Recently, significant events have occurred with the US dollar and the Chinese yuan.

Over the past two years, the US dollar's interest rate hikes and American sanctions have forced many countries to accelerate the process of de-dollarization.

Many people still don't quite understand why the United States would seemingly undermine its own position.

However, when viewed from a different perspective, it's actually the most rational choice for Americans.

Recently, the US dollar index, which Americans care deeply about, has dropped again.

Since the end of June, the index has essentially been falling, reaching a peak of 106.15 on June 26th, and now it has fallen below 105.

Many people are puzzled as to why the US dollar index is falling.

Even with the Japanese yen plummeting, it seems unable to save the US dollar.

In fact, given the current situation, it's normal for the US dollar to decline; it would be strange if it could hold its ground.

Why is that?

Let's look at two recent events to understand the logic behind it.

The first event: On July 10th, Bloomberg reported that after sanctions forced the Moscow Exchange to stop trading in US dollars and euros, the yuan's share in Russia's foreign exchange market has reached 99.6%.

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As recently as May, the yuan accounted for only 53.6% of Russia's foreign exchange transactions, but after the latest sanctions imposed by the US in mid-June forced Russia to stop trading in US dollars and euros, this process has accelerated.

However, even with the suspension of US dollar and euro transactions, aren't there still other international currencies like the British pound and the Japanese yen?

Why has the yuan approached 100% so quickly?

There are reports that this was actively requested by the Russian side.

Foreign media have reported that during Indian Prime Minister Modi's recent visit to Russia, the Russian side explicitly demanded that oil transactions be conducted in yuan.

Why does Russia want to receive yuan?

Because they can buy anything they want from China with yuan, and in the context of Western sanctions, many things are only available from China.

Therefore, Russia is currently in great need of yuan, and the slight decline in our exports to Russia recently was due to payment issues on the Russian side.

This situation reflects an important fundamental logic: if a currency is no longer backed by goods, it loses its value.

If a currency can be used to buy anything in the world, then everyone will use it.

After World War II, the US dollar circulated globally in this way.

You might ask, can the yuan replace the US dollar like this?

Of course, it's not that simple.

However, now there is a major country that can buy anything with the yuan, even without using the US dollar, which is unprecedented in recent decades.

The second event: Recently, according to Russian reports, Russian Deputy Finance Minister Ivan Chebeskov confirmed that Russia is working with the central banks of BRICS countries to study the launch of a "BRICS Bridge" local currency settlement platform.

The local currency here could be digital rubles, yuan, or reals.

The new system will allow direct transfers between countries, reducing the impact of Western sanctions on international payments.

Currently, there are already 10 BRICS countries, with dozens more applying to join, including Turkey.

The BRICS countries have a very strong population and resource base, accounting for more than half of the world's total, and their productivity has surpassed the G7.

They have oil, food, minerals, and large-scale industrial production capabilities.

The BRICS countries can circulate their economy internally, and if they have their own currency, it would be equivalent to dismantling the foundation of the US dollar.

What would happen to the US dollar if the BRICS countries completely abandon US dollar payments?

If the BRICS countries completely abandon US dollar payments, the proportion of the US dollar in global payments would at least be halved, dropping from the current 48% to below 30%, forming a multi-currency global structure.

From these two events, we can clearly see that the world's demand for the US dollar will continue to decrease.

In essence, currency is also a special kind of commodity and follows the law of supply and demand.

If the world's demand for the US dollar continues to decrease, then the US dollar will inevitably fall.

If a multi-currency structure is formed globally, instead of the US dollar dominating, the underlying logic of the world economy will change, and world trade will become more diverse.

The US dollar's interest rate hikes and monetary tightening policies will no longer have such a significant impact.

Of course, this is a long-term trend and may require a relatively lengthy process.

So, how do Americans face this situation?

The choices for Americans are actually limited; they can only strive to maintain the status of the US dollar.

The current two regional wars, interest rate hikes, various sanctions, and forming alliances are all aimed at this goal.

In the eyes of Americans, those actions are not self-destructive but are strengthening the position of the United States and the US dollar.

This is a very typical last struggle at the end of an empire.