Since 2009, the United States has unleashed two giant loads of fiat currency on the world in what officials euphemistically termed “quantitative easing,” because it eases monetary conditions. But nations of the world are less concerned with QE’s name than with its consequences, and the fact that it is only the most recent of Washington’s poisonous fiscal policies. And many have taken decisive steps to escape being held hostage to the U.S. dollar.

Asia

The combined amount of reserves held by Asian central banks is $3.3 trillion, which equates to 46 percent of total global national reserves. During 2011, it was these Asian nations, with China at the helm, that lunged away from the dollar the most vigorously.

Since the end of 2010, China has trimmed its holding of U.S. dollars by $27.5 billion, and, though it remains the top buyer of U.S. treasury bonds, Beijing is taking further significant strides away from the greenback. At the end of December, officials from China and Japan, the world’s second- and third-largest economies, unveiled a plan to allow direct exchange of their currencies for bilateral trade, which would negate the need for Beijing and Tokyo to buy U.S. dollars.

Syracuse University political science Prof. Horace Campbell called the swap “one more nail in the coffin of the dollar as the international reserve currency.”

The Sino-Japanese currency trade agreement comes amid a flurry of Asian trade duos moving to bypass the dollar in their bilateral trade. Among them are Russia and China, Japan and India, and China and Thailand. But given the massive size of the trade volume between China and Japan, this deal is far more significant than the other agreements.

It is also significant that the deal came during a time when U.S. leaders were amplifying rhetoric about China’s military buildup and working toward the development of a Trans-Pacific Partnership (tpp). Washington wanted Japan to become a pillar of the tpp, so the timing of Tokyo’s decision casts a dark shadow over the U.S.’s plans.

In the first week of January this year, less than two weeks after the landmark Sino-Japanese deal, Chinese media reported that China, Japan and South Korea were also constructing the framework for a free trade pact between the three largest economies in East Asia.

Asian states feel the ongoing devaluation of the U.S. dollar and the uncertainty of the euro, and they are moving to protect their economies from it. The rash of currency swap agreements represents a clear breakaway from U.S. financial domination, and also increases pressures for the Chinese currency to be internationalized as other economies follow the lead of Japan and seek exchange deals to bypass the dollar.

And Asia is not alone in its dollar skepticism.

Latin America and Africa

The last global financial crisis didn’t strike Latin America as severely as other regions, but it was jostled, and has taken measures to protect itself from possible future calamity. Among those measures was the recent establishment of a Latin American regional bank, the Bank of the South. Several nations are also building the architecture for a regional South American currency called the sucre.

Last year, Colombia proposed a currency basket that would combine local currencies with euros, yen and dollars, and could steer regional trading in a direction that decouples economies from the U.S. dollar.

In September, Nigeria became the first African nation to adopt the Chinese yuan as one of its reserve currencies, when the country’s central bank governor Lamido Sanusi announced that Nigeria would invest 5 to 10 percent of its foreign exchange reserves in the Chinese currency.

“A number of countries are participating in the [renminbi] market in Asia and … Latin America, and we are pleased to be the first African country to take the step of joining this group of countries that recognize the importance of China to the world economy,” Sanusi said.

Et Tu, Qatar?

Middle Eastern nations hope to avoid being left as the only economies still clinging to deteriorating dollars, so they are following Asia’s lead in edging away from the greenback. Writing for the Asia Times last week, Ambassador M.K. Bhadrakumar, a career diplomat in the Indian Foreign Service, explained the trend:

Quite obviously, Persian Gulf countries are slowly, steadily probing their options in the Asia-Pacific to diversify their external relations that have been traditionally riveted to the West. With Europe in serious disarray and the U.S. in decline and its reputation in the Middle East significantly dented, this trend is likely to become pronounced.

The new inclination is for Middle Eastern countries to bypass the U.S. dollar as an intermediary in their oil sales to Asian states, and instead use their own currencies or those of their Asian customers. Among the trade duos that have already taken these steps in their bilateral trade are Russia and Iran, China and Iran, China and Qatar, China and the United Arab Emirates, and India and Iran.

Anti-U.S. maneuvers of this kind are to be expected from Iran, but the uae and Qatar have long been mainstays of Western strategy in the Middle East because they make up the bedrock of petrodollar cycles. Neither Qatar nor the uae is defiant toward the U.S. the way Iran is, but their concern is for the bottom line of economic stability. They are moving to protect against exchange rate volatility, and it may not be long before Saudi Arabia follows suit.

Leaders of the Gulf Cooperation Council—comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the uae—have also been bypassing the dollar to instead buy gold, and they are working toward the establishment of a monetary union with a common currency.

Only a Matter of Time

The nations of the world are waking up to the fact that the U.S. debt is over $15 trillion, and that leaders in Washington have not been able to effectively stem its growth. Back in 2009, economist Nouriel Roubini explained the dollar’s decline, saying:

This decline of the dollar might take more than a decade, but it could happen even sooner if the U.S. did not get its financial house in order. If China and other countries were to diversify their reserve holdings away from the dollar—and they eventually will—the United States would suffer. It would take a long time for the renminbi to become a reserve currency, but it could happen. The resulting downfall of the dollar may be only a matter of time.

The decision of China and Japan to diversify their reserve holdings away from the dollar was a momentous stride toward the global shift Roubini predicted, yet it has been given little coverage by the Western media. And since the U.S. has not been able to get its financial house in order, the rush of nations to abandon the greenback will gain momentum rapidly in the months and years ahead. From its earliest editions, the Trumpet has warned that the age of the dollar is coming to an end—and has explained that the greenback’s collapse is a precursor to the biblically prophesied downfall of the United States.