The Dollar at the center of Vladimir Putin's interview

Vladimir Putin’s interview with American journalist Tucker Carlson was a colorful one, especially their conversation about the dollar.

The end of the dollar hegemony?

The exchange lasted over two hours, mainly covering the war in Ukraine. But Tucker Carlson, who had already been cautioning Americans about the consequences of the end of the dollar’s hegemony last April, also revisited this key subject.

In response to a question about the dollar’s role in the world in light of recent sanctions against Russia, Vladimir Putin was sharp in his reply.

“Using the dollar as a foreign policy weapon is one of the greatest strategic mistakes made by American political leaders. The dollar is the cornerstone of U.S. power.

I believe it is very well understood that no matter how many dollars are printed, they quickly get dispersed around the world. [Resulting] in minimal inflation in the United States. It’s around 3 or 3.4%, which I think is completely acceptable for the United States. But they won’t stop printing.

The debt exceeds $33 trillion, yet in spite of this, the United States uses the dollar as the main weapon to maintain their power worldwide. Political leaders have struck a blow to American power the moment they decided to use the U.S. dollar as a tool for political strife. I wouldn’t want to use too strong language, but it’s a foolish thing to do, as well as a serious mistake.”

For the Russian President, Washington is shooting itself in the foot, which is probably not without some pleasure to him. Indeed, Vladimir Putin has been calling for years for the dedollarization of global trade, well aware that this represents the Achilles’ heel of the Empire.

“Look at what’s happening in the world. Even America’s allies are reducing their dollar reserves. Everyone is beginning to look for ways to protect themselves. The fact that the U.S. imposes sanctions on certain countries through restrictions on transactions, freezing foreign exchange reserves, etc., is causing great concern and sending a signal to the entire world.

Until 2022, about 80% of Russian international transactions were carried out in dollars and euros. The dollar accounted for about 50% of our transactions abroad. Now, it’s only 13%. It wasn’t us who banned the use of the U.S. dollar. We had no intention [Putin smiles broadly]. It was the United States that decided to restrict our transactions in U.S. dollars. […] Our transactions in yuan were 3% before; today, 34% of our transactions are conducted in rubles and about as much in yuan.”

[…] Additionally, other countries, including oil producers, are considering and already agreeing to sell their oil in yuan. Do you realize what’s happening? Does anybody in the United States understand? What are you doing? Ask any intelligent and reflective person in the United States what the dollar means to the U.S. You are killing it with your own hands.”

Ep. 73 The Vladimir Putin Interview pic.twitter.com/67YuZRkfLL

— Tucker Carlson (@TuckerCarlson) February 8, 2024

In short, Vladimir Putin suggests that it is not he who has fallen into a trap in Ukraine. But rather the United States. Freezing $300 billion in dollars and euros and disconnecting Russia from the SWIFT network has triggered a global rebellion led by the BRICS.

All the wars that the United States wages ultimately aim to protect the exorbitant privilege conferred by their monetary hegemony. But it seems the world has had enough.

If major nations stop trading in dollars, it becomes unnecessary for their central banks to hold dollars (as U.S. debt). The direct consequence will be a depreciation of the dollar. It will no longer be possible for the United States to enjoy a chronically deficit trade balance.

All this will translate into inflation. Put differently, Americans will have to tighten their belts. And that shouldn’t hurt the planet, nor the Americans, besides…

The world will need a replacement for the dollar sooner or later. And let’s get this straight, it won’t be the barbarous relic, but bitcoin.