draws Russia, China Closer Together“.

And I don’t know if you have noticed, but U.S. relations with China have turned rather sour lately. Lots of accusations about spying and trade violations have been flying around, and just this week five Chinese warships were spotted off the coast of Alaska. In the months ahead, expect our relationship with China to continue to unravel.

If China and Russia were to both fundamentally reject the U.S. dollar at some point, much of the rest of the world may choose to follow suit.

So why is that important?

The fact that most of the nations of the world use our dollars to trade with one another creates a tremendous amount of artificial demand for our currency. In other words, the U.S. dollar is valued much higher than it otherwise would be just because it is the de facto reserve currency of the planet.

As a result, we can import massive amounts of products at super cheap prices. When we go to Wal-Mart or the dollar store, we can fill up our carts with lots and lots of ridiculously inexpensive stuff. Our standard of living is way higher than it actually should be.

And because the U.S. dollar is used so widely in global trade, major exporting nations end up with giant piles of our currency which they have been willing to lend back to us at ultra-low interest rates. This has made it possible to fund our massively bloated federal government and to go 18 trillion dollars in debt.

If the rest of the world stops using our dollars and stops playing our game, we will be in a tremendous amount of trouble. The cost of imported products would absolutely skyrocket and our standard of living would go way down.

In addition, the federal government (along with state and local governments) would have to pay much more to borrow money which would rapidly create a gigantic debt crisis.

So Russia knows where they could really hurt us. Most of the “power” that America currently projects around the world is based on having the de facto reserve currency of the planet. If you take our financial power away, we would be far, far less imposing on the global stage. Sadly, the truth is that the U.S. military is rapidly shrinking and has largely been defanged by the Obama administration.

A lot of people that will read this article will not understand this, but it is very, very important to keep an eye on this emerging Russian/Chinese alliance. I believe that it is going to play a critical role in world events during the years ahead.

So do you agree with me or do you disagree? Please feel free to join the discussion by posting a comment below…

  • walkergw

    I believe the author severely over estimates the impact of a few small economies in Eurasia. I believe the author partially understands this, but believes this will usher in a new era where more and more countries move to this trend. I see no reason to agree on this. This is happening only because Russia has the force and will to make these economies accept this. The only country to gain by this is Russia and other countries are not likely to follow suit. The author also in the article misunderstands both the impact and the reasoning for Russia’s sales of foreign currency reserves including the USD. The purpose of this was to shore up the value of the Rouble. In otherwords, by buying Roubles with its reserves it was creating additional value for the Rouble. These methods are short term and did not in the end stabolize the value of the Rouble. It also did not have any long term effect on the value of the Dollar. You see, all economies do this and long term effects are not really possible. Consider, if the Rouble value goes too high, the Russian Central bank will have to take steps to reduce it or it will no be able to export any goods. SInce it is a resource economy, this would also be disasterous. It would have to lower the value by selling large amounts and this would force it to buy Dollars. For this reason, the author should be extremely careful in accepting the word of RT which is engineered to only shine a positive light on Russia.

  • No Bull

    People are sick to death of the US followed by their lap dog UK manipulating, land grabbing and destroying people with drones, gmos, oil and an arrogant attitude. No wonder countries want to change status of the dominant bully boys. I know its going to be painfull here in UK but it already is with the austerity control bull shit.

    • Dolores

      Correct! Like their TV evangelists buying bull (bible) the USA is now the land of the fee and the home of the grave.

    • Stk

      Well said sir ,
      In some ways I feel sorry for the american people as they have had their country hijacked by a bunch of extremists and they have no real avenue left available to them to effect meaningful reform, other than mass civil unrest and revolt of the population. Conditions will have to deteriorate there domestically for the majority of the population before that happens , a dollar collapse could be just that catalyst.
      The worry is that the incumbent extremists in Washington may not go down without a fight , could start a global conflict in a last gasp attempt to retain power, given their track record so far I’m less than hopeful.

  • Charles

    “The sky is falling” said the person who can’t see the big picture.

    If these actions were supposed to collapse the dollar rather than prop up two failing economies then explain why the current issue with the dollar is that it is TOO strong causing issues with US exports.

