Pepe Escobar: Process to End US Dollar as World Reserve Currency Long, But Has Already Started

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TEHRAN (FNA)- Investigative journalist Pepe Escobar says Trump has no clear insight into the world economy, and adopts policies which are accelerating the process to end the rule of the US Dollar as the world reserve currency.

Speaking in an exclusive interview with FNA, Pepe Escobar said Beijing may choose the “nuclear option” and trade the oil only in the yuan, “this could be collapse of the petro-dallar. Then, we will have the beginning of a new era of international relations that will be the near end of the Dollar as the world reserve currency”.

Pepe Escobar is a Brazilian journalist and the correspondent-at-large at Asia Times. He has extensively covered the central Asia, and the Middle East developments. He appears as an analyst on various TV channels.

Below is the full text of the interview:

Q: Why is the US Dollar the world reserve currency?

A: The US Dollar is the world currency thank to what happened at the end of the Second World War, when the US economy was half of the world’s economy, and the United States was running the Western economy by reconstruction of Europe, and making investments in Latin America. That was the Dollar as the world currency, with no other competitors whatsoever. However, in the summer of 1971, when the Dollar was supposed to be backed by gold, Richard Nixon delinked the Dollar from gold and the Dollar started to be backed up essentially by nothing. So, the US could control the whole world’s economy by distributing the Dollar everywhere and by forcing people to buy Dollars and use it in their international trades. This was the case especially with oil, out of which petro-dollar emerged. Therefore, any transactions in energy world had to be done with dollars. But, now, what we are watching is the complete collapse of the system; very slowly, but surely, and with unforeseen consequences so far.

Q: Do you believe the US Dollar would be dumped by the developed countries?

A: This is impossible to dump Dollar at once, since it is the world’s reserve currency. However, the next move is already on going, which is to have a basket of currencies. The IMF is going into this direction, to have a basket of currencies which includes the Euro, Yen and Yuan. But strategic partnership is happening across the Eurasia, especially driven by Russia and China, to bypass the US Dollar altogether. Russia and China are increasing their trades in the Rubles and Yuan. Bypassing the US Dollar is practiced in the short and mid-terms by the countries which are in the Eurasia. Later they may choose their nuclear option, which is the day the Chinese tells to all major oil producers in the Persian Gulf that it buys oil and gas only in the yuan. This could be collapse of the petro-dallar. Then, we will have the beginning of a new era of international relations that will be the near end of the Dollar as world reserve currency. This is a long term process, but this has already started.

Q: How do Trump’s policies affect the position of the Dollar as the world reserve currency?

A: Trump does not have a real foreign policy. Let’s not forget he thinks like a real estate developer in Manhattan. He does not know exactly how supply chains work around the world; nor he understands how other countries are getting together to bypass the Dollar. All he thinks is if something is happening, we should attack them, or sanction them, which is what is happening in Venezuela, Iran, and many other countries. In the case of China and Russia, a trade war has been waged to block the internationalization of the Yuan and Rubles. Trump does that to even the US’s close allies, like the European Union. This encourages the nations to use their own currencies more and more. So, even Europe to do trades with Asia and South America needs to dump the US Dollar. It means we are getting closer to the day of the demise of the petro dollars. Trump’s policies have accelerated the process. When China, Russia, India and many other countries use their national currencies for the bilateral trades, the rate of the use of Dollar descends. If the world transactions by the US Dollar falls below fifty percent, the rule of the Dollar as the world reserve currency will be over.

“Trump Resolved to Destroy European Union”

An Iranian newspaper says the US aims to destroy the European Union, and Trump is the flag bearer of the collapse of the bloc.

A recent opinion piece published by Jomhouri Eslami newspaper says US President Donald Trump wants Europe to follow Washington’s policies and it seems the EU has to tolerate and accept this humiliating manner, even at the cost of losing their independence.

What follows is the full text of the editorial:
The negative feedbacks of Donald Trump’s visit to Brussels, his participation in the NATO Summit and his trip to Britain, indeed destroyed the credibility of Trump’s America.

