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What the US Expects in 2019 and Other World Events
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What the US Expects in 2019 and Other World Events

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WASHINGTON – January 9, 2019

Several high-profile international events are expected this year, such as the separation of the UK from the European Union and the US withdrawal from Syria. 2019 will also mark the 30th anniversary of the fall of the Berlin wall and the 70th anniversary of NATO.

So, the main questions for this year are:

Will the US leave Syria?

Since the day President Trump announced the withdrawal from Syria, there have been different schedules for the withdrawal presented: It was first claimed it would happen "within from 60 to 100 days", then "within 30 days". But after Trump’s statement made before the New Year, that the US military "will be slowly withdrawn" from Syria, the New York Times published that Trump gave four months for the troops to leave the country. If the US leaves Syria, the balances in the region will change, and this will be one of the most important topics of the year.

Pressure on Trump may increase

After the midterm elections in November, the Congress is now working with a new political structure. The Democratic Party secured a majority in the House of Representatives, and it’s said that Democrats can exert pressure on the White House by initiating more investigations into Trump-related allegations of corruption and lawlessness.

UK expected to complete its divorce from the EU

On March 29, 2019 at 11:00 pm, the UK will officially separate from the European Union if by then it hasn’t invoked the 50th article of the Lisbon Treaty, which recognizes the possibility of unilaterally withdrawing the notification of intention to withdraw from the EU, or it hasn’t gone to another referendum. The UK's separation from the EU is expected to have important implications for both the European community and Turkey's accession process.

The 70th anniversary of NATO

In April 2019, NATO plans to hold a meeting at the level of Foreign Ministers in Washington.

Economic changes

Another important event could be a revolt against the dollar, that could be sharper and start sooner than most economists predict. This issue is of concern to almost the whole world, from America to China.

Today the United States is waging an economic war against a tenth of the world's countries, with a total population of about two billion people and a total GDP of over $15 trillion. These countries include Iran, Venezuela, Cuba, the Sudan, Zimbabwe, Myanmar, the Democratic Republic of the Congo, North Korea, Russia, and others that Washington has imposed sanctions on in recent years, but also countries such as China, Pakistan and Turkey, which are not fully under sanctions but rather targets of other penalty economic measures.

In addition, thousands of people from a huge number of countries are included in the list of specially allocated citizens prepared by the U.S. Department of the Treasury, who therefore don't have the right to use the global financial system under the leadership of the United States. Many of the individuals on the list are either closely linked to or part of the leadership of their countries.

From the US’s point of view, each of the economic entities has been reasonably restricted, either because of human rights violations, terrorism, crimes, nuclear weapons trade, corruption, or, as in the case of China, unfair trade policies and intellectual property theft.

However, in the last few months, the impression that the unwavering commitment of America to fight against all the filth of the world made all these governments and their support of rich citizens into a critical mass, combining forces to create a parallel financial system, is not available for the long arm of the United States. If they succeed, it will radically change America's position in the world.

America's global supremacy was made possible not only by its military power and alliance system, but also by its control over the internal structure of global finance and, especially, by a large-scale adoption of the dollar as the world's reserve currency. The unique status of the US currency has held the global financial system since World War II.

Any transactions conducted in US dollars or carried out through a US bank automatically bring the parties to trade relations under the action of the US legislative system. When the United States decides to impose unilateral sanctions, as in the case of Iran, they are in essence telling the world's governments, corporations and individuals that they must choose between suspension of business under government sanctions or an exception from the number one economy in the world. It is a powerful tool of influence.

Few companies and banks can afford to abandon the US market or lose access to financial institutions.

Revisionist countries that want to challenge a system dominated by the US consider it a threat to their economic independence. Therefore, both Russia and China have developed their own versions of society for international interbank electronic financial transfers (SWIFT for short), a worldwide network that allows international financial transactions among thousands of banks. Both states also call on their trading partners to abandon the dollar in bilateral trade in favor of local currencies.

The main front where the dollar’s future will be decided is the global market of raw materials, in particular, the oil market worth $1.7 trillion. Since 1973, when President Nixon unilaterally recalled the US dollar from the gold standard and convinced Saudi Arabia and other OPEC countries to sell oil only in dollars, the global oil trade has been tied to the US currency. This paved the way for other raw materials to be sold in dollars. These agreements were very beneficial to America. They created an ever-growing demand for the US currency, which in turn allowed subsequent US governments to freely manage the growing deficit.

Now things have changed. Most members of the anti-dollar alliance are exporters of raw materials, and they believe that their products should not be valued by dollar-bound criteria such as WTO or Brent, or that they should not be sold in a currency they don't need.

For example, when China buys oil from Angola, gas from Russia, coal from Mongolia, or soybeans from Brazil, it prefers to operate in its own currency, thus avoiding market rates that are undesirable for both parties to the transaction. And this is already beginning to become a reality.

Russia and China have agreed to sell a certain share of energy resources in yuan. China is putting pressure on its major oil suppliers -- Saudi Arabia, Angola and Iran -- to accept the yuan as oil sold. Last year, China introduced gold-backed futures contracts, which were called "petroyuan" on the Shanghai international energy exchange. This was the first non-dollar criterion of raw materials in Asia.

The gradual adoption of digital currencies supported by blockchain technology offers revisionists another way to refuse the dollar when trading. The Russian Central Bank said it was considering launching a national cryptocurrency called "crypto-ruble," while helping Venezuela launch its own cryptocurrency called "Petro," supported by the country's massive oil reserves. Now BRICs members are discussing a cryptocurrency that would be supported by the whole association.

All these and other actions point in one direction: In the coming years, the dollar will face many attacks aimed at destroying its hegemony, and the energy market will be one of the main battlefields where the future of American economic superiority will be decided. Any successful attempts to decouple the trade in raw materials from the dollar will be affected by the domino effect not only in the economic system in the form in which it is known to the US but the strategy of America abroad.

With the positive overall state of the American economy and the unique strength of the dollar compared to the currencies of fighters with the dollar, including the Russian ruble, yuan, Turkish Lira and Iranian rial, you can get carried away with self-admiration and consider the actions of revisionists but minor troubles.

However, if America ignores the growing anti-dollar coalition, it will harm it. The price increase on the market will come to an end, the state debt of $21 trillion, increasing at a trillion dollars a year, the reaction will come more sharply and sooner than forecasts by economists.

In America's economic euphoria, it is worth remembering that one in four people on the planet today lives in a country whose government has committed itself to end the hegemony of the dollar. Confronting their actions should be a national priority for Washington.

Author: USA Really