Uniting Against the Dollar
Uniting Against the Dollar
The massive United States economy has been at the center of world finance for a lifetime. But that economy, and the international system based on it, cannot last forever. Anyone willing to face the reality of America’s impossibly enormous debt can see that this is an economy that is gravely sick. Other nations recognize this and seek to protect themselves—and to take advantage.
The system set up after World War ii sought to stabilize international finance around the victor, using the U.S. dollar as the main currency for international transactions. This status brings a high demand for U.S. dollars. It also means that the U.S. has been able to print or electronically create enormous amounts of dollars without the value of those dollars decreasing nearly as much as it normally would. Adding this asset to the nation’s large population, abundant natural resources, advanced industry, dominant military, geographic advantages and other blessings has helped make America the wealthiest nation in world history.
At this point, it is also perhaps one of the most financially reckless nations. In the last few years, it has printed trillions of dollars. Its exorbitant debt has doubled since 2010 and tripled since 2008, surpassing $31 trillion last year. The American government now owes 123 percent of what the entire nation can produce in a year, and still it refuses to make any meaningful cuts to its spending.
The United States has long been warned that its reckless financial spending will have consequences, but those warnings have been ignored. As it continues to make financial decisions that are mathematically impossible to sustain, as its government and society become increasingly self-destructive, as its interests clash with those of other nations, and as it uses the dollar-dominated financial system to impose sanctions on its adversaries, the dollar becomes less and less attractive, and alternative currencies and systems become more and more so.
The dollar is facing several threats, any one of which could prove fatal to an already ailing currency. It’s possible that more than one of these factors could strike at the same time. Americans should recognize that their economic system and the corresponding prosperity could collapse almost overnight.
How close are we to the moment that the global financial system will turn against America?
Beyond Its Means
Over the last 70-some years, Americans have enjoyed extraordinary prosperity, and with America’s rise, other nations were lifted out of poverty as well. Over the years, however, America has also grown increasingly materialistic.
This spirit of excess and selfishness, financed largely by debt, is one of the main morbidities killing the American economy. And when the economy collapses, so too will the society.
The average consumer credit card balance in 2022 was $5,589, according to Experian. Individuals have responded to rising costs and uncertainty by continuing to live beyond their means. The credit bureau TransUnion stated that total U.S. consumer credit card balances reached a record high of $930 billion in the last quarter of 2022, $145 billion higher than the previous year.
At the same time, the U.S. has unabatedly continued to consume goods and services in a way that feeds its already massive trade deficit. In 2021, America imported $845 billion more in goods and services than it exported. Last year, its chronic deficit rose to a new record high: $948 billion.
What happens when U.S. government institutions can no longer pay their debts to the American public ($17.4 trillion), to other U.S. government institutions ($6.9 trillion) and to foreign nations ($7.2 trillion)? What happens when trillions in imports stop flowing? Financial horror would result.
Other nations know this and have already begun decoupling from the U.S. economy.
The Decoupling Has Begun
The U.S. dollar was set up as the dominant currency for international transactions in 1944, when world leaders met in Bretton Woods, New Hampshire, as World War ii was nearing its close. The Bretton Woods Agreement tied major currencies to the dollar at a fixed exchange rate backed by gold held in vaults. However, the U.S. backed the dollar with less and less gold until 1971, when it abandoned the gold standard completely.
Today, central banks around the world are again accumulating gold at a rate not seen in more than 50 years. Last year marked a 152 percent increase in acquisition of gold by governments compared to the previous year, which the World Gold Council attributed to geopolitical turmoil and high inflation.
Leading the rush for gold were Turkey, China, India, Egypt, Qatar, Iraq, the United Arab Emirates and Oman. Many of these countries have also expressed interest in joining the brics alliance currently linking Brazil, Russia, India, China and South Africa. The alliance controls an increasing amount of gold and roughly a quarter of the world’s gross domestic product. And one of its goals is to abandon the dollar.
At the same time, these nations are uniting against U.S. sanctions.
