The Republican National Committee’s platform committee adopted a new GOP platform on Monday that promises to do the following if the Republicans win the House, the Senate and the White House: “KEEP THE U.S. DOLLAR AS THE WORLD’S RESERVECURRENCY.”
As someone who manages hundreds of millions of dollars all day long, I must say this is music to my ears and it should be to any and all Americans.
I say this because right now we are on the cusp of seeing the U.S. dollar cast to the sidelines and President Joe Biden and Democrats couldn’t care less! If the U.S. dollar no longer dominates on the world stage, we, the American people, are the ones who will feel this pain.
In recent months, a troubling trend has emerged on the global economic stage: Powerful nations like the Kingdom of Saudi Arabia, Brazil and China are actively sidelining the U.S. dollar in their international trade. This shift, which sees these economic powerhouses increasingly conducting business in other currencies marks a significant departure from the dollar’s long-standing dominance as the world’s reserve currency.
We must confront the realities of this development and consider its profound implications for our nation’s economic stability and geopolitical influence.
For decades, the U.S. dollar has enjoyed unparalleled status as the currency of choice for international trade and finance. This dominance has afforded the United States significant economic advantages, including lower borrowing costs and the ability to run trade deficits without immediate consequences.
However, recent actions by Saudi Arabia, Brazil and China signal a growing discontent with the dollar’s hegemony and a concerted effort to establish a more multipolar currency landscape.
Saudi Arabia’s decision to diversify its trading apparatus away from the dollar is particularly noteworthy and many believe it is a direct shot across the bow of the Biden Administration. Historically, the petrodollar system — wherein oil transactions are conducted in U.S. dollars — has been a cornerstone of American economic policy and a critical component of our strategic alliance with the Saudis.
This shift by Riyadh not only undermines the petrodollar system but also reflects a broader reorientation of Saudi economic and geopolitical priorities, increasingly aligning with China and other non-Western powers.
Brazil and China for their part have been vocal proponents of de-dollarization. Brazil, under President Lula da Silva, has been pushing for greater economic independence from the United States, advocating for a regional currency in South America. China, meanwhile, has been strategically promoting the use of the yuan in international trade, leveraging its massive economic clout to establish bilateral trade agreements that bypass the dollar.
The consequences of these developments for the American people are profound. Firstly, the erosion of the dollar’s dominance could lead to higher borrowing costs for the U.S. government. Without the privileged status of the dollar, the cost of financing our national debt could rise, necessitating either higher taxes or cuts to essential services.
This scenario poses a direct threat to the financial well-being of American families, particularly those who are already struggling with economic uncertainties.
As the dollar loses its luster, foreign investors may seek safe havens for their capital, leading to a potential outflow of investment from the United States. This capital flight could stifle economic growth, result in job losses, and undermine the prosperity that Americans have long taken for granted.
Beyond the economic ramifications, there are significant geopolitical stakes at play. The dollar’s dominance has been a pillar of American global influence. It has enabled us to impose economic sanctions on rogue states, support our allies, and project power across the globe.
As more countries move away from the dollar, our ability to leverage economic tools in the service of our foreign policy objectives diminishes. This erosion of influence could embolden adversaries and undermine our position on the world stage.
In response to this emerging challenge, it is imperative that we adopt a robust and forward-looking strategy. We should address the root causes of global disenchantment with the dollar. This involves promoting sound fiscal policies, reducing our national debt for once, and restoring confidence in the stability and reliability of the U.S. financial system.
Next, we must reinvigorate our alliances and strengthen our economic partnerships. By fostering closer ties with both traditional allies and emerging economies, we can counterbalance the influence of nations seeking to undermine the dollar.
This requires a nuanced approach that combines economic incentives with strategic diplomacy — an approach that President Biden is clearly incapable of planning and executing.
Lastly, we must champion innovation and competitiveness at home. By investing in cutting-edge industries and ensuring that American businesses remain at the forefront of global trade, we can enhance our economic resilience and reduce our vulnerability to external shocks.
The sidelining of the U.S. dollar by the Saudis, Brazilians and Chinese is a stark reminder that we cannot afford to rest on our laurels and that when America projects weakness on the world stage, this is the end result.
As Americans, we must rise to the occasion, championing policies and politicians that safeguard our economic future and reaffirm our leadership on the world stage. The stakes are high, but with determination and foresight we can navigate these challenges and secure a prosperous future for generations to come.
Given the complexities of the current economic landscape, it is more important than ever to have a financial advisor who understands the geopolitical factors affecting your portfolio. A knowledgeable advisor can help navigate these turbulent times, ensuring your investments are safeguarded against global uncertainties.
Bob Rubin is the Founder and President of Rubin Wealth Management. Learn more at www.rubinwa.com.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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