Bloomberg's op-ed article on the 6th argues that Trump’s war against Iran is now backfiring on the United States, undermining the "petrodollar system" that underpins American hegemony.

Gulf oil-exporting nations have drastically reduced their oil exports, no longer reinvesting these petrodollars into U.S. assets. Meanwhile, central banks around the world have been selling U.S. Treasury bonds (U.S. government debt) to prevent their own currencies from depreciating.

This has caused U.S. bond yields to rise significantly—unlike in past crises when investors typically "flee to safety," driving yields down.

The gradual erosion of America’s status as a “safe haven” for finance signals the collapse of two critical pillars of the petrodollar system: the decline in oil exports priced in dollars (as Iran seeks to trade oil in RMB); and the reduction in petrodollars flowing into U.S. financial assets.

Some argue this exaggerates the demise of the petrodollar. The U.S. dollar will likely remain dominant in the global monetary system for a long time to come. People may not actually desire a replacement for the dollar—nor does Eastern Greatness (East Greatness) want one either. After all, the dollar is incredibly convenient; what people truly seek is merely a mechanism to circumvent sanctions.

The economic system of East Greatness stands in stark contrast to that of the United States. East Greatness is a trade surplus nation, while the U.S. runs a trade deficit. East Greatness benefits greatly from the dollar and has no intention of losing this advantage.

Perhaps in the near future, a new arrangement could emerge: shifting from exclusive dollar settlement to a "dollar + RMB" model.

Iran sells its oil in RMB and takes a 10% RMB commission from the transaction.

This means that 10% of the total oil trade value is effectively settled in RMB.

America has always relied on the dollar to resolve the crises it creates.

Now, however, the dollar can no longer escape this predicament—because the goods other countries need are no longer being sold in dollars!

Then let us observe the flow of capital: who in the world treats capital most favorably?

Additionally, France has officially withdrawn all of its gold reserves from the Federal Reserve Bank in New York. Between July of last year and January of this year, the French central bank sold its final 129 tons of gold stored at the New York Fed (about 5% of its total reserve). It purchased an equivalent amount of high-quality gold bars in Europe, generating a profit of €1.3 billion.

Now, all 2,437 tons of gold are stored in Paris.

The official explanation from France states that, based on internal audits, the reserve value has increased—not due to geopolitical considerations.

When a country retrieves its gold, the message is clear: it no longer trusts you to safeguard it.

France has clearly opposed the war against Iran, closing its airspace and banning U.S. military aircraft from passing through.

Now that the gold has returned home, the foundation of the post-war financial order—built upon American institutions as trusted custodians of allied wealth—is beginning to crumble.

Germany is closely watching France.

Germany holds 1,236 tons of gold at the Federal Reserve.

The president of the German Taxpayer Association said: “Trump’s actions are unpredictable—he will go to any lengths to maximize fiscal revenue. That’s why our gold stored in the Federal Reserve vaults is no longer safe.”

1,236 tons—representing 37% of Germany’s total gold reserves—are still located in New York.

Original source: toutiao.com/article/1861779359332360/

Disclaimer: This article reflects the personal views of the author.