During Trump’s recent trips, almost no announcement of cooperation and agreement was made by either European or American leaders. But in practice, he faced serious, organized and widespread opposition that had never been experienced in the history of US-European relations, especially with the NATO.

Trump postponed his trip to Europe and in particular his visit to Britain several times, and eventually headed to Europe in a situation that no one was willing to warmly welcome the President of the United States.

The British people urged him to return home by launching massive demonstrations. They insisted that he must change his policies and stop creating tensions, racism, and humiliating manners in dealing with the other countries.

However, the extent of the protests against Trump had already been anticipated, and that was why he delayed his trip to Europe and in particular to Britain several times.

He did his utmost to find a better chance to be welcomed warmly, but at the end of the day, it was beyond reach.

The British government informed Trump that they were unable to welcome him in London and had to receive him in another place to be able to provide security for him and his companions within highly secure and protected areas.

Trump tried to travel to England at any cost so that people would not say he was dissuaded from his British trip for such matters. But the mass demonstrations in London showed well that even London is not a good place for an adventurer like Trump. Although Britain, in particular since World War II, has been considered as America’s closest ally in Europe and the world, England is not able to welcome Trump in London.

Prior to his trip to Britain, Trump was also completely isolated at the NATO Summit. Although he tried to put pressure on other parties to pay the US’ military expenses on the territory of NATO, he was faced with serious opposition and protests that made the NATO summit tense.

It’s so hard for America’s global diplomacy that Trump and his associates are not only confronted with Russia and China, but also have to challenge with their allies in the NATO. The US at the same time has waged war on the European Union, Canada, Mexico and even Britain as a follower of Washington’s policies in Europe.

During his visit to Brussels where the NATO Summit was held and also in Britain, Donald Trump constantly tried to stabilise himself in a position with a bunch of non-diplomatic and humiliating statements. But in practice, the results were totally vice versa, and it gave rise to a clear and unequivocal isolation for Trump’s America.Perhaps if it was possible for him and his assistants to foresee, they would have cancelled or delayed the journey to Europe.

The fact is that protesting against Trump is not due to his personality. It is the extreme views of Trump and his assistants which elicited such unified and unexpected response.

Trump has problem with the survival of the European Union and explicitly calls for the collapse of the European Union. He personally and formally supported the “Brexit” and has even criticised British Prime Minister Theresa May for her flexibility on the issue of leaving the European Union. He even welcomed and supported France’s exit from the EU, and encouraged the French people to join the supporters of Frexit.

Trump still hopes to see the collapse of the European Union and, in particular, the collapse and destruction of the “Euro” as the single European currency, which will ultimately resolve the growing problems of America by eliminating and marginalizing the economic rivals.

While Britain is on the way to get out of the European Union, and is dealing with the increasing adverse consequences of this painful exodus, Trump is not happy with it yet. With his apparent interference, even the British are humiliated by the United States.

Trump’s sarcastic literature against Theresa May and her government was so blatant and undiplomatic that infuriated the British media, parties and people.

During this trip, Trump even determined the future prime minister of Britain! He hailed the British Foreign Secretary, Boris Johnson, and said that he is very smart and capable to become a great prime minister.

The US president now introduces immigrants as the main problem for Europeans and calls for taking action against immigrants, which is in fact a form of intervention in European affairs and policies.

The situation is so dire that French President Emmanuel Macron, who at the start of Trump’s job claimed he would not allow the United States to be isolated, is now in the front line of opposition against Trump. He says that France and the European Union have no choice but to confront and deal seriously with the US’ economic and environmental policies, as well as Trump’s positions towards the NATO.

Europe feels that following Trump’s policies will result in its humiliation and dependence. The continuation of such policies has created new trends in US relations with its allies. Washington wants them to follow the US policies and it seems they have to endure and accept this humiliating manners, even at the cost of losing independence. This is the policy that aims to destroy the European Union and has turned Trump into the flag bearer of the collapse of the European Union!