By Rodolfo Pablo Treber *
The collapse of Silvergate Capital (cryptocurrency bank) and Silicon Valley Bank, both North American banks, is just one more symptom of the loss of predominance of the United States Dollar in the global concert.
It happens that the main reason for the bankruptcies was the volatility (price fluctuations), until now unusual, in the financial assets that made up the portfolio of both entities. The drop in the price of long-term dollar-denominated assets caused bankruptcy in bank accounts and left many more at high risk.
This, in addition to the high inflation rate of the United States economy, and the high interest rates set by the Federal Reserve (FED), are clear signs that the dollar is constantly losing weight over the years, despite sporadic and temporary upturns caused by some of his government’s monetary measures.
Without going any further, at the moment, the dollar index (which marks the comparison of the performance of the US currency against six other currencies in the world) shows its worst position since the crash of 2008. At the same time, and despite the context of war in Europe (which undoubtedly serves the US to slow down its fall), other currencies such as the Yen, the Swiss Franc, the Euro and the Yuan, in addition to the metals gold, silver and platinum, have strengthened their valuation relative to the dollar.
This context shows that multipolarity is advancing gradually, but at a steady pace, also in the hostile terrain of finance. Undoubtedly, this entails risks, losses and opportunities for each of the countries of our entire America.
In the first place, we clearly see how the bonds, shares, in short, the assets of those countries that have their economies aligned, dependent on the US dollar, collapse. The immediate consequence of this is that savers, or large speculative groups, transfer a part of their funds to the acquisition of more stable metals or currencies, generating greater devaluation pressure. At the same time, the context of uncertainty in the US may result in a general increase in prices in dollars (inflation) which would also negatively affect countries whose economies are dependent on and aligned to this currency. As an example of this, Argentina, totally dependent on the dollar, immediately saw its assets fall by an average of 7% and the valuation of parallel dollars increase, which means more devaluation pressure, which also translates into greater pressure on domestic prices of the economy.
In general terms, all those countries of Our America that maintain a high degree of dependence on the dollar (reserves, debts, foreign trade in that currency) will suffer these consequences to a greater or lesser extent.
On the other hand, if we take this small part of the imperialist crisis, which will last several more years until its unfailing decline, as what it is, an unparalleled opportunity to recover sovereignty and redirect the destinies of our Homelands, we can point out the urgency of undertaking a plan for the total de-dollarization of our economies.
What is convenient for the countries of Our America is to follow the path of associated and endogenous development; trade with other latitudes through local currencies or a common one (such as the Moneda Sur project); cut ties with multilateral credit organizations (IMF, World Bank) that function as true gendarmes of global finance in favor of the dollar; and strengthen their internal markets from industrialization to achieve independence that removes them from the primary economy model that generates atrocious extractivism and political dependence on embassies and foreign corporations.
Contrary to all of the above, in Argentina we see how the national government, Sergio Massa and the Frente de Todos, follow the plan of the International Monetary Fund to the letter, consolidating dependence on the US currency and begging for dollars in all parts of the world in exchange for giving up as much of our commons as possible. At the same time, the Vice President, Cristina Kirchner, promotes a renegotiation that enables the eternal permanence of the IMF in conducting the national monetary policy. Worse still, the strongest opposition, from Together for Change and Horacio Larreta, proposes deepening the current scheme of subordination and exploitation of exports.
In suicidal mode, or directly operating according to the designs of the United States in the region, the Argentine political leadership walks against the interests of its People and pushes for the permanence of imperialism in a context of opportunity for the struggle for liberation of the people.
* Rodolfo Pablo Treber is an economic analyst who works for the Central Bank of Argentina.