Economic sanctions serve as a powerful foreign policy tool for the US government. But could this ultimately backfire on the US?
Over the last several years, many countries have made a concerted effort to limit dependence on the US dollar. The economic warfare waged against Russia reveals exactly why.
During a recent interview on RT America, Peter Schiff said investors should stay away from the dollar, not only because of the looming recession, but because its days as a reserve currency could be numbered.
Is this just hyperbole, or could the US dollar really fall off its throne? America’s enemies would certainly like to see it happen. And increasingly, so would its friends.
Russia added another 36.6 tons of gold to its reserves in November, according to the latest data released by the World Gold Council.
This follows on the heels of a 29.9-ton increase to its hoard in October and a 37.8-ton increase in September.
The Russians have an alternative money transfer system up and running, and according to a report in RT, it has now surpassed SWIFT in popularity in that country. This is part of a broader effort by countries like Russia and China to limit their dependence on the US dollar and set up alternative financial channels outside of the global dollar system.
The EU has announced it will create a special payment channel to circumvent US economic sanctions and facilitate trade with Iran.
Last month, German foreign minister Heiko Maas called for the creation of a new payments system independent of the United States. The announcement Monday sets that plan in motion.
Countries like Russia, China and Iran have been looking for ways to limit their dependence on the US dollar for years. More recently, we’ve even seen American allies looking to de-dollarize the world. Last month, German foreign minister Heiko Maas called for the creation of a new payments system independent of the United States.
It’s gotten to the point people are beginning to discuss a “post-dollar” world.
RT’s Max Keiser recently talked about the issue of the US weaponizing its currency with the head of research for GoldMoney.com, Alasdair Macleod.
A Russian lawmaker has suggested his country should develop a gold-backed cryptocurrency for payment of arms exports and other goods as a way to circumvent Western sanctions and limit his country’s dependence on the dollar-based global banking system.
Vladimir Gutenev serves as first deputy head of the economic policy committee at the State Duma – the Russian Parliament’s lower chamber. He suggested Russia should develop a gold-backed cryptocurrency as he called for a suspension of treaties with the US, including the non-proliferation of missile technologies agreement.
Over the last couple of years, we’ve been reporting on efforts to remove the US dollar from its throne as the world reserve currency. We’ve primarily seen moves toward de-dollarization from countries like China and Russia, and other nations within their orbits. It’s easy for Americans to dismiss efforts to undermine the dollar as desperate moves by their enemies that will never gain any kind of international traction. But now we’re beginning to hear the same de-dollarization rhetoric from American allies.
Earlier this week, German foreign minister Heiko Maas called for the creation of a new payments system independent of the United States.
Earlier this month, the US threatened to lock China out of the dollar system if it doesn’t follow UN sanctions on North Korea. Treasury Secretary Steven Mnuchin threatened this economic nuclear option during a conference broadcast on CNBC.
If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the US and international dollar system, and that’s quite meaningful.”
The threat may be meaningful, but it also might be empty.