Posted on 04/16/2024 7:39:29 AM PDT by delta7
KEY TAKEAWAYS The European Commission wants to hand Ukraine $300 billion seized from Russia. Doing so likely would sound the death knell for the dollar and eventually the euro.
The message from the EU and the Biden administration is crystal clear: Western financial markets are now a dangerous place to park your money.
The talk of seizing foreigners’ assets is exposing these dollar-denominated loans as less than safe. Indeed, they’re more of a liability.
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia. Doing so likely would sound the death knell for the dollar and eventually the euro.
Treasury Secretary Janet Yellen, who has worked for literally decades to undermine the strength of the dollar, recently urged world leaders to take this disastrous step of outright theft.
But financial leaders worldwide, including those who adamantly support Ukraine, are sounding the alarm, citing the unprecedented fallout that would stem from further violating the sacrosanct nature of the dollar.
When Russia invaded Ukraine two years ago, the U.S. and its European allies seized $300 billion in Russian Central Bank assets. Relative to the size of the Russian economy, that’s the equivalent of $4 trillion in U.S. financial holdings.
>>> The Uniparty Is Only a Few Steps Away From Gutting the U.S. Dollar
The goal was to instigate panic in Russian markets, culminating in bank runs and general unrest, perhaps even leading to the ouster of President Vladimir Putin himself. It didn’t work.
Instead, American banks had a cliffhanging spring last year that included the collapse of Silicon Valley, Signature and Silvergate banks, while countless regional banks held on thanks to emergency loans from the Federal Reserve.
Apparently not content with sowing chaos in domestic financial markets, the federal government’s push to steal Russian financial assets would plant the seeds of pandemonium abroad.
The European Union is in lockstep with the Biden administration’s plan to transfer the frozen Russian assets to Ukraine to buy weapons—which, of course, would be sold by the EU and the U.S.
Some member states of the EU want to just hand over all $300 billion instantly to the corrupt oligarchs in Ukraine. Others want to start with just the interest payments accruing on these financial assets. (Of course, the frozen assets aren’t actually accruing interest now, so any payments to Ukraine would actually be more deficit spending by Western governments.)
Just sending the interest payments would be crossing a terrible threshold, further violating financial custodial agreements of dollar- and euro-denominated assets.
The message from the EU and the Biden administration is crystal clear: Western financial markets are now a dangerous place to park your money. This could fatally undermine global confidence in American and European financial management because the safety of your assets will have become dependent upon your standing in Washington and Brussels.
That’s a concern for corporations, but it could be an existential threat to countries that own a large share of international financial assets. The ever-present threat of theft, couched as financial sanctions, means nations effectively lose their autonomy, forced to kowtow to the whims of American and European bureaucrats.
The Biden administration has already threatened sanctions on Uganda over its LGBTQ policy, but that’s just the beginning. Similarly punitive financial ideas have been floated regarding abortion and environmental policies.
Now sanctions are becoming just the first step to seizing all of a country’s financial assets, and the rest of the world is waking up to the racket.
A few months ago, the Indonesian president gave a speech saying his country needed to diversify its dollar holdings and dollar-denominated assets, ominously citing, “Look what happened to Russia.” The Federal Reserve recently refused to disclose how much foreign exchange reserves and gold have been withdrawn from the United States since the Russian asset seizure.
>>> The Decline and Fall of the U.S. Dollar
The de-dollarization trend is decades old, a result of dysfunctional government crippling economic growth while inflation erodes the currency’s value. The dollar fell from 73% of currency reserves to 55% in 2021, but the seizure of Russian financial assets gave this trend a shove into overdrive.
The dollar’s share of currency reserve plummeted another 8 percentage points in just two years, falling to 47% in 2023.
It’s not just reserves, but international trade, too. Brazil has begun conducting some of its trade in Chinese yuan, and projections are for China’s share of trade to triple in the next decade. Other countries, including their central banks, are divesting their dollar holdings, preferring gold or other real assets.
The Fed’s interest rate increases have buoyed the dollar, but that is poised to reverse as the central bank readies a pivot to interest rate cuts in this election year.
