Is there anything that could disrupt the current monetary system?

 Having followed this question now for a decade I came to the conclusion that so long as the US dollar remains the primary global reserve currency we are unlikely to see any major changes to or current monetary system. The catalysts for major change would have to come from some kind of major political realignment in the US that no longer priortized US dollar hegemony. The last two major elections in the US seem to leave the nation politically gridlocked with no impetus for major change emerging as we reported earlier this year. 

So, at this point, the only question to ask is if there is anything that could disrupt the current monetary system? Of course, if the present system were to implode under some kind of major financial crisis, we would see an immediate power struggle to control whatever new monetary system emerged. That's unpredictable both in terms of timing or in terms of who would control such a new system. 

There is one obvious other scenario out there that could eventually disrupt the current system if there is no major crisis leading to collapse of the present system. It is clear that the world has divided into two major competing factions. The US/West led by the western central banks and institutions such as the IMF and the East led by the BRICS nations. The proxy war in the Ukraine has caused monetary system control issues that mostly are behind the scenes to emerge more into the public arena. The Russian invasion into the Ukraine led to the US/West weaponization of the US dollar and the global SWIIFT payments system in retaliation to the Russian move into the Ukraine. 

While the military confrontation gets most of the news media and public attention, anyone who has followed these monetary system issues for awhile understands that the real war is for control of who will decide what money is and who will control it's supply and distribution for commerce. That is where the real power lies and why nations (both West and East) are willing to use military power to gain the advantage.

We have reported here that the BRICS nations led by Russia and China have long talked about ways to bypass the US dollar and undermine the monetary power structure controlled by the western central banks and the IMF. For many years this discussion has continued, but without much actual change to the present US dollar dominated system. If that system is ever to be undermined, it will most likely happen as a result of the direct efforts of these eastern nations to make it happen. 

With that background, here is a link to an interview in April 2022 with Russian economist Sergey Glazyev. In this interview, Glazyev lays out the most detailed plan I have seen on how the BRICS nations can eventually bypass and undermine the US dollar. 

Russia's Glazyev introduces the new global financial system

If you want to read a detailed description of how the BRICS hope to disrupt the US dollar hegemony, this article is worth your time to read. I cannot predict whether this plan will be successful or not, but a key component of it is to get the world to move away from trading oil in US dollars (the so called petrodollar system that has run the world since the 1970's). Just yesterday Reuters reports that China is pushing hard to get Saudia Arabia to switch to using Yuan for oil sales. This excerpt from the article is worth noting:

"At the start of Friday's talks, Prince Mohammed heralded a "historic new phase of relations with China", a sharp contrast with the awkward U.S.-Saudi meetings five months ago when President Joe Biden attended a smaller Arab summit in Riyadh."

The article makes it clear that this meeting between China and Saudi Arabia is part of the ongoing effort to undermine the US dollar:

"President Xi Jinping told Gulf Arab leaders on Friday that China would work to buy oil and gas in yuan, a move that would support Beijing's goal to establish its currency internationally and weaken the U.S. dollar's grip on world trade."

As events unfold, what we should monitor is to see if Saudi Arabia moves away from the US dollar for oil sales (added note 1-17-2023). First to perhaps the Yuan and then later to the new proposed alternative reserve currency proposed by Russian economist Glazyez. If anything is going to disrupt the current US dollar based monetary system, it would likely be something along those lines. 

Added note 12-22-2022: Alisdair Macleod offers his thoughts on the potential for a major change in the current monetary system in this article. It delves into the "end of the petrodollar" speculation. This is a view that has been around for quite some time, yet the US dollar based system has persisted. We have stated here for quite some time we think it will take a major crisis in the current system to change things. We still hold that view here. We don't try to predict the timing of any such event.

Added note 1-9-2023: It was brought to my attention that Russian Official Medvedev recently posted his predictions for what could happen in 2023 on his Twitter account (see them here). While many of these seem far fetched, #10 on his list (pasted in below) did get may attention and does relate to what this blog monitors. I passed his prediction #10 on to one expert and he replied that it was possible that one could unfold some time in the future. Certainly the proposal outlined by Russian economist Glazyev above fits in with this prediction. Here it is:

"10. The Bretton Woods system of monetary management will collapse, leading to the IMF and World Bank crash. Euro and Dollar will stop circulating as the global reserve currencies. Digital fiat currencies will be actively used instead."

Added note 2-24-2023: This new article by Alisdair Macleod is worth reading. It updates the potential for the BRICS nations (led by Russia) to move forward with a new monetary system that could disrupt the present dollar based monetary system. It also covers recent news related to CBDC's suggesting we are not likely to see those disrupt anything any time soon or perhaps forever.

Added note 3-13-23: For those following the bank problems in the US, this new update from Jim Rickards is probably as good a take on things as you are going to find.