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The global monetary landscape is rapidly changing, and central banks around the world are clearly paying attention. Western authorizations, for example, the freezing of most of Russia’s unfamiliar trade holds while endeavoring to endorse Russian gold, have now clarified that property privileges on unfamiliar cash saves held abroad may not be regarded.
Similarly, gold held in vaults by foreign central banks such as the Bank of England and the New York Fed is not immune to confiscation.
Other non-Western governments and central banks will be keenly interested in Russia’s decision to link the rouble to gold and commodity export payments to the rouble. In other words, if Russia begins to accept gold as payment for oil, other countries may feel compelled to follow suit.
Beside the United States, Iran, China, Saudi Arabia, the United Arab Emirates, and Qatar are the world’s biggest makers of oil and flammable gas.
All of the BRICS and Eurasian countries are keeping a close eye on everything.
Assuming that the US dollar is on out, these nations will believe their monetary forms should profit from another multilateral money related request.
Since 1971, the US dollar’s global reserve status has been underpinned by oil, and the petrodollar era has only been possible because of the world’s continued use of US dollars to trade oil and the US’s ability to prevent any competitor to the US dollar.
It appears to be the beginning of the end of that 50-year system and the birth of a new multi-lateral monetary system based on gold and commodities. The trigger was the freezing of Russia’s foreign exchange reserves.
Commodity superpowers such as China and oil exporting countries may now believe that the time has come to transition to a new, more equitable monetary system. It’s not surprising; they’ve been discussing it for years.
While it is too early to predict how the US dollar will fare, it is likely that it will emerge from this period weaker and less influential than before.
The Bank of Russia’s decision to link the rouble to gold and commodity payments to the rouble represents a paradigm shift that the western media has yet to fully grasp. These events may reverberate in various ways as the dominoes fall.
Demand for physical gold has increased. Blowups in the gold paper markets. The gold price has been revalued. A departure from the US dollar. Increased bilateral commodity trade between non-Western countries in currencies other than the US dollar.