The world is truly off it’s axis to put it mildly! Today’s blog will look at China and Saudia Arabia. These two countries will have a major impact on the future value of the US Dollar. First, lets look at the DXY index, (US dollar index):
It’s 108.5 and climbing! European economies are collapsing fast due to out of control inflation, they are fleeing to the USD! Not to mention the Fed is still raising rates. As we mentioned in past blogs, this strengthens the dollar. Remember, the Euro has now reached dollar parity. This will also cause flight to the USD. However, the US is at 128% debt to GDP, top five in the world for that debt ratio. Since the sanctions against Russia were levied, the Ruble has strengthened along with the USD. Europe is the loser in all this as are Africa and Latin America.
Then, along comes the BRICS nations. Brazil, Russia, India, China, South Africa. They are now gaining interest from Argentina, and SAUDI ARABIA! The Saudi’s were forced to trade oil for US dollars after WWII. This created the petrodollar system. Now, Saudi Arabia is seriously considering joining the BRICS nations and selling oil for their currencies which, by the way, are backed by Gold! Click here to view an article about it.
Meanwhile, China, is doing this at the present time: