The collapse of the dollar — a start?

Hello dear friends! I am a pro­fess­or Panar­in Igor Nikolaevich, doc­tor of polit­ic­al sci­ences.

Today we will look at a very volat­ile and debat­able top­ic. I do not pre­tend to be excep­tion­al, to the ulti­mate truth, but I wanted every­one who watches this video to try to ask the same ques­tion as I did: the col­lapse of the dol­lar — is it pos­sible or not? Is this a myth or a real­ity, or maybe unreal­ity? But your task is to listen to my argu­ments and ana­lyze the course of cur­rent, and most import­antly, future events in the glob­al mon­et­ary sys­tem.

So, in 2006, I offered to sell Rus­si­an oil and gas for rubles, and this idea was sup­por­ted by Rus­si­an Pres­id­ent Vladi­mir Putin. On May 10, 2006, in the Address to the Fed­er­al Assembly, he clearly set tasks for the com­ing year: first: to switch to selling oil and gas for rubles and second: to cre­ate an oil and gas exchange in St. Peters­burg And third, he said even more: why would we sell for rubles not only gas and oil, but why can’t we sell oth­er products? But, nev­er­the­less, block­ing of these ini­ti­at­ives, which were sup­por­ted at the highest level, began very quickly and the St. Peters­burg Oil Exchange was cre­ated, but only in 2008. And the volume of deliv­er­ies and sales in rubles on this exchange is scanty, about one per­cent of the sale of oil in rubles.

And so it was until about 2014. In 2014, the Rus­si­an com­pany Zarubezh­neft for the first time sold a ship­ment of oil to Viet­nam for Rus­si­an rubles and slowly Rus­si­an com­pan­ies began to use the ruble to sell oil and gas. But while the volume is min­im­al.

And in Octo­ber 2018, in my opin­ion, a his­tor­ic­al doc­u­ment passes, which is signed by the Rus­si­an and Indi­an gov­ern­ment. The fact is that Rus­sia has pledged to sup­ply India with S-400 air defense sys­tems. The Amer­ic­ans were cat­egor­ic­ally against it, but India nev­er­the­less made this polit­ic­al and geo­pol­it­ic­al decision.

But what is the focus and where is the dol­lar? The fact is that our gov­ern­ment has agreed that pay­ment, for the first time in rela­tions in the field of arma­ments between India and Rus­sia, will not be in dol­lars, but in rubles. That is, the approx­im­ate value of the con­tract for the sup­ply of sev­er­al divi­sions of the C-400 is about $ 5 bil­lion. But the parties agreed that the pay­ment will be in rubles.

Thus, Rus­sia is com­ing out of the dol­lar bundle on this largest arms con­tract with its stra­tegic, mil­it­ary-polit­ic­al and mil­it­ary-tech­nic­al part­ner — India. This is an essen­tial com­pon­ent that indic­ates that the Rus­si­an lead­er­ship has, in prin­ciple, turned to prac­tic­al action.

But now let’s see what is hap­pen­ing in gen­er­al with the dol­lar and with oil and what are the pro­spects for a truly col­lapse.

If we look at the map, here we see the Caspi­an Sea and the Baku oil fields. It was there that at the end of the XIX­cen­tury, for the first time in the world, min­er­als began to be mined, which are now act­ively used. Oil is the main achieve­ment of Azerbaijan, which was then part of the Rus­si­an Empire. Baku trades and became the num­ber one fish­er­ies in the world.

More than a hun­dred years have passed, oil fields exist in oth­er regions of the world, but all the time there are two key oil exchanges: in New York and in Lon­don, which organ­ize the sale of oil for dol­lars. And on March 26, 2018, a his­tor­ic event in the field of oil deals in Shang­hai takes place: the Shang­hai Oil Exchange opens on the ter­rit­ory of the People’s Repub­lic of China, and it starts selling oil not in dol­lars, but in yuan. And look, half a year has passed since March 2018, and the sales volume in yuan has already amoun­ted to 11 per­cent of the total world mar­ket for oil. That is, 89 remained on the side of the dol­lar. This is an impress­ive suc­cess.

Why this suc­cess was achieved in the shortest pos­sible time — in six months? It was achieved only because China in 2017 became the largest con­sumer of oil, and accord­ing to fore­casts for the next 10 years, China will keep firmly the world lead­er­ship in oil con­sump­tion. Con­sequently, if a com­pany such as Ros­neft, the largest, by the way, oil sup­pli­er in the ter­rit­ory of the Chinese Repub­lic, enters the Shang­hai Oil Exchange, or, on the con­trary, con­tracts in nation­al cur­ren­cies between China and Rus­sia are signed, then the volume of oil trad­ing in dol­lars appar­ently, it will already fall to sev­enty per­cent, and there it is not far to the col­lapse of the dol­lar.

Of course, the col­lapse of the dol­lar is unlikely to occur in the next year or two. But, on the oth­er hand, if the pace of reori­ent­a­tion of the nation­al eco­nom­ies of the three giants: Rus­sia, China and India, will be focused on dedol­lar­iz­a­tion, then of course, the effect of a fall­ing dol­lar, includ­ing its col­lapse, may become a real­ity by 2020.

So will it be or not? We will see … But I urge you to look at cur­rent events in the field of oil sales, arms sales, in the field of con­clud­ing con­tracts in nation­al cur­ren­cies between Rus­sia and the coun­tries of the Euras­i­an Eco­nom­ic Uni­on, oth­er states. Any of these agree­ments in nation­al cur­ren­cies sharply nar­row the dol­lar zone, which means it col­lapses.

Thanks for atten­tion!