Similarly, the turmoil around the globe has prompted a “flight to safety” where investors buy assets perceived to be safe, such as U.S. Treasuries. But the talk of seizing foreigners’ assets is exposing these dollar-denominated loans as less than safe. Indeed, they’re more of a liability.
If the people running our country were intentionally trying to destroy the dollar, it’s not clear what they would be doing differently.
gold is at record highs in every world currency.
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Historic Central Bank and large institutional buying- if they are all buying tons, maybe you should to.
That said, I cross checked the “ rumor” that China is telling their citizens to now switch from buying gold to buying silver. A relative in China ( banking industry) has confirmed this. ….1.5 billion Chinese buying silver insures the already depleted silver market goes only one way- up…..notice the world overnight PM markets, PM’s advance in the Shanghai markets, then are ALWAYS pushed down at about noon time in the NY market….manipulation?
Regardless, I find it interesting all of US supposed “ enemies “ ( Russia, China,etc ) are making it easy to buy Gold and Silver. Walk into your local bank, pay in cash, walk out with PM’s in your possession….need cash? Walk in your local bank and redeem your ounces for cash- try that in a U.S. bank, forbidden.
It appears those “ evil” governments are genuinely looking out for their people’s interests.
Its obvious that BRICS see the Bretton Woods system and primacy of the US dollar as the foundation of the US deep-state and military industrial complex. Putin, Xi and many under them have said this.
Might they motivate their citizens to try to collapse it through billions of individual actions? Seems too fantastically devious and "out of the box" to be possible
Nonetheless, the US is vulnerable to a collapse of fiat money, it seems there are no downsides, and its a lot cleaner than outright war.
Does the sun shine?
Is water wet?
Does a bill fold?
Can a square root?
Does a skunk smell?
Can a sine wave?
course of action is to do what people did during the inflation of the 1970s, which is to put our increasingly worthless fiat currency into hard goods of one type or another. This might mean Buying a larger home, fixing up or expanding your existing home, purchasing a new car, a new refrigerator, stocking multiple freezers with meat, or buying gold and silver as hedges.
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Amen brother, but you had better nix the Bitcoin option. Do you really think when a nation has its own sovereign digital currency, it will not abolish the competition?
Do note, China forbid Bitcoin in their country. They have developed their own CBDC, they will not tolerate “ competition “. The day is coming when Bitcoin will be abolished, first through high taxation, then ridiculous reporting requirements, then ridiculous selling requirements…..they will not forbid buying, but will destroy the selling mechanism——think Hunt Brothers.
Too bad, he is a pretty bright guy who could do a lot of good but he comes up with some serious OMG stuff on a semi regular basis
If Biden & Co. was intentionally trying to destroy the country, what would they be doing differently?
btt
Trying Baba Louie? There is no try, there is only is.
Concern about the US Dollar (USD) is not backed up by any recent monetary data.
Against a basket of foreign currencies - a basket that includes all the BRICS currencies - the USD has floated between $100 and $112 for the last 24 months.
$100 equals par or neutral. Numbers above $100 equal USD strength. Numbers below $100 equal USD weakness.
USD price as I write this: $105.78
https://www.cnbc.com/quotes/@DX.1
Yes, USA government - at every level - has severe financial problems.
Trillions of dollars in debt. And, trillions more in unfunded future medical and retirement benefits.
The good news - the rest of the world is in even worse shape than we are!
The Obama/Biden Admin is trying to destroy both the dollar and the country
Of course not! They have already destroyed it!
They are just temporarily artificially propping it up in case Donald Trump gets elected - then it can crash! Guess who gets blamed? >see Herbert Hoover!
I’ve been following the enaria rollout in Nigeria, and Ddash in the Carribean, as the push-pull tactics take hold.
We are emulating Venezuela, which I thought was a laboratory for America’s future, and now the digital games.
I’m thinking Montenegro has nice weather and beaches, very nice people (even though they were pirates once-upon-a-time), and a low cost of living.
They really want that cbdc
Western financial markets are now a dangerous place to park your money.
Wonder why Costco is selling gold bars as fast as they can stock them.
The stock market looks like a high speed yoyo.
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