Why China & Its Trading Allies Are Well Placed To Topple The Dollar
by Wolfgang Munchau
Change is good, but dollars are better, a US author of romance novels once wrote. A similarly light-hearted sentiment often inspires discussions about the future role of the US dollar as the world's leading currency. The consensus view is that the dollar is safe. I think the consensus is wrong.
The dollar is the foundation of US global leadership, and the future of the dollar is therefore intricately linked to the debate about geopolitical fragmentation.
Brazil's president, Luiz Inácio Lula da Silva, asked during his recent visit to China:
"Why should every country have to be tied to the dollar for trade?… Who decided the dollar would be the [world's] currency?"
These are good questions.
The perhaps surprising answer is that he himself made that decision, together with the former leaders of the other "Brics" group of nations: Brazil, Russia, India, China and South Africa.