    My favorite part is when he pushes the conspiracy theory global oil prices are being manipulated to take down Russia. If that was true (it isn’t they wanted to take down the US/Canadian frackers) wouldn’t it suggest the US has a strangle hold on oil? And wouldn’t that suggest that the US could at will use that power to rein in any nation causing problems? Fuck the dollar, the US can change the price of Oil at will apparently OPEC is just a front…. LOL

    If this guy isn’t a Russian shill he’s been duped by them.

    • james ward

      You don’t consider the BRICS
      countries ALL getting off the dollar as reserve currency and using a basket of different currencies instead or how when everyone gets off the dollar in the rest of the world tons of dollars (which they don’t want) will come flooding back to the US creating inflation….think Weimar, Germany. Maybe even hyperinflation will ensue….the world does not run on oil prices alone.

      • walkergw

        Here is the thing, in order to get off the dollar, an alternative needs to be put into place. People like you and the author keep talking about leaving the dollar, but do not give an alternative. This is because there is no alternative that really meets the requirment for a global trade currency. The closest is the Euro, but this does not meet the requirments that BRICS needs to move off of a western currency, in otherwords, it is just replaceing one with another with no advantage for BRICS. None of the BRICS countries have a currency that can be used. The closest one is the Yuan, but since it has been for so long held and manipulated value, it is unacceptable as there feels like no intrinsic value to the currency.

    • STK

      I think there is a little more involved
      the US dollar is only strong when compared against other floating currencies, the FED , the ECB, BOJ are all involved in massive QE programs on the three pillar currencies , the Chinese have devalued and the Ruble is under attack from the hedge funds driving down the value.
      In this context the dollar is strong , because its the least weak of the weaklings

    • GIVVO6_B

      The dollar is kept up by fraud and the USA is way past bankrupt.

      • Charles

        The US wants the dollar down lol

        • GIVVO6_B

          The US has $200 trillion in unfunded liabilities and is the most bankrupt entity ever seen on earth. It is the reserve status of the dollar and the US military that keeps the fraud going.

  • Dolores

    The origin of the word Dollar is SORROW, Like the word dolorus!

    • walkergw

      What a sad thing to say about yourself.

  • Keith Rippey

    is this a high school newspaper? Prose, structure, ‘insight’ and research (look what I found on Google today!) are decidedly amateurish

  • GIVVO6_B

    18 trillion dollars in debt with 200 trillion dollars in unfunded liabilities and an entirely arrogant attitude to the rest of the world, I look forward to the demise of the most murderous entity in the world since the Nazis (actually USA has murdered more people than the Nazis since WW2, without considering the entire continent of liquidated Indians.) Perhaps they can start saving money by removing their moronic military from the rest of the world.

    • Mark

      are speaking of the murderous entity – being the Soviet Union- that disappeared in the early 1990’/

      • Laura Green

        The Jewish Hand in Bolshevism/Communism Not Mentioned at School
        https://www.youtube.com/watch?v=1Mlw2mlf35Y

        • GIVVO6_B

          How about all the Jews that run everything in America, such as the banks, Hollywood, and the State department.

      • Laura Green

        For your knowledge.
        Gulags in Soviet Union — Jews Run Camps Used for Extermination of Christians

        https://www.youtube.com/watch?v=RymTWpQg6wI

        • GIVVO6_B

          Nowadays it is the USA ruled by Israel that has murdered 43 million people since WW2

        • larrymotuz

          Propaganda. The Jews were ostracized and shipped to those very same gulags. Whatever your sources, they do not reflect the hundreds of years of ill-treatment of Jews, treatment that continued through the Stalinist regime.

          • gemmell

            Thank you for that comment, your shekels are in the post sir.

          • larrymotuz

            Keep 30 for yourself, sir.

      • GIVVO6_B

        Yes and the Soviet Union won WW2 by killing 80% of the Nazi army as well as all of Germany’s allies from Hungary, Italy, Romania, Finland and all the SS units formed from the conquered nations of Europe plus Spain. USA is all mouth and all lies and is only interested in stealing oil and murdering civilians.

