De-dollarization alert! U.S. doubling down on weaponization of the dollar

Enter Stage Right ^ | September 28, 2026 | Mike Maharrey

[Angelino97]

The U.S. government continues to ratchet up its use of the dollar as a foreign policy tool, even as the weaponization of the dollar has accelerated de-dollarization.

Last Monday, U.S. Treasury Secretary Scott Bessent announced plans to effectively ground Iran’s commercial airlines, saying that on Wednesday, Sept. 23, “All the Iranian airlines will be shut down around the world.”

In pursuit of this goal, Bessent warned that any company or country supporting Iranian airlines could face secondary sanctions and be “knocked out” of the dollar system.

“If they land, you cannot provide them with fuel, you cannot provide them with landing services, you cannot sell them tickets, or you will be knocked out of the dollar system.”

Sanctions targeting Iranian domestic airlines are part of broader measures to ratchet up pressure on the Iranian regime and isolate the country from the global financial system. The U.S. has reportedly threatened secondary sanctions on foreign companies that do business with Iran across a wide range of sectors, including energy, shipping, precious metals, crypto, and manufacturing.

Thanks to the dollar’s reserve currency status, the U.S. can back up these threats. Much of the global economy runs on dollars, and governments or companies that cross Washington risk having access to that system restricted or cut off. The U.S. government can exert this pressure by freezing assets under U.S. jurisdiction, limiting dealings with U.S. companies, and restricting foreign banks’ access to U.S. banking accounts.

Under a series of executive orders issued by President George W. Bush after 9/11 and more recently by President Trump, entities supporting sanctioned countries can also be designated as sanctions targets and added to the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals and Blocked Persons List.

Persons or entities on that list can have their property and funds within the U.S. frozen and be blocked from doing business with U.S. individuals or companies. More significantly, foreign banks that service sanctioned entities can face sanctions themselves, including losing access to the U.S. banking system.

The U.S. has another sanction tool in its belt. With Western cooperation, the U.S. can cut off sanctioned entities from SWIFT.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) system serves as the global economy’s superhighway. In effect, it operates as a global financial messaging service, facilitating cross-border payments. As the SWIFT website puts it, “SWIFT is the way the world moves value.”

Since the dollar serves as the world reserve currency, SWIFT effectively facilitates an international dollar system.

The threat of sanctions incentivizes foreign governments, companies, and banks to drop Iranian business rather than risk much wider financial disruption.

However, the dollar weaponization creates other perverse incentives. It motivates them to limit their exposure to the dollar system. After all, if somebody is threatening to pull a rug out from under you, the smart move is to get the rug out of the room.

Enter de-dollarization.

Many countries have seen the writing on the wall. Not wanting to be under the U.S. government’s thumb, they’ve started taking steps to limit their exposure to the dollar and dollar assets. After all, the U.S. can’t sanction your dollar activities if you don’t have any.

We see this evidence in central bank gold buying.

Central bank gold buying ramped up after Russia invaded Ukraine.

The U.S. and its allies immediately imposed economic sanctions on Russia, and they escalated quickly. Officials initially indicated Russia would not be locked out of SWIFT. A few days later, the United States, the European Union, the UK, and Canada issued a joint statement announcing SWIFT would disconnect “selected” Russian banks from the global payment system.

In the ensuing months, the U.S. and its allies continued to tighten this economic noose.

Meanwhile, gold overtook U.S. Treasuries as the top global reserve asset.

We also see the implications of de-dollarization in the shaky bond market. Demand for U.S. Treasuries has tanked in recent months. Long-term bond yields have risen to levels not seen since 2007. The U.S. has been forced to intervene in the bond market to push rates down. (It hasn’t worked.)

One could certainly argue that sanctions are a necessary foreign policy tool. However, as with any policy, it’s important to count the cost and anticipate potential blowback.

De-dollarization potentially creates economic problems for the U.S. that are every bit as bad as the consequences facing sanctioned countries.

Simply put, the United States depends on the global demand to underpin its bloated government. De-dollarization threatens an inflation tsunami as those unwanted dollars make their way back to the U.S.

The dollar’s role as the world's reserve currency is the only reason the U.S. can borrow, spend, and run massive budget deficits to the extent it does. It creates a built-in global demand for dollars and dollar-denominated assets. This absorbs the Federal Reserve’s money creation and helps maintain dollar strength despite the Federal Reserve’s inflationary policies.

But what happens if that demand drops?

A de-dollarization of the world economy could cause a dollar glut. The U.S. currency could further depreciate. At the extreme, global de-dollarization could spark a currency crisis. You and I would feel the impact through higher price inflation, eating away at the dollar's purchasing power. In the worst-case scenario, it could lead to hyperinflation.

President Trump and his Treasury secretary are playing with fire. They’d best be careful lest they get burned.

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TOPICS: Business/Economy; News/Current Events
KEYWORDS:

[Mariner]

The US dollar is the only game in town.

Roughly 55% to 60% of worldwide financial assets and cross-border claims are denominated or priced in U.S. dollars.

