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==Origins==
In August 1971, [[President Richard Nixon]] ended the convertibility of U.S. dollars into gold, in the face of mounting inflation and debts caused by out-of-control government spending simultaneously on social programs and the [[Vietnam war]]. This caused a run on U.S. gold reserves and the value of the dollar to free fall. On June 9, 1974, Nixon addressed this issue by signing a series of bilateral agreements with Saudi Arabia, in which the latter country would use its political influence to coerce [[OPEC]] into standardizing the sale of oil in dollars, therefore preserving the dollar's status as the global reserve currency in the post-Bretton Woods era.<ref>[https://www.investopedia.com/articles/forex/072915/how-petrodollars-affect-us-dollar.asp][https://www.fxcm.com/uk/insights/what-is-the-petrodollar/ investopedia]</ref>
The U.S. sold dollars needed for international transactions by issuing Treasury debt, which is a universally fungible international medium of exchange. Virtually all transactions for oil globally had been conducted in dollars until late 2022 when Saudi Arabia began accepting [[Chinese]] yuan. This gave the U.S. an “exorbitant privilege” in that it could issue an unlimited stream of Treasury debt to the world. One of the consequences of this arrangement is that it has allowed the U.S. to spend far beyond its means, running up $32 trillion of debt since 1980, when its [[national debt]] stood at a mere $1 trillion.
When the [[Federal Reserve]] raised [[interest rate]]s to take care of U.S. needs, it made [[capital flight|capital flow out]] of other countries, and the value of their currencies fall, forcing [[inflation]] on them. Not a single country in the world was left untouched. Many countries did not want to be held hostage to the implicit and explicit negative consequences of dollar [[hegemony]], and wanted to remove the “exorbitant privilege” that they believed the U.S. abused to their individual and collective detriment.
On June 12, 2024, BRICS News [[tweet]]ed, "Saudi Arabia's 50-year-old petrodollar agreement with the United States has expired, with no new agreement in place. Saudi Arabia will now sell oil in multiple currencies, including the Chinese RMB, [[Euro]]s, [[Yen]], and Yuan, instead of exclusively in US dollars."<ref>[https://twitter.com/BRICSinfo/status/1801005240658858443 BRICS News], Jun 12, 2024. twitter.com/BRICSinfo</ref>
When dollars flow back into the United States from abroad, they are most often used to purchase [[US]] [[stock market|stocks]] or [[real estate]]. This makes various stock indexes on [[Wall Street]] more of a reflection of the [[globalism|global economy]] than as it traditionally has been interpreted as a reflection of the health of the US domestic economy. Likewise, the purchase and control of real estate by foreign principals is of concern to most US states and localities.
===De-dollarization===
[[De-dollarization]] is the process of freeing countries from use of the [[dollar]] to denominate the values of goods and services exchanged. The use of the dollar means that all of the transactions pass through the American banking system, which means that the United States has a [[monopoly]] information flow of who is selling what to whom. This American domination and an exclusive [[commercial]] advantage is removed when trade is conducted in national currencies and do not go through the United States banking system. De-dollarization is a consequence of American abuse of the power of the dollar as the global reserve currency. It is the abuse of the global financial system by spendthrift [[Congress]]es and the [[Federal Reserve Board]] of printing excess dollars in circulation and offering nothing of real value in terms of manufactured goods or services to back it up, thus robbing the rest of the planet.
The [[BRICS]] group, led by Russia and China began building an international finance and trading system that does not rely on dollars, that uses countries’ local currencies, gold, oil, or other assets to trade. The U.S. abuse of economic sanctions to [[blackmail]] and punish other countries that did not bend to America's will added to the impetus. The rise of BRICS means that the US dollar will, at a minimum, lose its relative [[monopoly]] on [[oil]] and [[gas]] trades and sales.
If the world favours a second, gold-based settlement system and opts out of the [[fiat money]] dollar, which is no longer backed by value. This could lead to the end not only of dollar settlement, but also of the dollar imperium. The US has so far been able to pay for everything in the world with its freshly printed money that has no cover at all and to increase its prosperity in exchange for “fiat money”. If this were no longer possible, if the countries of the world no longer accepted worthless dollars, the [[USA]] would no longer be able to buy all the world's goods with them, to pay for 900 billion dollars in [[military]] expenditure and to cover its financial [[deficit]]s. Dollar dominance will inevitably fade and the dollar decline as the world's top reserve currency, though it will undoubtedly continue to survive in that capacity in parts of the world where the US continues to have considerable political and economic leverage, like [[Latin America]]. In this respect, the financial boycott against Russia and a counter-reaction by the world could result in the collapse of the dollar empire.
[[Elon Musk]] explained the process of de-dollarization succinctly: "The United States has overplayed its hand in weaponizing the dollar with sanctions...You're now seeing a lot of countries de-dollar their transactions because we’ve forced it...And this goes beyond even Russia, China, and Iran...Countries like Brazil or India still want to transact with Russia...They can’t do it with dollars, so we've forced them to de-dollarize their transactions, thus weakening the strength of the dollar in the world."<ref>[https://www.realclearpolitics.com/video/2023/10/25/elon_musk_the_risk_of_world_war_three_is_increasing_rapidly.html Elon Musk: "We Are Sleepwalking Our Way Into World War Three," "Putting Civilization Itself At Risk"], Posted By Tim Hains, October 25, 2023. www.realclearpolitics.com</ref>
Russian State Duma Chairman Vyacheslav Volodin observed on June 14, 2024, "The [[dollar]] has become [[toxic]]...[[Washington, D.C.|Washington]] has totally undermined [[trust]] in the dollar as a global reserve currency by imposing [[illegal]] sanctions against our country’s financial institutions."<ref>[http://duma.gov.ru/en/news/59478/ Vyacheslav Volodin: USD became toxic], June 14, 2024. duma.gov.ru</ref>