        • Mark

          didn’t answer my post – Soviet Union was the prison of nations like Russia was under the czars- spain was neutral in WW 2

          • GIVVO6_B

            Spain sent many volunteers to Russia and they were known as the “Blue division”. You are not worth arguing with as you are ignorant. Is it because you had an American education?

      • GIVVO6_B

        Yes the Soviet Union won WW2 we all know that and America has only a big mouth.

      • GIVVO6_B

        American propaganda is only believed by Americans. Just to remind you it was the USSR that won WW2 by killing 80% of all the Germans killed on the battlefield and the USA arrived 3.5 years late.

    • james ward

      US is run by Zionazi’s and many US public are too arrogantly stupid to see what is going on….they get their faulty information from stupid biased films like American Sniper and they are just a shit pile of fascists and racists a lot of times….US resembles Nazi Germany under Hitler….Germans have become a lot better people since then.

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    • Bruce Wayne

      Right. Is that the reason why your ruble is in the toilet?

      • GIVVO6_B

        The dollar only keeps going by fraud. USA took the gold from the rest of the world at Bretton Woods to make the US dollar the reserve currency. America then based the dollar on Saudi oil. Now it is based on arrogance and a ridiculous militarist entity in a thousand bases around the earth to try and intimidate the rest of the world.Now they will not give the gold back, oil has lost most of its value and fraud alone keeps increasing its value. When more countries in the world stop using it to their disadvantage and when the dollar stops being the reserve currency, it will find its true value which is nothing.

  • The OGS

    This is in response, plain and simple, to the aggression of USA and its warmongering attitude and bully-boy economic sanctions.
    Attacking Russia economically, the largest country in the world with zero debt and zero deficit, was completely uncalled for!
    Overthrowing the government in Kiev, installing American puppets and expanding NATO right up to the Russian doorstep was not enough…
    America attacked Russia economically – as if USA was the boss, running the world, and Russia had better comply.
    Talk about backfiring! Any and all inevitable American downfall could be described only as richly deserved, heheh…
    Very richly deserved.

    • Jason Armstrong

      Napoleon could’t do it ….Hitler could’t do it .. You think US and NATO can do it ??? Bahahaha ..No way .. The Russian’s would fight to the last man and destroy them. Number one rule about war don’t invade Russia.

    • james ward

      I agree and the American people who can’t see this coming will be like a stampeding herd of cattle (not much smarter either) and they’ve been played like a Stradivarian by the Zionazi’s but it’s not funny when you consider the dead children, drowned children and murdered innocents Amerika has Caused…I call my country Amerika cuz it is 100% ZionaZi and I live here.

      • walkergw

        Anyone who uses the word Zionazi is not in touch with reality.

        • Bruce Wayne

          What did you expect from Kremlin BS Central?

        • GIVVO6_B

          It describes the racist mass murdering Zionists exactly. How else would you describe a murderous entity looking for “Lebensraum” in a country belonging to someone else. How could you better describe an entity with the biggest concentration camp ever seen on earth at Gaza. Even the German Nazis did not bomb Buchenwald every two years. There are laws in Israel no different to the Nuremberg laws making Palestinians into non-people with no rights at all. Non-Jews are not allowed to marry into the Jewish master race. They stole the capital city of Palestine and are ethnically cleansing it to make room for Jews.
          Zionazi is an exact description of what Israel is all about.

  • ZarkoI

    Great article that people should read. Everything stated here is true, and things are spiraling downwards slowly but surely. Who thinks that China or Russia likes listening to DC dictate to them…I think not.

    • walkergw

      This post reminds me that a persons intelligence can often be determined with just a very few short words. The way your craft your sentences. The way you mix and match cliches. The way your thought processes move through topics without strong direction lightly touching but not fully grasping onto them. I feel I could give you a pretty disappointing score within just a few points of accurate.

  • Albert Griggs

    GOOD! Next get the Chinese to stop lending money to the POS in Congress ….
    Make this country live within it’s means.

  • Laura Green

    Join the petition, please.
    Benjamin Netanyahu to be arrested for war crimes when he arrives in London
    https://petition.parliament.uk/petitions/105446

  • james ward

    if O’bama challenges Russia Putin will kick his A..! Russia has built up its military while O’Bama has torn down the missile system in the US…us is not prepared to fight any war and if truth be known long ago a Russian scientist stated that O’Bama was one of ours meaning Communist.

