In this video, David Oualaalou argues that recent failures of three U.S. banks and Credit Suisse signal the imminent collapse of the Western financial system and the end of the dollar‑based reserve regime that began when the United States left the gold standard in 1971. He explains how the loss of dollar credit will shift the global monetary order toward a multipolar reserve system, with China’s renminbi emerging as a competitor and gold regaining prominence as a hedge. Oualaalou details the chronic U.S. current‑account deficits that have created a $18 trillion foreign‑asset liability, the stress on Deutsche Bank, and the broader geopolitical fallout as countries such as India, Bangladesh, Saudi Arabia, Kenya, and others move away from the dollar toward alternative currencies and payment networks. He warns that the economic pain will cascade from banks to ordinary citizens through a credit crunch, and urges viewers to recognize the strategic implications of a weakening dollar for both personal finance and global power dynamics.
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Hello everyone and welcome to Geopolitical Trends. My name is David Oualaalou, so good to be with you as always. Well, the US banking system is broken and soon enough we're gonna be asking the question: is the era of the dollar-based reserve coming to an end? In this video, I am going to provide you my insights about the economic and geopolitical implications, or ramifications that is, of this decline and how it will change the global order as we know it. But before I'll do all this, I'd like to thank the channel's members and the subscribers, you. And if this is your first time landing on this channel here, please make sure to subscribe and smash that notification button so you will be notified every time I upload a new video. And thank you all for your continued support. So let's dive in into this because it's a very, very important for you to understand the financial aspects of it. So beside the failure of the 3— yes, 3 US banks, which by the way we don't hear much about it. It was some news like, well, 3 banks collapsed, but they don't tell— they don't say the details so people, an average Joe, average Jane, can understand. So beside the failure of these 3 banks, another high pro— another high profile Failure happened across the pond, overseas that is, and this has to do with Credit Suisse, you know. Now with the failure of that also, it's sending a strong signal. The, the collapse of the 3 banks in the US and the Credit Suisse, it's sending now strong signals about the upcoming failure. Yeah, I will use the term the upcoming failure of the financial system within the West, you know. The question that you need to ask, you know, like I always say, look at the big picture. The question is that, will the central banks now, will keep these failing institutions on life support? In another term, will they sort of bail them out? That's question we all need to ask. So But here is the hard fact, and the hard fact and hard truth, that is, is that the era of the US dollar-based reserves and floating exchange rate that began on August 15, 1971— and as a matter of fact, it goes even further to the back in the '30s, but let's just stick with the 1971. Why is that? Because that's when we moved we took the dollar off the gold standard. So that's when the US severed the link. Yeah, it severed the link between the dollar and gold. And that era is coming to an end. So the pain, the economic pain that is, will be transferred now, not only from the, for example, the banks, and the real economy, which by the way, it will be starved for credit, but it will also be transferred to average Joe, average Jane, a regular people, you and I. That's where the great danger of all this, you know, and let alone the geopolitical consequences that will be enormous You know, Western media is not addressing this. Government's not addressing this. It's like what I just shared with you on the video about India and Bangladesh ditching the dollar. You know, more and more countries are moving into that direction. Writing on the wall. And to those who are in denial, needs to reconsider their position and see the reality for what it is. So the stop The stop of the dollar credit will accelerate to shift to a multipolar reserve system. In other words, it will be a different approach to the financial system. Not every country on the earth, on the world, will be counting on the US dollar anymore, which is exactly what we are witnessing with country after country dumping the dollar one after another one. So, and with the— now with this multipolar, uh, reserve or financial system that will give the advantage to China's renminbi as the competitor to the US dollar. Now, that does not mean China wants to have its currency as replacing the dollar. No, but it will be a competitor, at least for me. And I speak, uh, based on what I know so far. I didn't see signs that China wants to have that. Because there are a lot of issues that comes with when you become like the US dollar, global reserve currency. So, and here is the big elephant in a room. It's gold, believe it or not. And gold, by the way, which is— was disliked by none other than John Maynard Keynes. Now, for those who do not know who Keynes is, he is an English economist and philosopher. You know, whose ideas fundamentally changed the theory and the practice of macroeconomics and the economic policies of governments. So his, you know, he has some, uh, he had some, uh, understanding on theories about macroeconomics and so forth. About gold anyway, as I said, the big elephants in the room, gold will play, believe it or not, will play a big role because the dollar banking system is dysfunctional and no other currency, surely not the tightly controlled renminbi, can replace it. That's why I said I do not see China pushing its currency to become or to play the same role as the dollar. China doesn't want that. So for now That could change within next decade, possibly, possibly not. But now near record price, the gold that is, it's near a record price of $2,000 an ounce, and it's most likely to rise further. I've seen some analysis in the Financial Times just to read for my own understanding. I've seen some going up to $5,000. I've even seen some reaching $10,000. I don't know, I'm not a financial