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Showing posts with label History. Show all posts
Showing posts with label History. Show all posts

Friday, September 5, 2025

How US is eroding its own financial power with a crisis of trust in the dollar


Once hailed as the bedrock of global finance, the US dollar now teeters on the precipice of a crisis of trust. The era of "dollar exceptionalism," where the currency stood invincible, is rapidly crumbling under the weight of Washington's own missteps, which have continuously pushed the world to look for alternatives.

A careful examination of the dollar from the perspective of currency's four basic functions, namely world currency, stores of value, payment and circulation, reveals a startling reality.

From "dollar privilege" to "global enemy"

The US dollar is being pulled into a crisis of trust by its very own mastermind. Bert Flossbach, co-founder and chief investment officer of Germany's largest independent asset management firm, Flossbach von Storch, said: "The US government's chaotic tariff policy has undermined the dollar's safe haven status."

At the heart of the dollar's fall is America's weaponization of its financial system. Since the outbreak of the Ukraine crisis, Western countries froze $300 billion in Russian reserves and expelled Russia financial institutions from the SWIFT system. These drastic measures, intended to crush adversaries, instead triggered a mass exodus from the dollar.

Many countries have accelerated efforts to de-dollarize. Even Saudi Arabia, long the guardian of the oil-dollar nexus, has started accepting other currencies for oil transactions.

In one fell swoop, the very weapon the US used to maintain its financial dominance has turned into its Achilles' heel, splintering the global financial system and hastening the decline of the dollar.

From "safe assets" to "devaluation traps"

The US dollar's stability once rested on two pillars: a robust US economy and the nation's unwavering commitment to its credit. But today, both foundations are crumbling. The US national debt has soared past $36 trillion, with debt-to-GDP ratios hitting nearly 120 percent. The Federal Reserve's response has been to print more money, fueling inflation while simultaneously weakening the dollar.

The consequences are already evident. Countries that once trusted US debt now find themselves trapped in US dollar devaluation, even traditional allies like Japan and Saudi Arabia are offloading their stakes in American debt. Worse yet, the exportation of US inflation to emerging economies, through the "dollar tidal wave" has pushed countries like Argentina and Egypt to the brink of financial bankruptcy, igniting a worldwide movement away from dollar-based reserves.

In short, the American currency has become a ticking time bomb and a "devaluation trap" rather than a safe store of value.

From "everywhere" to "restricted"

The dollar's omnipresence in global trade is retreating. America's control over the SWIFT payment system, once a crucial artery for cross-border transactions, is not as reliable as it once was. Alternatives have emerged: China's CIPS system, Russia's SPFS and the EU's INSTEX are facilitating cross-border transactions without relying on US dollars.

The most significant blow, however, may come from the "petrodollar" system. For decades, oil trading has been anchored in US dollars, cementing its dominance. But countries like Iran, Venezuela, and even the UAE are shifting toward the acceptance of other currencies for oil transactions. This transformation could be the death knell for the dollar's privileged position in the global economy.

On top of this, the rise of central bank digital currencies (CBDCs) is set to further undermine the dollar's supremacy. As countries develop their own digital currencies and enter into cross-border alliances, the dollar's role as the global middleman in trade could be rendered obsolete sooner or later.

America's self-inflicted wounds

While Washington may feel emboldened by its ability to weaponize the financial system, the consequences will ultimately be self-destructive. For one thing, the erosion of trust in US debt will raise borrowing costs for the federal government, exacerbating the already crippling national debt. Secondly, the decline of the dollar as the world's reserve currency will shrink US income from "seigniorage," the revenue generated by printing money. 

For another, as the dollar's dominance erodes, America's geopolitical influence will fade. The loss of its financial leverage means that Washington's ability to impose sanctions or exert pressure on nations will diminish, weakening its role as the global leader.

The message is clear: The world no longer wants a single currency, particularly one that is the symbol of hegemony and is increasingly wielded as a tool of coercion.

The future belongs to a more diversified monetary system: where multiple currencies, including the euro, Chinese yuan, and potentially even gold or digital currencies, will all play a larger role. This shift may be uncomfortable for America, but it is in line with the trend of history.