    • walkergw

      Here is a comment in which the author doesnt appear to know if he is supposed to be imitating a Russian or an American.

    • GIVVO6_B

      For your information, Russia has only a very small communist party and they have no power. You are obviously a brainwashed arrogant American. Obama is the leader of a Capitalist country and he never nationalized anything. America needs to take all its military home to save money before the dollar becomes worthless.

  • Laura Green
    • walkergw

      Veterans Today is never a must read. That is like saying your horoscope is a must read. And your horoscope is likely more accurate.

  • man on the moon

    what the war is just begining this guy said that the U.S military is shrinking but please how that is if i see the oppesite. there more spread out but not shrinking they would not be able to do what there doing if they where shrinking lie please stop lying. This article was politicly moved.

  • Terry

    Brain dead liberals will be the blame for destroying the US Economy…if Russia follows through…..

  • Bruce Wayne

    This stuff belongs on the official Kremlin BS channel. This hogwash was already puked by Pukin a long time ago. But whose currency has since gone down the proverbial toilet? Hint: It ain’t the US dollar but, you guessed it, its the rubble…

    • GIVVO6_B

      You sound like an American with your vile attitude to the rest of the world. Isn’t it about time the stupid and arrogant Americans were shown the door. That would not be hard for the rest of the world as that is what Vietnam did to them in the 1970s. The stupid Americans got a severe defeat from North Vietnam with a population of only 15million and still believe they won in spite of the fact that Saigon became Ho Chi Minh City

      • Bruce Wayne

        You just woke up now? My comment was posted more than 2 weeks ago, Kremlim krapper. Go back to sleep.

  • Ricinator

    Get paid to use the internet! Enjoy! http://www.swagbucks.com/refer/Ricinator

  • RottweilerRex

    Ok The economic implosion in the states has been delayed only by massive money printing. But the counterfeiting by the Fed can’t go on much longer. The amazing thing is that the Americans have been purposefully lulled to sleep, while the rug is being pulled out beneath them. A free publication, if member, by Amazon, called “Yankee Anti Zombie Survival Manual” covers the subject and offers rules designed to prevent your premature exit. About a week after the implosion you will start starving and soon thereafter morph into zombie-jerky, which will provide sustenance for four legged creatures. Your concerned government has prepared enough multi capacity plastic coffins for national sanitation reasons, but then you are on your own. Basically it’s useless to even give away free survival advice. 99.9% of the population has been seduced by the most effective brain washing campaign in history; a remarkable achievement, surpassing the last communist take over. Maybe it’s karmic, but if a few brain cells are still functioning preparing for the inevitable might help even the odds.

  • Mick McNulty

    For all the anti-ruble ranting which will come out of Washington and Wall Street, Westminster and The City, you can bet those with plenty of money will be buying ruble. They’ll hide it and deny it but they’ll buy it, and that says how good it is.

  • Arlene Lane

    you all have to ask yourselves the question is how many trillions has the secret government stolen to fund the huge US SECRET SPACE NAVY, and the secret SUPER SOLDIER JUMPROOM PROGRAME, they cannot act dumb any longer and keep on telling us what SPACE NAVY and what SUPER SOLDIER PROGRAME, your time is now over, or you will be eliminated by the ANDROMEDAN GALACTIC SPACE COUNCIL. because you are no longer healthy for the people of earth.

  • lawrencecarson

    Problem . . . Solution . . . Benefit.
    And here the “benefit” is the prevention of the U S Dollar becoming the battlefield of WWIII. So ok, we “get it.” But … we have not heard anyone offer up “The Solution.”
    1 – Who is responsible for “The Solution?” (A person’s name and not some corporate wall of protection, please!)
    2 – When is this person going to execute “The Solution?”
    3 – If this “person” does not act by when … what are the alternative remedial choices we U S Citizens can take.
    Dam It … Where’s the bloody “Solution?”

  • hon788

    Please send more links…yes that will work..do another 5000000
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