Brazil and China – between the dollar and the Pentagon

Image: Reynaldo Brigantty
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By BRUNO MACHADO*

The dollar's global sovereignty and the regulatory superpower of the US financial system may have their days numbered

The technological dominance of the US over the world's productive economy led to the existence of such economic power in this power that gave it the power to dictate its currency to the world as the international currency. Having the currency that its Central Bank prints as the currency of exchange in the world, the US also began to have its financial system as the owner of the rules of finance on the planet. However, with the Chinese technological advance, the economic power of the US is at risk and the global sovereignty of the dollar and the regulatory superpower of the US financial system may have their days numbered.

It is evident that such economic domination depends on a backing of military power. The US bases spread around the world and its superpowerful national army guarantee, whenever a country tries to leave the line imposed by imperialism, economic domination through force, without intermediaries. It turns out that, at the same time that it holds power over the currency that serves as an international reserve of value, the US makes it possible to finance its economy, and particularly the Pentagon, through the dollar reserves of all countries in the world that hold reserves. in such currency. In this way, the peripheral countries of capitalism are not only subordinated to the US economic and military power, but also finance them.

The rapid increase in China's military capacity, in the context of the defense of its territory, prevents, to some extent, the use of US military power to guarantee the sovereignty of the dollar in Chinese territory. In addition, an alliance between China and Russia puts at risk this imposition of the dollar and the rules of the US financial system in several countries around the world that come to ally themselves militarily with Russia and China. Without being able to use its military bases to guarantee its unequal economic power in the world, imperialism is forced to try to weaken its Russian and Chinese rivals through proxy wars and political destabilization operations against these two countries.

If not interrupted by a war, the overtaking of Chinese economic power over the US will inevitably end the dollar's hegemony globally, which will also weaken the US financial system and the Pentagon's own budget. Without this strong economic power, US military power will be underfunded and will likely regress to the size of an Army in any developed country. An economy heavily dependent on dollar privilege and incessant wars will not be able to maintain itself as a superpower for many decades to come.

A new global currency, possibly backed by a basket of currencies and prices of commodities, will also make it possible for peripheral countries to embark on economic development routes. Even if the emerging powers of Russia and China try to impede the technological development of peripheral countries, they will not have the same economic and military capacity that the USA has today to impose its will. This is because Russia does not have the number of military bases scattered around the world as the US does and China, without being able to print the global currency, will not have the economic and particularly financial power that the US currently has.

In this way, the process of replacing the USA with China and Russia as the greatest power in geopolitics can favor the peripheral countries of the world, such as Brazil. Especially during the period of dispute for hegemony between new and old imperialisms, which could serve as a diplomatic loophole for emerging countries to negotiate greater rights to make industrial policy and finance their technological development without suffering retaliation and even receiving technology transfer and productive investments from the poles in conflict.

*Bruno Machado is an engineer.


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