The fact that not only Turkey, but also the world is under the systemic threat of the dollar is beyond dispute. In fact, the dollar, which is issued by the U.S. as a basic reserve currency, is a virus that spreads the U.S.'s crises around the whole world and bears the basic vulnerabilities of the current global monetary system.
Today, the Bretton Woods agreement, which constitutes the basis of the current monetary system and the dynamics of the current crisis, is the monetary system that emerged after World War II. However, it was not an agreement, but an imposition inflicted by the U.S. During the Breton Woods Conference, American economist Harry Dexter White's plan, which represented the U.S.'s perspective, was accepted versus that of his British counterpart John Maynard Keynes in order to reconstruct the monetary system.
The White Plan put forward a fixed exchange rate system based on the dollar, which ensured the convertibility of the dollar to gold and would be run by the International Monetary Fund (IMF) and the World Bank. This, beyond any doubt, meant the U.S.'s economic hegemony in action.
As for the Keynes Plan, it suggested establishing a union that would act as a kind of global central bank. Commercial transactions in this system would be based on a new global currency called the bancor that would also be dependent on gold. In 1944, however, we faced a completely different monetary system, which is one of the mainsprings of the current crisis. President Recep Tayyip Erdoğan's proposal of a new gold-based monetary system reminded me of the monetary system that Keynes put forward against the White Plan.
Certainly, we are now in very different conditions from 1944. Today, developing countries are carrying out a significant portion of the global production and the world's production center has shifted to the East from the West. Furthermore, the East is also creating the human-centered productivity of the new economic outlook. Human capital and relevant research and development (R&D) centers are also shifting to the East from the West. In this case, the dollar-based monetary system, which is a crisis bearer, is now an unacceptable fundamental problem for the world.
Here, emerging economies based on open market economies that implement a floating exchange rate regime can have equal rights to developed countries in an institution that can replace the World Bank or reestablish the IMF. Thus, we can come closer to the contemporary version of the bancor system proposed by Keynes in 1944. The bancor, which is Keynes's global central bank and global reserve currency, would refer to the value of all currencies and gold. In other words, their value would be determined based on the bancor. The global central bank would receive gold in return for the bancor and provide bancor or gold-denominated loans to countries having deficits. The trade quotas of countries would also be determined depending on their average foreign trade. However, this plan was not rejected in 1944, however, the U.S. dollar was adopted as the only means of exchange - basic reserve currency - against gold. The IMF and the World Bank, which were established under the Bretton-Woods agreement, charged developing countries in dollar terms. In other words, to speak in formal rhetoric, they resolved the problems that arose in the balance of payments.
What are they doing?
Today, there is a foreign exchange market of around $5.5 trillion globally. This market is largely under the control of London and New York-based finance capital and is vulnerable to global speculation. Today, the U.S. is consolidating its financial system through the dollar. In this way;
It attracts trillions of dollars from outside the U.S. for short-term financing and restructuring.
It evaluates the dollar positions of London-based hedge funds and makes up for the falling profits in traditional sectors.
It brings down countries like Turkey, which are rapidly keeping up with the developed world (West) and are trying to seize the technology rent in order to have a new development path, and threatens them with a new foreign exchange-debt crisis.
It tries to prevent developing countries from using local currencies by signing free trade agreements among themselves. So, it is nourishing a new dollarization process through high dollar demand and the devaluation of local currencies. All this means that the crisis is exported to the East from the West again.
What to do?
What must Turkey do in this situation? It must understand this global trap. In this context, Erdoğan's proposal of a new gold-based monetary system and trade with local currencies is of historical importance. We cannot make do with opening a new trade regime and a relevant new monetary system up for discussion. We must also create a practical alternative to the collapsed dollar-based Bretton-Woods system, which is a crisis element at the moment. For example, new unions, as well as monetary and fiscal regulations, such as contemporary clearing systems and new in-house customs regulations, can highlight a transition process based on gold and national currencies. Certainly, these steps will eventually rule out the monetary and trading systems and economic policies of the previous century and bring forth new alternatives to formations like the EU, which cannot renew themselves and moves away from being a union.