It looks like China has beat the U.S. to the punch once again, devaluing its currency to just above its customary 7:1 ratio. The move is key in the equilibrium of the money ratios that determine the costs of goods and services. It is key to view the developments with the understanding that U.S. talks of devaluing the dollar surfaced in late July 2019. The proposed move was sought to control the US trade deficit by lowering the value of the dollar and thereby closing the trade gap. These digital moves instituted by “central banks and government monetary policy” is a clear indicator of one very important concept: digital money is ALREADY HERE and it is used strategically to position goods and services in the world market. And it has been for quite a while.
A prime example of digital money is the EFT (electronic funds transfers) as well as the stock market and currency exchange. It is therefore key to understand the strategy behind the quest to devalue the dollar. As long as the dollar is strong, it may position itself against other currencies to maintain its dominance in markets in Africa, Latin America and other regions. But it must also be weak enough to close the trade gap with China. Economists in the west are using every means to salvage the world monetary system it has created–even if that means devaluing the dollar.
Signs that China and others have begun to divest from the Western world monetary system has sent a panic through concerned quarters. This week when China devalued its own currency, it set off a chain of sell-offs on the stock market. You see the real value, which is land, resources, agriculture, human capital, military prowess and social capital is often traded for fake money in the current model. As nations begin to move away from the dollar, it becomes increasingly clear the dollar is not just a symbol for U.S. market dominance, but a symbol of how the West has influenced banking around the world.
Daily new ways of finance and capital are popping up–from bitcoin to investor clubs, the world’s people and businesses (which have long been hampered by the current monetary system) are seeking ways to move away from the current banking model. The keepers of the current model have long understood the inflexibility in the system, where it severely hampers development and progress in developing nations around the world. China’s credit worthiness was downgraded in 2017, by Standard and Poor (S&P), because it was lending rapidly to developing economies around the world. Most of the development of the non-western world is due in large part to China making capital available where central banks controlled by Western monetary policy would not.
Once again, the scramble to that system has intensified as the new world order begins to churn at the agitations of limited fiscal policies that strangulate new business, entrepreneurship and international partnerships. Inevitably, new powers and different markets will emerge. Those in business, education and key sectors will need to be savvy in their endeavors and carefully watch (as well as understand) the mechanization of what may likely be the beginning of a new monetary system. Remaining agile and ready to pivot will be key in every business strategy. Will you be ready?