Under normal circumstances inflation occurs, when too many monetary units (US dollars, Euros, Chinese Yuan) chase too few goods. But we are not living in normal times. To the contrary. We are living in an increasingly divided world, not only in political terms – West vs. East / Global North vs. Global South – but also in monetary terms.

The gradual but ever faster faltering of the US dollar hegemony, followed by related so-called hard currencies, like the Euro, the British Pound, the Japanese Yen, as well as the Australian and Canadian dollars, is giving eastern currencies, especially the Chinese Yuan and to some extent also the Russian Ruble a thrive towards stability.

Why is that? For a number of reasons. First, the Chinese Yuan and the Russian Ruble, as well as many other eastern currencies, are backed by their economies and in both cases also by gold. For that reason alone, they have an inherent stability, western fiat currencies – which are based on nothing – do not have.

A new and coming eastern currency stability mechanism may soon be a basket of some twenty commodities that are widely and universally used, in addition to the strength of the local economy.