The dollar's downfall should be a wake-up call for the US. If Washington continues down its current path, it risks turning itself into an isolated financial island, cut off from the very system it once cultivated and ruled.

The time has come for America to take a more collaborative, less confrontational approach, or risk witnessing its global influence slip away.

The author is a commentator on international affairs, writing regularly for Xinhua News, Global Times, China Daily, CGTN etc. opinion@globaltimes.com.cn 

Rrlated posts:

Thursday, September 4, 2025

Anwar: Victory Parade a reminder to defend one’s sovereignty, joins world leaders at China’s Victory Day parade marking 80 years since WWII

 

 


 

Standing united: Xi and his wife Peng Liyuan (centre) posing for a group photo with the heads of foreign delegations and their spouses before the commemorative parade marking 80 years since the end of World War II in Beijing. Anwar (front row, fourth from left) and his wife Datuk Seri Dr Wan Azizah Wan Ismail are in attendance. — Xinhua

BEIJING: The commemorative Victory Parade held by China to mark 80 years since the end of World War II serves as a timely reminder that a nation’s sovereignty must always be defended and safeguarded.

Prime Minister Datuk Seri Anwar Ibrahim said this is even more crucial in today’s geopolitical landscape, where turmoil persists and the international system is increasingly undermined.

He cited the genocide in Gaza, where the Israeli regime continues its atrocities against Palestinians with impunity.

“For me, the celebration is a reminder that a nation must be free, independent and sovereign. A country’s independence must be respected.

“Our experience of embracing peace and resolution after World War II, and how China rose against violence and colonialism, should serve as a lesson for today’s society, especially in our region,” he told Malaysian media at the end of his working visit to Beijing and Tianjin this week.

Anwar was among the foreign leaders invited by Chinese President Xi Jinping to attend the parade at Tiananmen Square yesterday morning.

On his participation in the Shanghai Cooperation Organisation (SCO) Plus Summit 2025 in the port city of Tianjin, Anwar said that although Malaysia is not a member of the SCO, he was invited by Xi, as the current Asean Chair, to attend as a special guest and share his views on global issues.

“So we took the opportunity to attend and share our views,” he said, Bernama reported.

Anwar said he also highlighted the United Nations’ failure to fulfil its mandate in resolving major crises, which has further eroded its global influence – a point acknowledged by UN Secretary-General Antonio Guterres, who participated in the meeting.

The Prime Minister added that he had met several world leaders on the sidelines of the summit.

Among them was Myanmar’s acting President Min Aung Hlaing, with whom he discussed and followed up on the country’s peace process ahead of Foreign Minister Datuk Seri Mohamad Hasan’s visit later this month.

His meetings with Turkish President Recep Tayyip Erdogan and Egyptian Prime Minister Mostafa Madbouly, meanwhile, focused on the situation in Gaza amid Israel’s brutal aggression.

“I asked about the latest developments in Gaza. Many leaders who attended the summit also raised the issue of the ongoing atrocities in Gaza and the suffering of the Palestinian people there,” Anwar said.

He also met with his counterpart from Pakistan, Shehbaz Sharif, Cambodia’s Hun Manet and Nepal’s Prime Minister KP Sharma Oli to discuss boosting two-way trade and investment. 

Anwar departed for home yesterday afternoon after attending the Victory Parade and a banquet hosted by the Chinese President.

China's V-Day gathering to start at 9 a.m., Sept. 3 at Tian'anmen Square


Many 'firsts' in impressive formations displayed in China's massive V-Day parade

China held a massive military parade in central Beijing on Wednesday to mark the 80th anniversary of its victory in World War II, pledging the country's commitment to peaceful development in a world still fraught with turbulence and uncertainties



 

Standing united: Xi and his wife Peng Liyuan (centre) posing for a group photo with the heads of foreign delegations and their spouses before the commemorative parade marking 80 years since the end of World War II in Beijing. Anwar (front row, fourth from left) and his wife Datuk Seri Dr Wan Azizah Wan Ismail are in attendance. — Xinhua

BEIJING: The commemorative Victory Parade held by China to mark 80 years since the end of World War II serves as a timely reminder that a nation’s sovereignty must always be defended and safeguarded.

