THE collapse of the British pound and its replacement by US Dollar was not by chance but by force considering that the USA and USSR were the major forces about seven decades back and as an aftermath of the waning influence of Britian in world affairs.

In 1971, the master stroke by the US to delink currency from gold and to designate oil trade in dollars led to dollars replacing gold as the most trusted currency and, with all trade being designated in dollar terms, it became the fiat currency with gold playing second fiddle in the world. Meanwhile, following century old practices, Indian households continued to hoard gold reserves quite unhindered by these global movements. This would now come good with the gold prices bound to increase as dollar loses steam.

All governments would now hold dollars as that financed their imports and dollar reserves were more important than gold reserves though the latter was still being held.

Now USA could print any amount of dollars and give to their citizens to consume and the rest of the world produced for USA as they needed the dollars to buy oil and other goods for their country. This led to unending dollar printing, giving more dollars to citizens than they deserve, increased consumption in USA, demand for dollar world wide. USA would send a portion of this to support the activities of Europe, which was dependent on US dollars for their survival with their economic fortunes being taken away by wars. China would manufacture by polluting their country and so did India, while USA and Europe would sermonise on human rights, LGBT and pollution and continue to consume. A brilliant economic model at work. Pollute others while you consume. This also led to services exports from India and our software engineers and NRI's would look down on India as they would be paid in dollar terms. India was, after all, a third world country and would get international awards only if their poverty and dirt were publicly displayed in films and music.

Fatal error or deep state design?

There is no doubt that the world has recently seen several wars in different regions which seem never ending. Now why is this happening? The Biden administration took a conscious decision when the Russian Ukraine war was ongoing to freeze Russian dollar assets. That would mean Russia could not use their dollar reserves leading other countries to think what would happen if they were to face the same situation. Sovereign nations would not be able to take decisions as the big brother would be breathing down their necks after freezing the dollar assets. They would have to find a way to settle their trade dues without the intervention of the dollar and that is why the UPI and Brics currency is being talked about. Russia and India settle their trade without intervention of dollars. This is called, in common parlance, de dollarization of the world trade system. This would mean that USA would lose its world power status and can best become a regional power in the near future leading to US resistance as the world moves away - a good pointer to endless regional wars.

This seems a fatal error to economists as fiat currencies cannot be subjected to restrictions of their usage. Some however would state that with the US economy in deep debt and aging population, it would be better to move businesses to countries which have a larger population which consumes goods and services. This agency which operates to move businesses in such manner driven by profit motive and with lesser adherence to sovereign boundaries is called the deep state. Now, the only country with a huge demographic dividend seems eastwardly and is called India that is Bharat. This country is more predictable than China and Russia for doing business and can generate profits as local consumption is high, often calculated at 60% of the GDP. Moving manufacturing here would be more profitable for exports and internal consumption.

Loss of faith in US dollar or is it Islam Christianity war - UAE moves away from OPEC

The Ukraine Russian war is a direct result of the NATO policy which frustrates Russian sovereignty and goes against the USSR and USA policy to not interfere with each other in their neighbourhood.

Come to Middle East. Ever since the 1970s, dollar denominated oil supply meant that the nations had huge oil revenues which could finance their activities. The dollar earned would go to pay for US security in the region as also foment trouble in our neighbourhood through the terror networking country Terroristan or Pakistan as it is popularly known.

Come 2020's with oil revenues dwindling and world slowly moving toward electric cars to hit at these sheikhs shaking the world, financing of terror networks is becoming very hard. Further, the need to designate only in dollar terms does not do justice to the rising power of China and other emerging countries. The need for the gulf countries to invest their surplus in productive assets is now more felt. Come India and China who are suddenly more interesting than USA and Europe.

With USA having several bases in Middle East, Christianity acts as a check to Islam. But with US and its dollar losing its relevance, you have seen UAE now moving away from OPEC which would only mean that China and India would now get to deal in oil for rupees/yuan or even barter without the need for dollars. The next in line will be Quatar and Saudi as the Middle East Nations move away from dollars. What it means is that while Islam remains, financing of fundamentalism reduces and Christianity will now have to find a new way to stay relevant there. That is where Israel comes. There will, therefore, be balancing of religious powers in Middle East with Islam and Christianity sharing the spoils and Hinduism trying to make a quiet entry in some regions.

Moving away from dollars means Christianity loses hold and now you will know why Israel wants to occupy more territories by dismantling Islam fundamentalism which is headquartered in Iran. Dismantling Islam fundamentalism in Middle East means no more financing of Pakistan and other terror groups - see the recall of loan by UAE as the first salvo in this direction. This would lead to balancing of religious forces in the Middle East through wars and subsequent peace.

For USA and Israel, it has become imperative that you have to remove Islam fundamentalism, you will have to control oil revenues for some more years and slowly move in the missionaries into the region. Further, with the impending European disaster due to Islamic fundamentalism, there would be a need to finance activities against such groups. Now you see why loss of importance to the dollar and the weakening of revenues in Middle East leads to religious wars. One should note that the spread of Christianity preceded Islam and was stated to be more barbaric than the later when they went about conversion. These two man made religions have been at each others throats to the world's detriment - one in pyjamas and the other is suit being the only difference. The time has clearly come to call out both these religions as being fundamentalist.

What is in store?

Dollars collapse as a single currency will be painful leading to wars across regions as others would try to dominate the world space and would be resisted to the extent possible by an arrogant and hedonistic USA. The lack of funds for Islamic groups would mean that they will have to lie low or re convert or fight back. Israel would like to expand and so would India as they would neutralise the neighbourhood on both sides and would like to be free from terror which has affected both countries.

The importance of settling trade where no currency has its hegemony would mean that the world will have to agree to several currencies which would form part of the basket. This would mean multi polar world with a basket consisting of dollars, yuan, rupee, rouble,etc. depending on whose production and consumption /GDP would be in a position to dictate. There is a rare convergence taking place quietly between USA, Russia,

China and India, not apparent to the outside world but clear to those who see a muted reaction to each other misdemeanours.

In the net, we will have

i. a multi polar world with a multi currency basket; USA would be a regional power with Europe and Middle East depending on India for their needs; Emergence of India as a major world super power alongwith USA, China and Russia seems a likely multi polar world.

ii. balancing of Christianity and Islam interests in the Middle East and Europe and entry of Hinduism in some regions;

iii. reduction of fundamentalism around India and Israel as these two powers expand their powers in the region;

iv. more manufacturing moving into India as services exports to USA come down significantly which means that parts of South India is in for a big hit; Back to manufacturing and new age services like data centers, etc. would mean India would balance out this hit but regions may suffer over some time. Real estate in these markets would take a beating for some time before recovery.

v. NRI's moving away from USA and Europe as dollars purchasing power comes down, salaries reduce and more foreign educational institutions move towards India and those countries push out the NRI's to preserve whatever jobs are left for their white citizens.

All this would happen over the next 10 years - does it feel like too much?