But why fuss about it now?
The immediate causa proxima is the over-reach of the ‘Sanctions Regime’ by the US in trying to clamp down on Russia (and Iran-Venezuela before it) by confiscating their dollar reserves.
Imposing sanctions like freezing nearly half ($300 billion) of Russia’s foreign currency reserves and the removal of major Russian banks from SWIFT (a global messaging system for banks that enables cross-border money transfer instructions) has made many other countries realise that the US could “weaponise” the dollar against them as well.
This has set off a kind of bank run on the dollar, visible below the surface. Almost everyone outside the US allies is looking for an option to hold their store of value in a non-dollar holding.
Importantly, a large number of sins of the US government that were earlier forgiven (large twin deficits - a high current account deficit and a high fiscal deficit - both funded by foreign central banks) will now suddenly be remembered and will come home to roost.
How did this all come about?
Bu hikaye Wealth Insight dergisinin June 2023 sayısından alınmıştır.
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Bu hikaye Wealth Insight dergisinin June 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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