Southeast Asia Is Ready To Join The Rest Of The World In Dumping Dollars

We’ve seen endless stories about how Russia, China, Iran and other major rivals of the U.S. are working to reduce dollar reserves and invent new forms of currency for international payments. In that context, this article comes as a bit of a surprise.

Bloomberg reports that at a recent meeting of Southeast Asian officials and experts hosted by a think tank in Singapore participants were just as fearful as the major countries that the U.S. has gone too far in weaponizing the dollar to apply pressure in geopolitical disputes.

George Yeo, the former foreign minister of Singapore, went so far as to say that “the US dollar is a hex on all of us.” He went on to say, “If you weaponize the international financial system, alternatives will grow to replace it.”

The former trade minister of Indonesia, Thomas Lembong, praised Southeast Asia central banks that have developed digital payments systems using local currencies. He also urged government officials to find new ways to avoid relying extensively on the U.S. dollar. “I have believed for a very long time that reserve currency diversification is absolutely critical,” said Lembong.

What’s amazing about this report is that the criticism of U.S. dollar policies is coming from reliable allies and countries that have traditionally favored dollars.

There was a huge build-up of U.S. dollar reserves throughout Southeast Asia in the aftermath of the global currency crisis of 1997-98. This policy of building precautionary reserves was designed to prevent another run on local banks and to provide a rainy day fund for essential imports such as food and oil. Now the asset seems more like a potential liability as the U.S. uses the dollar to threaten countries that don’t support Biden administration warmongering in Ukraine or other U.S. policies such as the Green New Scam.

If friendly countries in places like Southeast Asia join serious rivals such as Russia and China in reducing their reliance on the U.S. dollar, it can only mean a weaker dollar and possibly more inflation ahead. It will also mean much higher gold prices because gold is the only alternative to dollars or other currencies such as the euro that can be weaponized against them.

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