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Congress Just Supercharged the Dollar’s Downfall

April 26, 2024

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…

…click on the above link to read the rest of the article…

Lesson of the Day: If You Weaponize the Dollar and Confiscate Assets, Expect Retaliation

July 21, 2023

Lesson of the Day: If You Weaponize the Dollar and Confiscate Assets, Expect Retaliation

Russia seized the local assets of Carlsberg beer and yogurt maker Danone. It now threatens Austria’s Raiffeisen bank.

Russia Seizes Western Yogurt and Beer

As backdrop to the Raiffeisen bank story, consider the Bloomberg report, Russia Seizes Western Yogurt and Beer.

President Vladimir Putin signed a decree in April allowing for “temporary” state control over the assets of companies or individuals from “unfriendly” states — which include the US and its allies.

Sunday’s move is the second time the Kremlin has used the decree to seize assets. Previously, Russia took control of utilities owned by Finland’s Fortum Oyj and Germany’s Uniper SE.

Russia and Ukraine accounted for about 13% of Carlsberg’s total sales and about 9% of operating profit in 2021. The company employs about 8,400 people in Russia and had previously separated the operations there from the rest of the group.

Carlsberg is assessing the legal and operational consequences. Fortum last week started a process of arbitration over the April seizure. But with Russia no longer concerned about appearing fair to western investors, it’s difficult to see how much recourse these or any other multinationals will have.

Procter & Gamble, Colgate-Palmolive and Philip Morris International have also remained. Coca-Cola HBC has the largest revenue exposure to Russia among European consumer-staple companies, Morgan Stanley said, saying the regional Coke bottler gets 12% of sales from that market.

Troubles at Raiffeisen Bank

Eurointelligence comments on Raiffeisen Bank Troubles.

After Russia took over Danone and Carlsberg, what fate is awaiting Austria’s Raiffeisen bank? The US and EU’s banking authorities pressure the bank for some time now to exit Russia, but progress is slow and risks are getting higher. After some failed attempts to swap assets with Russian banks in Europe, Raiffeisen is stuck between the rock and a hard place…

…click on the above link to read the rest…

“The Last War We Can Afford To Fight”: Tucker Carlson Sounds Alarm Over De-Dollarization, Slams Biden Admin For Pissing Off World

April 6, 2023

“The Last War We Can Afford To Fight”: Tucker Carlson Sounds Alarm Over De-Dollarization, Slams Biden Admin For Pissing Off World

As we’ve noted several times of late, a growing number of countries are threatening the US dollar’s status as the global reserve currency by conducting global trade without it – you know, the thing Saddam and Gaddafi threatened to do before they were ‘liberated’ from their mortal coils for other stated reasons.

Some recent headlines;

Fox News host Tucker Carlson has picked up on this, big time, noting that the process began after the Biden administration started wielding the dollar as a political weapon by freezing US dollars held by Russians.

Carlson cites an article from the Daily Caller, in which authors E.J. Antoni and Peter St. Onge write:

A second critical feature of a reserve currency is its apolitical nature. Which Biden is now gutting. After both parties in Washington destroyed the dollar’s stability with inflation, now the Biden administration has chosen to wield the dollar as a weapon. Together, the message to foreigners they should get out while they still can.

In response to Russia’s war with the Ukraine, the US froze the dollar reserves of Russia’s central bank. To be clear, these were not American assets, but were dollars owned by the Russian central bank and the Russian people. The seizure was intended to cause bank runs and collapse Russia’s credit system. It didn’t work.

Instead, it exposed the Biden administration’s willingness to violate the trillions of dollars foreigners rightfully own. The danger of this precedent is difficult to overstate.

This part is a must-hear from Carlson in response to the above (starts at 7:15 in the video below):

…click on the above link to read the rest…

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