#crypto #cryptocurrency #DeFi #banks #money #consumers #knightsbridgedao #Russia #Ukraine #war #China
$BTCUSD $ETHUSD $KNIGHTSUSD $USD
“Globalization likely ended the minute the 1st Russian soldier crossed into Ukraine, and with it, the idea of a centralized global currency.” –Paul Ebeling
As Western nations rallied around Ukraine and condemned Russia, others took a far more restrained approach, from South Africa whose President Cyril Ramaphosa sought a balanced position to the war, to China’s silence on the matter.
Brazil’s President Jair Bolsonaro declared, “We will not take sides. We will continue being neutral and help with whatever is possible.”
While Mexico’s President Andrés Manuel López Obrador declined to join his country with Western sanctions being levelled against Russia, declaring, “We are not going to take any sort of economic reprisal because we want to have good relations with all the governments in the world.”
For anyone who consumes Western media, it may appear as if the world is united in condemnation of the Russian invasion of Ukraine, but dig deeper, read between the lines, and it becomes really clear that there is no such global coalition.
And this could have important implications not just on the rules-based postwar global order led by the US, it could also have dramatic impact on the future of international finance, not least of which has been the move by the US and its allies to freeze Russia’s foreign currency reserves.
So dominant is the Buck that on the eve of Russia’s invasion of Ukraine, as much as 25% of the country’s foreign assets were denominated in Greenbacks, assets which Moscow has since discovered it can no longer access. And this is not the 1st time that Washington has weaponized USD.
Soon after American troops left Afghanistan, Washington took measures to freeze the conquering Taliban’s access to the country’s foreign reserves, almost all of which were in dollars and held in US financial institutions.
The Biden administration’s freezing of Afghan’s foreign assets has plunged the country into economic ruin and today as much as 95% of the Afghan population does not have enough to eat on a daily basis.
While imposing sanctions on Afghanistan, the world’s 113th largest economy, is unlikely to have major ramifications to the global economy, sanctioning a country the size of Russia, which is the world’s 11th largest economy, has serious repercussions that the world is coming to terms with.
The power of US sanctions in derives from the dominance of USD which is the most widely-used currency in trade, financial transactions and central bank reserves.
Yet, by explicitly weaponizing it against a country the size of Russia, the US and its allies risk provoking a backlash that could ultimately undermine the Greenback and decentralize the global financial system into blocs that would increase inefficiencies, raise the threat of currency wars, rampant inflation and leave everyone worse off.
History is replete with how wars have upended previous currency hegemonies, from the Romans to the British. But these sanction do not bother President Putin, as he is a long term player.
Note: You Cannot Manipulate a Decentralized Currency
Have a prosperous week, Keep the Faith!
