Imperialism of the Dollar

In the mess of the globalized capitalist system, the U.S. currency is the global reserve. It supports the majority of currencies, intervenes in most commercial transactions and financial operations and serves as an international means of payment.

Given this context, its collapse would mean the end of the dollar standard, starting a globalized crisis which no capitalist state will survive. If the U.S. and its dollar succumb, the economy and the capitalist system will burst on a global scale.

According to international analysts, there are three principal reasons for which no power — central or emerging — would be able to extract itself from the current functional model of the capitalist system, which is cemented around the dollar standard, or from the hegemony of the U.S. as the top imperial power. The dollar is the currency of exchange, countries on every continent use it in their commercial transactions and the majority of their reserves are in dollars. The end of this currency would create a global collapse.

More than 70 percent of the global reserves are in dollars. Twenty five percent are in euros from the European Union, which also uses the dollar. According to the World Bank and IMF, China, the third largest global economy after the U.S. and the European Union, has its reserves in dollars.

According to the Bank for International Settlements — the central bank of central banks — the dollar is entrenched in 86 percent of the $3.2 billion worth of daily exchange transactions, as an intermediary in the exchange between two other currencies. Although this constitutes a decrease from the 90 percent that it was in 2001, to date, no other currency comes close.

Almost two thirds of the reserves of the world’s central banks are kept in dollars, despite fears that a massive exodus of the currency will occur. The BIS forecasts that the dollar will continue to be “the favored currency of central banks” and represents 55 percent of its assets-liabilities in foreign currency.*

According to World Bank and the U.S. Department of Commerce, 80 percent of international transactions, 70 percent of imports worldwide and almost all business in the oil trade occur in dollars.

The international speculative financial system is “dollarized,” and the international stock markets operate mainly with U.S. currency through stocks and bonds globally dispersed by large banks and investment funds based on Wall Street.

The New York Stock Exchange is the most important money market worldwide, and has the largest volume of financial operations carried out by global contributors, that is to say major multinational companies of the U.S. and the world. If the dollar collapses as a currency, Wall Street will explode, dragging with it all of those money markets.

According to World Bank, emerging countries and developed economic powers generate more than 75 percent of the global GDP in dollars. The rest is produced in euros and other currency. For the countries with a strong dependence on the export of raw materials such as oil, the figures can be higher. The dollar is deeply ingrained in global commerce. Companies reduce the cost of transactions and use the dollar as a common currency.

Multinational companies and financial groups that control the speculative financial systems and productive economic systems on global proportions — beyond governments — mostly make investments, turnovers and profits in dollars. Therefore, the extreme collapse which the supporters of the “decoupling” theory predict would paralyze global economic activity in just a few hours.

To undo this plot of “the imperialism of the dollar,” a new international and economic financial system must be formulated and designed. The U.S. must be convinced to forget its nuclear military arsenal, its seven atomic fleets, its nearly 1000 military bases distributed across the globe, and to “peacefully” renounce its role as the hegemonic power of the capitalist system.

*Editor’s Note: The original quotation, accurately translated, could not be verified.