One Of The Fastest Ways To Destroy The U.S. Dollar

We’ve written extensively about the rise of a BRICS currency union and the BRICS move toward a new currency. This new currency would be gold-linked and would displace the dollar in time as a major player in world trade.

The BRICS is a core group consisting of Brazil, Russia, India, China, and South Africa that has recently added six new members (including Saudi Arabia) and is on track to expand to as many as 25 members in the next few years.

One issue that has not received nearly as much examination is the question, why now?

Talk of displacing the U.S. dollar (sometimes called the Great Reset) has been around for decades and has never amounted to much. Why is the talk suddenly turning to action that is likely to have a material impact? The reason is that the U.S. has hurt the position of the dollar by weaponizing it in political disputes that have nothing to do with international finance.

The U.S. has put sanctions on Russia as a result of the War in Ukraine. The U.S. has extended those sanctions to China because it is helping Russia in the war. The U.S. also has economic sanctions on Venezuela, Iran, North Korea, Cuba, Syria and other nations.

At what point do other nations decide that using the dollar is just not worth it if they expose themselves to U.S. sanctions as a result? It appears we have now reached that point.

The most extreme sanctions imposed by the U.S. so far consist of freezing about $250 billion of the dollar reserves of the Central Bank of Russia. Frozen accounts are not actually converted to U.S. ownership. It just means the funds are unavailable to the lawful owner until pending disputes are resolved.

Now a member of Congress proposes going even further as described here. Congressman Rich McCormick (R. GA) has introduced legislation that would convert the frozen Russian assets to U.S. control to be used to reimburse the money spent by the U.S. to help Ukraine.

This is not just a freezing of assets, it’s outright theft. Russia has weathered the sanctions just fine; it’s economy will grow about 2.3% this year.

Stealing the Russian money won’t hurt Russia. It will hurt the dollar as trading nations work even harder to get out from under dollar hegemony, so their assets are not stolen as well.

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®.