The reason why the United States can dominate the world is not because of its strong economic power, nor its formidable military capabilities, nor even its advanced technological prowess. Rather, it is because the United States controls the global trade settlement system.
As humanity has entered an era of extensive division of labor, any country in the world that wants its people to quickly achieve a better life must engage in trade with other nations around the world.
The best aspect of engaging in trade with countries around the world is that it allows for the optimal allocation of resources among nations, which in turn maximizes the economic benefits of resource utilization for all countries involved.
Consequently, no country in the world dares to sever trade with the rest of the world, as doing so would mean falling behind and becoming impoverished.
Therefore, with the United States controlling the global trade settlement system, no one dares to confront the U.S. head-on. This is because the U.S. can prohibit the use of the dollar settlement system, preventing the other party from participating normally in international trade, which ultimately leads to their decline and impoverishment over time.
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The situation is clear: what countries around the world fear is not the economic strength of the United States, nor its military might, nor even its technological capabilities. Instead, they fear being banned from using the dollar settlement system by the United States, which would prevent them from conducting normal trade with other countries around the world.When our new China was just established, due to the very limited trade with countries around the world, we were not afraid of the United States at that time and would act decisively when necessary. However, as our trade volume with countries around the world increased, when the United States made things difficult for us, we had to endure as much as possible.
To put it bluntly, our tolerance towards the United States in the past was not because China has become more timid than before, but because our development path had to go through the "checkpoint" controlled by the United States.
Now, China, together with the other four BRICS countries, has jointly created the BRICS Pay settlement system, which aims to provide the world with a second trade settlement path and to constrain the United States from using the dollar settlement system to threaten other countries.
The United States is inevitably unwilling to see the emergence of the BRICS Pay settlement system, as the appearance of this system will not only directly weaken the international power of the United States, but also cause serious financial losses to the United States.
Objectively speaking, as long as the BRICS Pay system is launched, countries around the world will no longer continue to be as respectful to the United States as they were in the past.
After all, the United States is not a kind country. It not only frequently interferes in the internal affairs of other countries but also threatens, intimidates, and even extorts other countries from time to time.
The emergence of this system will make the backbones of countries around the world stronger. When the United States continues to interfere in the internal affairs of various countries, everyone will inevitably no longer give the United States a good face.
Although the United States is still very powerful, it has already piled up a lot of debt. Even if it wants to start a war, it has to consider the issue of war funding. Now it can no longer use force as freely as it did in the past.It is quite evident that the emergence of the BRICS Pay system will directly lead to a decline in the United States' deterrence power over other countries, making it difficult for the U.S. to easily coerce other nations into submission to its will. Consequently, this will significantly increase the strategic costs for the United States.
In addition to this, it will also result in a substantial decrease in the financial strength of the United States. The U.S. dollar is the lifeblood of the country, and after its deindustrialization, a large portion of the U.S. income relies on the dollar as a medium.
As the most widely circulated currency globally, the U.S. dollar possesses pricing, settlement, and wealth reserve functions. The pricing function allows the U.S. to directly gain wealth benefits. The Federal Reserve can influence the prices of goods worldwide by adjusting U.S. dollar interest rates, which facilitates the U.S. selling its own products at high prices and importing goods from other countries at low prices.
The settlement function also directly aids the U.S. in acquiring wealth because the dollar is printed in the U.S., and digital dollars only circulate within the U.S. banking system. Therefore, when the world uses dollars for settlement, U.S. banks can earn service fees from it.
The wealth reserve function goes without saying. Many individuals and even countries store their wealth in dollars, which is akin to giving their wealth to the U.S. for free use.Countries earn dollars by selling their own goods. If countries do not immediately exchange the dollars they receive for their own currency after selling goods, but instead keep the dollars in American banks for a long time, it is essentially allowing the United States to use their wealth for free.
This is because those dollars are obtained by exchanging goods from each country. After obtaining dollars, if they are not spent immediately to buy what their own country needs and bring it back, or if they do not use these dollars to buy back their own currency, but simply leave the dollars in American accounts, it is equivalent to giving goods to the United States for free.
This practice will undoubtedly increase the financial strength of the United States. The United States will use the wealth provided to it for free to develop its own economy, or to buy goods or industries in other countries, or to lend directly to other countries.
The reason why the United States has long-term financial resources is largely because everyone regards dollars as wealth and stores them in the United States, allowing the United States to have a large amount of wealth from other countries that it can use at any time.
In this case, even if the United States does nothing, it has a lot of money to use, which is the reason for its long-term financial strength. (For this, everyone can understand the United States as a bank where the whole world is eager to deposit money.)
All of this will change with the emergence of the BRICS Pay settlement system.
Through the previous series of introductions, I believe everyone has already understood the importance of the dollar settlement system to the United States. Once the dollar settlement system is weakened, the global power of the United States and the financial resources available to the United States will decline significantly.The decline of this power, along with the decline in financial resources, will have a severe impact on the United States' global status and its economy.
In summary, the emergence of the BRICS Pay settlement system heralds the eve of the collapse of hegemony and financial power. The impact on the United States is enormous; they might become enraged and try to prevent or sabotage the introduction and operation of the BRICS Pay system, which we must guard against.
Of course, the BRICS countries are not nations to be easily manipulated by the United States. Although South Africa and Brazil do not possess nuclear weapons, both countries are not weak, and China and Russia will not stand idly by while they fight alone, so there is no need for excessive concern.
It is essential to clarify one point.
The BRICS Pay settlement system cannot replace the US dollar settlement system as soon as it emerges. Regardless, the BRICS Pay settlement system is always a new system and requires time to develop and mature.
Therefore, even if the BRICS countries launch the BRICS Pay system in October, it will not have a significant impact on the US dollar settlement system in the short term.
After all, countries around the world currently hold a large amount of US dollar cash and US dollar assets, and it is impossible to spend all this money at once.
If everyone does not spend all these dollars, it is equivalent to giving away all the goods exported in the past for free to the United States. On the other hand, if everyone spends all the dollars at once, it would be tantamount to massively purchasing American goods, which would undoubtedly help the United States recover its economy.Therefore, countries around the world need a considerable amount of time to spend the US dollars they hold, and this period is also the time needed for BRICS Pay to grow.
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