Biden’s New Order Moves Us One Step Closer To The End Of The Dollar

In 2009, I facilitated and participated in the first-ever financial war game hosted by the Pentagon. This war game was conducted at the top-secret Warfare Analysis Laboratory of the United States (code name: WALRUS) located in the Applied Physics Laboratory about halfway between Washington DC and Baltimore.

I wrote about this in 2011 in Chapters 1 and 2 of my book Currency Wars. The scenario I presented at the time was that Russia and China would accumulate large gold reserves, pool their gold, and launch a new digital currency backed by gold in place of the U.S. dollar. Russia and China would then insist that any purchases of Russian energy or Chinese manufactured goods be paid for in the new currency.

It was a clear-cut effort to get out from under U.S. dollar hegemony and to protect themselves from U.S. dollar-based economic sanctions. Of course, that’s exactly what’s playing out today.

Now, the Biden administration has awakened to this threat, but it may be too late.

As reported in this article, Biden has ordered the U.S. Treasury Department and Commerce Department to study the possibility of a U.S. crypto-dollar, a type of central bank digital currency (CBDC) and to consider possible regulation of non-government cryptocurrencies such as Bitcoin, Ripple, and Ether.

The problem with Biden’s order is that a U.S. digital dollar is still a dollar. It may exist in digital form and be held in a direct account with the Fed accessed through your iPhone, but’s it’s still a dollar.

It took the U.S. dollar thirty years (1914 – 1944) to achieve its status as the leading global reserve currency. The dollar lost its gold link in 1971 but remained as the leading reserve currency due in part to the petrodollar deal that was worked out by Nixon and Kissinger in 1974. The world was flooded with dollars through a combination of Fed money printing and U.S. trade deficits.

The difficulties began in the 1990s and early 2000s when the U.S. used financial sanctions to punish enemies such as Iran, North Korea, Venezuela, and to a limited extent, Russia. The U.S. kept going back to sanctions over and over.

Now, in response to the War in Ukraine, the U.S. has imposed the steepest financial sanctions ever, including freezing the reserves of the Central Bank of Russia. That was the last straw for Russia and the world.

If dollar reserves are no longer a safe haven, then who needs dollar reserves?

The Biden administration is so ignorant of how the financial world actually works that they continue pushing sanctions while going through the motions of planning for a future digital dollar. The problem is that they are destroying the value of the dollar by abusing sanctions.

In the future, the dollar will not be that important whether it’s paper, digital, or crypto. Investors can prepare for the coming collapse of the dollar by increasing their allocations to physical gold. That’s the one form of money you cannot freeze or seize.

Corporate leaders and institutional fiduciaries looking to incorporate state of the art predictive analytics to their risk mitigation and strategic analysis should click the link to learn more about Raven Predictive Analytics®.