[Jamestown1630]

Do yoou post anything that isn’t anti-Trump or his initiatives?

[Bob Wills is still the king]

“A de-dollarization of the world economy could cause a dollar glut. The U.S. currency could further depreciate. At the extreme, global de-dollarization could spark a currency crisis. You and I would feel the impact through higher price inflation, eating away at the dollar’s purchasing power. In the worst-case scenario, it could lead to hyperinflation.”
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If the world economy were to shift off of the US dollar, any “dollar glut” could quickly be addressed by removing the “excess” currency via fed reserve transactions.

[bigbob]

Yes, but this and other reasons are why this BRICS BS has to be nipped in the bud.

[Bob Wills is still the king]

Do yoou post anything that isn’t anti-Trump or his initiatives?
___________________________________________________________

The guy who wrote this is just another gold bug hustler.

“Mike Maharrey is a journalist and market analyst for Money Metals with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.”

[aMorePerfectUnion]

And this is great incentive for other countries to move toward china to hedge their bets.

[Worldtraveler once upon a time]

Writer for " Enter Stage Right" Mike Maharrey is "a journalist and market analyst for Money Metals with over a decade of experience in precious metals. "

So does the page say. The site is interesting, as the domain name was registered through a German firm, and the privacy work is done through a British company in Wakefield, UK. Additionally the site itself states: "This Website (excluding linked websites) is controlled by Enter Stage Right from the Province of Ontario, Canada."

As to Money Metals, it calls itself "an online bullion exchange." So they will sell you metals for CASH. They want dollars, all the while this guy is giving bad news about dollars. Odd?

[Midwesterner53]

Meanwhile while the navy blockades the western approaches to Iran, the Caspian Sea ports remain wide open. Mining those harbors would further isolate the country. Those and the rails are their last links to the outside world. Get it done.

[Nateman]

The National debt is over 40 Trillion dollars. No sign that deficit spending is ever going to stop. Eventually the World will figure out lending money to the US Government is a losing proposition. Games like the Treasury are playing now is trivial compared to that ultimate reality.

[Angelino97]

I discovered EnterStageRight on FR’s links page, so it seems recommended.

[Zhang Fei]

US debt is a big number because the US has a big economy. The debt to GDP ratio, at 1.25, is slightly higher than other big economies (France’s is 1.12), smaller than others (Japan’s is 2.0). Bit of a paradox is the US’s safe and high-performing stock market is diverting cash that might otherwise have gone into Treasury debt. $24T of foreign cash is in US equities vs just $8T in Treasuries.

[TTFX]

Some people are acting like promoting gold is a bad thing. Weird.

[Nateman]

...US debt is a big number...

The bigger they are, the harder they fall. Andrew Jackson. It was during his term of office that the United States had zero debt . America has been in debt ever since proving the problem is systemic. What Congressman can be reelected on the basis of how much spending he has cut?

Milton Friedman made the argument that only a Balanced Budget Amendment had any chance of holding back Fedzilla's monstrous spending spree . Only a Convention Of States has any chance of passing such an Amendment. After 250 years that option has never been used. A Balanced Budget Amendment would be a good start and it nearly happened until Congress came up with a clever ploy to kill it .

[catnipman]

the US dollar is doing just fine, thank you very much:

The performance of the U.S. Dollar Index (DXY) over the last two years (September 2024 to September 2026) reflects fluctuations against a basket of major global currencies.

The currency index tracks the dollar’s value relative to six foreign currencies: the Euro (57.6%), Japanese Yen (13.6%), British Pound (11.9%), Canadian Dollar (9.1%), Swedish Krona (4.2%), and Swiss Franc (3.6%). [1, 2]

## Key Performance Trends (2024–2026)

*
* Late 2024 Peak:

The dollar expanded strongly toward the end of 2024, reaching a peak strength of 1.09 in early January 2025. [2]

* 2025 Correction:

Throughout most of 2024 and 2025, the currency cooled down gradually. Factors like shifting interest rate expectations and global trade uncertainties influenced this correction. [2, 3, 4]

* 2026 Volatility & Stabilization:

The index hit a two-year low of 0.99 in January 2026. However, it stabilized through mid-2026, consolidating around the 1.01 mark by late September 2026 due to a resilient U.S. labor market and sticky inflation metrics keeping Fed policy expectations firm. [2, 5]
*

[1] [https://www.tradingview.com](https://www.tradingview.com/symbols/TVC-DXY/)
[2] [https://www.google.com](https://www.google.com/intl/en_us/googlefinance/disclaimer)
[3] [https://www.schwab.com](https://www.schwab.com/learn/story/will-us-dollar-be-dethroned)
[4] [https://www.barchart.com](https://www.barchart.com/futures/quotes/DXU24)
[5] [https://tradingeconomics.com](https://tradingeconomics.com/united-states/currency)

[unclebankster]

the US dollar is doing just fine, thank you very much:

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The demise of the dollar is vastly overstated by people that want it to be true.

“It Isn’t & Won’t” anytime soon.

[Jonty30]

The problem with this is that you can only do this once.