The U.S. has dominated international finance through its currency and its influence in the Society for Worldwide Interbank Financial Telecommunication (swift) and other systems. But U.S. sanctions appear to be losing some of their punch.
The U.S. blocked Russia from access to some of these systems due to its invasion of Ukraine, yet in its 2023 forecast, the International Monetary Fund expects that Russia will be economically better off than Germany and the United Kingdom. The report added that sanctions against Russia have failed. Why? EuroIntelligence wrote: “Our blunt answer is this: A large part of the world hates us [America] more than it hates [Russian President Vladimir] Putin” (February 2).
Even during a full-scale invasion of a neighboring country, Russia appears to have more friends than enemies. And even its supposed enemies seem halfhearted. Large economies such as Brazil, China and India have remained neutral and have not imposed strict sanctions on Russia. “The world is almost united in condemnation of the war. But when it comes to sanctions, large parts of the world are united in their opposition to the West” (ibid).
Meanwhile, Iran and Russia signed an agreement in early 2023 to decouple from the U.S.-dominated system and create a system to connect their banks directly and free them from U.S. financial pressure.
Even other Western nations that depend on the U.S. financial system worked to prevent the sanctions early on. Germany, for example, has been accused of preventing serious sanctions—such as cutting Russia off from swift, the main payment method used by businesses around the world.
U.S. enemies—and allies—around the world can see these major signs that U.S. financial dominance is waning.
Since January 2016, the Asian Infrastructure Investment Bank (aiib), a multilateral development bank, has financed infrastructure projects in the Asia-Pacific region. Headquartered in Beijing, China, the aiib connects members from over 100 countries and works to undermine the use of the dollar.
The European euro and the Chinese renminbi currencies have been nibbling at the dollar’s dominance.
The formation of the eurozone in 1999 greatly reduced the use of the U.S. dollar in Europe. 2023 is seeing a similar trend in Latin America. In January, Brazil and Argentina announced early talks in the creation of a common currency and plans to invite others to join the bloc in the future. Brazilian President Luiz Inácio Lula da Silva promised while campaigning last year, “We are going to create a currency in Latin America because we can’t keep depending on the dollar.”
Brazil and Argentina are the largest and third-largest economies in Latin America. If this currency is successful, Paraguay, Uruguay and Venezuela (the other members of the mercosur trade bloc) are likely to adopt it as well.
The Bank for International Settlements, called the “bank for central banks,” claims that the U.S. system is flawed and needs to be replaced. It started the mBridge technology to connect digital currencies of central banks with one another. Between Aug. 15 and Sept. 23, 2022, Hong Kong, Thailand, China and the United Arab Emirates tested mBridge, which works independently of U.S.-connected international financial systems.
Another major factor that has upheld the strength of the dollar is its connection to oil. Most countries use the U.S. dollar as the currency for international oil trade. The foundation for the so-called petrodollar was laid in 1945, when U.S. President Franklin Delano Roosevelt met Saudi King Abdul Aziz Ibn Saud. At the time, trust in the U.S. economy and military was high.
A lot has changed since 1945. “It was the beginning of one of the most important geopolitical alliances of the past 70 years, in which U.S. security in the Middle East was bartered for oil pegged in dollars,” the Financial Times wrote. “But times change, and 2023 may be remembered as the year that this grand bargain began to shift, as a new world energy order between China and the Middle East took shape” (January 3).
On Dec. 8, 2022, Chinese General Secretary Xi Jinping signed a strategic partnership agreement with Saudi Arabia, the largest producer of crude oil in the world.
“China wants to rewrite the rules of the global energy market,” Credit Suisse analyst Zoltan Pozsar told the Financial Times. He said we may be seeing “the birth of the petroyuan” (ibid).
National Interest noted on January 3 that Xi’s trip “set off a storm of anxiety in Washington.” Saudi Arabia helped strengthen the U.S. dollar. Now it may turn to strengthen the Chinese renminbi instead.
On January 17, Saudi Finance Minister Mohammed al-Jadaan invited other countries to hold discussions for trade in their respective currencies. “Saudi Arabia’s recent announcement that the government is open to accepting payment for oil in currencies other than the dollar is a major announcement ignored by the presstitutes,” economist Paul Craig Roberts wrote on January 30. “The end of the petrodollar would have severe adverse effects on the value of the dollar and on U.S. inflation and interest rates.”