advisor. So just to put this on the record for you guys, but I can see the prices of gold going up. So, and that's what I read when I read that. I was like, hmm, that could be the possibility. This is no different than what was said back then about Bitcoin, okay? When it reached $56,000, you know, everybody was like, wow, it will never do that. And it did. So gold could be happen as well. So, so here is my brief analysis for you, because I like to keep this stuff short, uh, videos short and concise. The greatest, the greatest danger to dollar hegemony and the strategic power that it conveys to Washington is not China's ambitions to expand the international role of its currency, renminbi. That is not where the danger is. The danger comes from the exhaustion— yeah, get this, guys— the exhaustion of the financial mechanisms that made it possible for the US dollar to run up a negative— and get this, guys— $18 trillion in foreign asset possession during the past 30 years. In other words, we generated $18 trillion in deficits from foreign assets. That's, that, that's the— in the simple language. And because of this change, you know, now is impossible task. It will be impossible tasks of funding or financing America's ever-expanding from debt. Yeah, this is what I'm— my big concern about, especially for my fellow Americans here that have no clue what lies ahead financially. And I keep warning, and I keep warning, you know, some of us— not all, I shall not generalize— are just oblivious. Sad. They worry about what's on the idiot box on TV. They watch about this football, basketball, baseball, and all that, and they have no clue what's, what's going on. It's sad. It's gonna hit them like a brick on the head. So now there is another thing that I need you to be aware of, which again you don't hear much about, and it has to do with Germany. Now Germany's flagship institution, Deutsche Bank— the Deutsche Bank It hit an all-time low of €8 on the morning of March 24th, which was only 3 days ago, before recovering to €8.69 at the end of the day trading, you know. And its credit— here is where the other concern— its credit, uh, sort of, uh, default swap premiums, which is the cost of insurance on its subordinated debt, spiked to about 380 basis points above LIBOR, or almost 3.8%. And for you guys who do not know what LIBOR is, LIBOR is the average interbank interest rate at which, for example, a selection, okay, a selection of banks, uh, on, on, on the London money markets are prepared to lend to one another. That's what LIBOR is all, is all about. So by the way, guys, if you like this video so far, please hit the like buttons, help me out with the algorithm, that is, and subscribe, thank if you have not done so, and I truly appreciate your support. So, but what happened with this Deutsche Bank when the value of your rich only aid— you know, this is the equivalency. All what I shared with you is the equivalency as much as it was during the 2008 global financial crisis. You all remember GFC, global financial crisis, you know. So as much as it was, as said, during the 2008, the banking crisis, and the 2015, the European financial crisis, although that was not quite as much as during March 2020. What did we have in March 2020? The lockdown, COVID lockdown, the nonsense stuff. So when the premiums exceeded, get this guys, 5%. So the way I see it is most likely that the, the Deutsche Bank will not fail, but it's gonna need some official support. And when I say official support, I'm referring to the government bailout, which means the German citizens will have to pay for it. It's like for us here in the US. And to me, if it were up to me, I will let them fail. Because if they create the problem, they have to pay the consequences for it. So America's chronic— yes, I will use the term chronic— current account deficits of the past 30 years, which amounts to an exchange of goods for paper. It's simple. Do you know why? It's because we don't buy, uh, we don't sell anything. We buy more goods than we sell, you know, and selling assets, that's the only thing we have, selling assets like stocks, bonds, real estate, and so on to foreigners because we have to sell that to make up the difference. That's why we borrow from China to make up the difference. And you wonder why Americans do not understand this reality that we are spending more than we are earning. So, so America now, the United States, owes a net $18 trillion to foreign— to foreigners. Yeah, roughly equal to the cumulative sum of those deficits over 30 years. And the trouble is that the foreigners— this is what I see also the trouble for foreigners— the foreigners who own US assets receive cash flows in dollar, in US dollar currency, but needs to spend money in their own currency. So you can just see the changes in the financial, global financial system, and how will it impact geopolitics, but also it will impact you. This is why I always give you guys warnings. Be aware of your financial situation and keep an eye open. So, so here is my brief conclusion for you. So the fact is that the Western sanctions on Russia during the past year prompted China, Russia, India, uh, and the Persian Gulf states, or Turkey, you name it, Africa, to find alternative financing arrangements. That is what's at the heart of it. So And these are monetary phenomena that will eventually prove efficient and beneficial in the long term. As a result, working around the US dollar banking system, because everybody's gonna bypass the SWIFT, you know, as the dollar credit diminishes though, these alternatives arrangements will turn into permanent features of the monetary landscape on the global stage. And other currencies, of course, will continue to, to gain ground against the US dollar. Now you understand why, for example, India and Bangladesh went ahead and dumped the dollar. Now you understand why Saudi Arabia went ahead and dumped the dollar and switched to yuan. Now you understand why Iraq and, and countries in Africa— as a matter of fact, I just found out Kenya and Saudi Arabia now is going to be trading using their own currencies in energy. So fascinating. And this is why I wanted to come on the air and share this with you. I hope you find it very informative. And as always, remember, geopolitics impacts your daily life in more ways than one. Till next time, guys. Bye-bye.
