Congress Just Supercharged the Dollar’s Downfall
Confiscation, Weaponization, and De-Dollarization
“The dollar’s role as the world’s primary reserve currency is a boon for the United States but a bane for the rest of the world.”
~ Barry Eichengreen
The U.S. Senate has predictably voted to give $95 billion to Ukraine, Israel, and Taiwan, just three days after the House of Representatives green-lit the assistance in a rare Saturday session.
But beyond the big spending, there was a little something tucked into the Ukrainian aid bill that’ll have major implications for you as an American: the confiscation of Russian dollar assets.
The passage of the Rebuilding Economic Prosperity and Opportunity (REPO) Act, as it’s called, adds a whole new dimension to the story that Matt Smith brought to your attention on Monday.
The Dollar Weapon
Once President Biden signs it into law, he’ll gain the authority to seize more than $6 billion in Russian assets held by U.S. institutions.
Now, in case you’re wondering why Russia held these billions of dollars outside of Russia, it’s because that’s what countries do when they have surplus dollars; they put them to work in the safe and trustworthy nation of America.
The joke’s on you, Russia…
But the $6 billion is just the tip of the iceberg.
You see, it’s not about the amount; it’s about how the U.S. sets a precedent for other Western countries to confiscate the nearly $300 billion in Russian state assets currently frozen under their jurisdiction.
To be fair, it’s not the first instance of the U.S. government’s “weaponization” of the dollar… far from it.
But it has become especially pronounced in recent years, targeting adversaries such as Iran, Cuba, Venezuela, Afghanistan, North Korea, China, and, of course, Russia.
But it never affects just these countries alone…
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