If oil is no longer sold in dollars, then a gigantic and critical chunk of international trade will begin functioning according to the interests of other nations. Demand for the dollar will drop, as will its value.
The resulting economic upheaval would affect not only the U.S. but also Europe.
“The 2008 financial meltdown was fueled primarily by America’s outrageous debt,” Trumpet editor in chief Gerald Flurry wrote. “Yet what has the U.S. done to correct that problem? Absolutely nothing” (Trumpet, October 2015). Again, the gross national debt that reached a staggering $10.3 trillion in 2008 has since tripled to $31 trillion.
The writing is on the wall. If a debt crisis explodes, the shock waves will once again be felt in Europe.
How will Europe respond this time? Biblical prophecy provides reliable clues to the answer.
In an end-time prophecy in Revelation 17, the Bible speaks of the rise of 10 authoritarian leaders in Europe that will unite in one moment. Such a dramatic political shift will almost certainly come in response to a major crisis—a crisis that drives Europe toward stronger unity and authoritarian rule. These and other prophecies led the late Herbert W. Armstrong to write in 1984 that this crisis could well be a massive banking crisis in America. Such an event, he wrote, “could suddenly result in triggering European nations to unite as a new world power larger than either the Soviet Union or the U.S.” (co-worker letter, July 22, 1984).
The mounting pressures on the American economy and the U.S. dollar raise the question: How close are we to witnessing this very crisis?
If this does in fact occur, such a crisis would hasten the fulfillment of a slew of prophecies. In the December 1991 Trumpet issue, Mr. Flurry asked, “If a real crisis develops, will the Germans call for a new führer? Your Bible says that is going to happen! That crisis will probably be triggered by an economic collapse in the U.S.” In 2015, Mr. Flurry wrote “How the Global Financial Crisis Will Produce Europe’s 10 Kings.”
The rise of this prophesied European power will be only the beginning of trouble.
Numerous prophecies show that the U.S.—one of the main descendants of ancient Israel—will be isolated in this end time. Ezekiel 38 prophesies that Russia will be a leading power during the “latter years.” Ezekiel 27 shows that Russia’s strength is derived in part from an economic alliance. A related passage in Isaiah 23 prophesies about “a mart of nations” (verse 3). Mr. Flurry explains in his book Isaiah’s End-Time Vision that this economic alliance will revolve around a European superpower—and that the alliance’s goal is to destroy the United States. Ezekiel 27 together with Isaiah 23 show that major economies such as Europe, China, Russia, Saudi Arabia and Japan are working together to bring down the U.S. Due to its economic and strategic importance and proximity to the United States, we believe Latin America will also play a crucial role in its destruction.
In the end, America will fall in an economic siege leading to a civil war (Deuteronomy 28:52; Ezekiel 5-6). This siege will have devastating consequences for the American people: “And thou shalt eat the fruit of thine own body, the flesh of thy sons and of thy daughters, which the Lord thy God hath given thee, in the siege, and in the straitness, wherewith thine enemies shall distress thee” (Deuteronomy 28:53). (Request a free copy of The United States and Britain in Prophecy, by Herbert W. Armstrong, for proof that this and other prophecies apply to the U.S.)
Read this entire biblical chapter, and notice that this prophecy connects to many end-time prophecies—all of which are warnings for our day. Just as America has failed to heed the financial warnings, it has also ignored God’s call to repentance from breaking His law, summarized in the Ten Commandments.
The Bible specifically shows that an economic war against the U.S. will be followed by a military invasion. The stage for these previously impossible events is now being set—and a looming financial crisis is a strong sign that we are nearing the fulfillment of all these prophecies.
It takes a deep study into these prophecies to see that events all around them are leading to their fulfillment. It takes an even deeper study to understand why these events must happen to motivate mankind to repent of our sins. Isaiah’s End-Time Vision takes its readers through these various prophecies and shows how they all connect.