What happens when Russia is forced to renege on its dollar denominated debt, as it eventually must? The shock waves will undermine the already fragile European banks.
What will China do? They were stunned by how quickly the US wiped out Iraq in the Gulf War 1, and are feverishly modernizing their military. This will cause them to reevaluate their economic position. They will realize - they probably do already - that they are too tied to the US and too vulnerable to this sort of economic warfare.
I think we are seeing the beginning of the end of the Dollar as the international currency.
“I think we are seeing the beginning of the end of the Dollar as the international currency.”
And it’s going to be replaced with ... what” The Euro? The yuan? Both Russia and China are too dependent on exports (Russia on oil and China on cheap manufactured goods) to maintain a stable currency for global transactions. And the Euro zone is likely to contract in the next decade, not expand.
You’re probably right that many people won’t understand the market forces at work, that Putin brought on the economic sanctions, and that Putin and his cronies have mismanaged their economy. There is a huge blame America first crowd out there. Demagogues can tell them anything and blame the Jews or the Americans. Recently, we’ve had a lot of these types posting on FreeRepublic, too.