Prime Minister Datuk Seri Anwar Ibrahim said this is even more crucial in today’s geopolitical landscape, where turmoil persists and the international system is increasingly undermined.

He cited the genocide in Gaza, where the Israeli regime continues its atrocities against Palestinians with impunity.

“For me, the celebration is a reminder that a nation must be free, independent and sovereign. A country’s independence must be respected.

“Our experience of embracing peace and resolution after World War II, and how China rose against violence and colonialism, should serve as a lesson for today’s society, especially in our region,” he told Malaysian media at the end of his working visit to Beijing and Tianjin this week.

Anwar was among the foreign leaders invited by Chinese President Xi Jinping to attend the parade at Tiananmen Square yesterday morning.

On his participation in the Shanghai Cooperation Organisation (SCO) Plus Summit 2025 in the port city of Tianjin, Anwar said that although Malaysia is not a member of the SCO, he was invited by Xi, as the current Asean Chair, to attend as a special guest and share his views on global issues.

“So we took the opportunity to attend and share our views,” he said, Bernama reported.

Anwar said he also highlighted the United Nations’ failure to fulfil its mandate in resolving major crises, which has further eroded its global influence – a point acknowledged by UN Secretary-General Antonio Guterres, who participated in the meeting.

The Prime Minister added that he had met several world leaders on the sidelines of the summit.

Among them was Myanmar’s acting President Min Aung Hlaing, with whom he discussed and followed up on the country’s peace process ahead of Foreign Minister Datuk Seri Mohamad Hasan’s visit later this month.

His meetings with Turkish President Recep Tayyip Erdogan and Egyptian Prime Minister Mostafa Madbouly, meanwhile, focused on the situation in Gaza amid Israel’s brutal aggression.

“I asked about the latest developments in Gaza. Many leaders who attended the summit also raised the issue of the ongoing atrocities in Gaza and the suffering of the Palestinian people there,” Anwar said.

He also met with his counterpart from Pakistan, Shehbaz Sharif, Cambodia’s Hun Manet and Nepal’s Prime Minister KP Sharma Oli to discuss boosting two-way trade and investment. 

Anwar departed for home yesterday afternoon after attending the Victory Parade and a banquet hosted by the Chinese President.

China's V-Day gathering to start at 9 a.m., Sept. 3 at Tian'anmen Square


Many 'firsts' in impressive formations displayed in China's massive V-Day parade

China held a massive military parade in central Beijing on Wednesday to mark the 80th anniversary of its victory in World War II, pledging the country's commitment to peaceful development in a world still fraught with turbulence and uncertainties


Anwar joins world leaders at China’s Victory Day parade marking 80 years since WWII
Prime Minister Datuk Seri Anwar Ibrahim had a bilateral meeting with Chinese Premier Li Qiang at the Diaoyutai State Guesthouse yesterday. — Bernama pic
Related posrs:

China's V-Day gathering to start at 9 a.m., Sept. 3 at Tian'anmen Square


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Prime Minister Datuk Seri Anwar Ibrahim had a bilateral meeting with Chinese Premier Li Qiang at the Diaoyutai State Guesthouse yesterday. — Bernama pic



 banquet hosted by the Chinese President.

p;opi=89978449&url=https://www.malaymail.com/news/malaysia/2025/09/03/anwar-joins-world-leaders-at-chinas-victory-day-parade-marking-80-years-since-wwii/189825&ved=2ahUKEwiPrNi3ob-PAxW-xjgGHW3DEIUQvOMEKAB6BAghEAE" style="-webkit-tap-highlight-color: rgba(255, 255, 255, 0.1); display: flex; flex-direction: column; flex-grow: 1; font-family: Arial, sans-serif; outline: 0px;">Prime Minister Datuk Seri Anwar Ibrahim had a bilateral meeting with Chinese Premier Li Qiang at the Diaoyutai State Guesthouse yesterday. — Bernama pic
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China's V-Day gathering to start at 9 a.m., Sept. 3 at Tian'anmen Square


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Prime Minister Datuk Seri Anwar Ibrahim had a bilateral meeting with Chinese Premier Li Qiang at the Diaoyutai State Guesthouse yesterday. — Bernama pic



 banquet hosted by the Chinese President.

