Ever since President Nixon dismantled the gold standard back in 1971, the value of our U.S. dollar has hinged entirely on the full faith and credit of our federal government. The Federal Reserve’s aggressive monetary contraction has boosted the greenback in foreign exchange markets, but the White House seems intent on actively undermining the dollar’s true strength – its global dominance.
Under President Biden, we’ve seen strained relations with Saudi Crown Prince Mohammed bin Salman and a reluctance to unleash domestic oil production. As a result, the dollar is now under threat from the rising Chinese yuan. Saudi Arabia is considering using the Communist Party’s currency for its oil trades, and France is already on board.
Senate Republicans are demanding answers from the Federal Reserve as we witness a potential collapse. In a surprising move, a Chinese oil company completed a yuan-settled liquefied natural gas trade with none other than our oldest ally, France. This comes as we attempt to convince our allies to avoid Russian oil markets, driving them into the arms of China.
The global dominance of the greenback has been dwindling for years, and Beijing has plans to unseat the dollar’s prominence. Biden’s ineffective foreign policy has left a void for China to exploit, as seen in Saudi Arabia, where the crown prince may soon accept yuan instead of dollars for oil sales to China.
Biden’s administration has refused to fill the Russian oil void or engage diplomatically with China. The Federal Reserve, led by Chairman Jerome Powell, has done its part to maintain the dollar’s value, but it cannot repair our international relationships or influence the dollar-yuan convertibility. “Fed Chairman Jerome Powell cannot go to Saudi Arabia and beg the kingdom to continue to demand dollars for oil. He cannot allow new drilling permits to export oil to our European allies who are voluntarily starving themselves of Russian oil in support of Ukraine, and he cannot coerce the Chinese into stabilizing the convertibility of the dollar to yuan.”
Although we may have avoided a fiscal catastrophe at home, Biden’s failure to assert American influence abroad has real consequences for our citizens and dollar holders worldwide.