It seems that the biggest threat that the world economy faces as of right now is the weaponization of the U.S. Dollar. For those that are reading this and have no idea what this means, it means that instead of allowing Free Trade to occur or allowing the Hidden Hand of the Free Market to take its course, the U.S. uses their power as the world's reserve currency to invoke economic sanctions on countries such as a Russia and any other country that may decide to do something that the United States doesn’t like or agree with.
When the United States weaponized the U.S. Dollar in the form of sanctions during Russian President Vladmir Putin’s Special Military Operation in Ukraine – because of the U.S. being the worlds reserve currency, the United States had the ability to freeze Russian owned assets and bank accounts. Thus, this financial abuse on an international level made Russia ineligible to pay their bills even though they had the funds in their accounts to do so.
Moreover, when the U.S. seized Russia’s monetary assets including assets that Russia outright owned, they used and gave those funds to the country of Ukraine. This is essentially theft. Another thing that came along with U.S. sanctions was the fact that the U.S. also held the power to sanction other countries in the same manner if they provided any aid to Russia by cutting them off from the SWIFT banking system.
This sent not only shockwaves across the globe and within the geopolitical atmosphere but the freezing and seizing Russian assets resulted in blowback that the United States didn’t anticipate and wasn’t ready for. And that blow back was the accelerated growth of not only economic multi-polarity but the hastening of countries that were already looking to “cancel” the U.S. Dollar, and a significant addition of more countries looking to move away from the U.S. Dollar as the Reserve Currency to pay their international debts and oil purchases. The occurrence of this blowback has emboldened at least 17 countries to seriously seek to inquire and or flat out join the BRICS Nations thus widening the scope of the BRICS Nations to the BRICS+ acronym.
When the U.S. decided to weaponize their currency as the worlds reserve currency – it crossed the line in the eyes of many. In doing so, it spurred a gold buying frenzy for countries and private individuals alike to have alternative assets that would be free from the power of the weaponization of the U.S. Dollar. This also allowed people to hold on to the following notion when it comes to monetary assets: “if you don’t physically hold it – you can’t control it”. And since the U.S. Dollar isn’t pegged to gold or any real physical assets of value as it is a fiat currency and essentially worthless, the logic of obtaining a monetary asset that you can physically hold and own without the fear of having it being sanctioned and frozen by a governmental entity is logically sound. Well, that is at least for now.
The reason why we say “at least for now” is because there was a time when the U.S. Government made owning gold a crime. It seems as if many people have forgotten what the U.S. Government will and can do. In what is known as the “Gold Reserve Act of 1934”, the United States government held and enforced the position that the people of the United States could not have and use gold as a monetary option. The only time a U.S. Citizen could have gold in their possession would be if the citizen had gold jewelry and collectors’ coins. During that time there were people that were indicted for violating the law which restricted the ownership of gold for trade.
So where do people who want to get from under the thumb of the U.S. Sanctions go from here? Only time will tell.
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