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Standing united: Xi and his wife Peng Liyuan (centre) posing for a group photo with the heads of foreign delegations and their spouses before the commemorative parade marking 80 years since the end of World War II in Beijing. Anwar (front row, fourth from left) and his wife Datuk Seri Dr Wan Azizah Wan Ismail are in attendance. — Xinhua

BEIJING: The commemorative Victory Parade held by China to mark 80 years since the end of World War II serves as a timely reminder that a nation’s sovereignty must always be defended and safeguarded.

Prime Minister Datuk Seri Anwar Ibrahim said this is even more crucial in today’s geopolitical landscape, where turmoil persists and the international system is increasingly undermined.

He cited the genocide in Gaza, where the Israeli regime continues its atrocities against Palestinians with impunity.

“For me, the celebration is a reminder that a nation must be free, independent and sovereign. A country’s independence must be respected.

“Our experience of embracing peace and resolution after World War II, and how China rose against violence and colonialism, should serve as a lesson for today’s society, especially in our region,” he told Malaysian media at the end of his working visit to Beijing and Tianjin this week.

Anwar was among the foreign leaders invited by Chinese President Xi Jinping to attend the parade at Tiananmen Square yesterday morning.

On his participation in the Shanghai Cooperation Organisation (SCO) Plus Summit 2025 in the port city of Tianjin, Anwar said that although Malaysia is not a member of the SCO, he was invited by Xi, as the current Asean Chair, to attend as a special guest and share his views on global issues.

“So we took the opportunity to attend and share our views,” he said, Bernama reported.

Anwar said he also highlighted the United Nations’ failure to fulfil its mandate in resolving major crises, which has further eroded its global influence – a point acknowledged by UN Secretary-General Antonio Guterres, who participated in the meeting.

The Prime Minister added that he had met several world leaders on the sidelines of the summit.

Among them was Myanmar’s acting President Min Aung Hlaing, with whom he discussed and followed up on the country’s peace process ahead of Foreign Minister Datuk Seri Mohamad Hasan’s visit later this month.

His meetings with Turkish President Recep Tayyip Erdogan and Egyptian Prime Minister Mostafa Madbouly, meanwhile, focused on the situation in Gaza amid Israel’s brutal aggression.

“I asked about the latest developments in Gaza. Many leaders who attended the summit also raised the issue of the ongoing atrocities in Gaza and the suffering of the Palestinian people there,” Anwar said.

He also met with his counterpart from Pakistan, Shehbaz Sharif, Cambodia’s Hun Manet and Nepal’s Prime Minister KP Sharma Oli to discuss boosting two-way trade and investment. 

Anwar departed for home yesterday afternoon after attending the Victory Parade and a banquet hosted by the Chinese President.

China's V-Day gathering to start at 9 a.m., Sept. 3 at Tian'anmen Square


Many 'firsts' in impressive formations displayed in China's massive V-Day parade

China held a massive military parade in central Beijing on Wednesday to mark the 80th anniversary of its victory in World War II, pledging the country's commitment to peaceful development in a world still fraught with turbulence and uncertainties


Anwar joins world leaders at China’s Victory Day parade marking 80 years since WWII
Prime Minister Datuk Seri Anwar Ibrahim had a bilateral meeting with Chinese Premier Li Qiang at the Diaoyutai State Guesthouse yesterday. — Bernama pic
Related posrs:

China's V-Day gathering to start at 9 a.m., Sept. 3 at Tian'anmen Square


Related posts:
Prime Minister Datuk Seri Anwar Ibrahim had a bilateral meeting with Chinese Premier Li Qiang at the Diaoyutai State Guesthouse yesterday. — Bernama pic



 banquet hosted by the Chinese President.

/2025/09/04/thumbs/550/3502767.webp 550w, https://apicms.thestar.com.my/uploads/images/2025/09/04/thumbs/300/3502767.webp 300w" style="border: none; box-sizing: border-box; color: initial; display: block; height: auto; margin: 0px auto; max-height: 500px; max-width: 100%; object-fit: cover; object-position: 0px 10%; padding: 0px; text-align: center; text-decoration-color: initial; vertical-align: middle; width: 610px;" />

Standing united: Xi and his wife Peng Liyuan (centre) posing for a group photo with the heads of foreign delegations and their spouses before the commemorative parade marking 80 years since the end of World War II in Beijing. Anwar (front row, fourth from left) and his wife Datuk Seri Dr Wan Azizah Wan Ismail are in attendance. — Xinhua

BEIJING: The commemorative Victory Parade held by China to mark 80 years since the end of World War II serves as a timely reminder that a nation’s sovereignty must always be defended and safeguarded.

Prime Minister Datuk Seri Anwar Ibrahim said this is even more crucial in today’s geopolitical landscape, where turmoil persists and the international system is increasingly undermined.

He cited the genocide in Gaza, where the Israeli regime continues its atrocities against Palestinians with impunity.

“For me, the celebration is a reminder that a nation must be free, independent and sovereign. A country’s independence must be respected.

“Our experience of embracing peace and resolution after World War II, and how China rose against violence and colonialism, should serve as a lesson for today’s society, especially in our region,” he told Malaysian media at the end of his working visit to Beijing and Tianjin this week.

Anwar was among the foreign leaders invited by Chinese President Xi Jinping to attend the parade at Tiananmen Square yesterday morning.

On his participation in the Shanghai Cooperation Organisation (SCO) Plus Summit 2025 in the port city of Tianjin, Anwar said that although Malaysia is not a member of the SCO, he was invited by Xi, as the current Asean Chair, to attend as a special guest and share his views on global issues.

“So we took the opportunity to attend and share our views,” he said, Bernama reported.

Anwar said he also highlighted the United Nations’ failure to fulfil its mandate in resolving major crises, which has further eroded its global influence – a point acknowledged by UN Secretary-General Antonio Guterres, who participated in the meeting.

The Prime Minister added that he had met several world leaders on the sidelines of the summit.

Among them was Myanmar’s acting President Min Aung Hlaing, with whom he discussed and followed up on the country’s peace process ahead of Foreign Minister Datuk Seri Mohamad Hasan’s visit later this month.

His meetings with Turkish President Recep Tayyip Erdogan and Egyptian Prime Minister Mostafa Madbouly, meanwhile, focused on the situation in Gaza amid Israel’s brutal aggression.

“I asked about the latest developments in Gaza. Many leaders who attended the summit also raised the issue of the ongoing atrocities in Gaza and the suffering of the Palestinian people there,” Anwar said.

He also met with his counterpart from Pakistan, Shehbaz Sharif, Cambodia’s Hun Manet and Nepal’s Prime Minister KP Sharma Oli to discuss boosting two-way trade and investment. 

Anwar departed for home yesterday afternoon after attending the Victory Parade and a banquet hosted by the Chinese President.

China's V-Day gathering to start at 9 a.m., Sept. 3 at Tian'anmen Square


Many 'firsts' in impressive formations displayed in China's massive V-Day parade

China held a massive military parade in central Beijing on Wednesday to mark the 80th anniversary of its victory in World War II, pledging the country's commitment to peaceful development in a world still fraught with turbulence and uncertainties


Anwar joins world leaders at China’s Victory Day parade marking 80 years since WWII
Prime Minister Datuk Seri Anwar Ibrahim had a bilateral meeting with Chinese Premier Li Qiang at the Diaoyutai State Guesthouse yesterday. — Bernama pic
Related posrs:

China's V-Day gathering to start at 9 a.m., Sept. 3 at Tian'anmen Square


Related posts:
Prime Minister Datuk Seri Anwar Ibrahim had a bilateral meeting with Chinese Premier Li Qiang at the Diaoyutai State Guesthouse yesterday. — Bernama pic



 banquet hosted by the Chinese President.