Just how short-sighted can the West get?
Russia
Threatens to Drop The Dollar and Crash The U.S. Economy if Sanctions
Are Imposed - Obama Signs Sanctions Anyway
Is
Russia bluffing, or is the world as we know it about to change for
ever?
6
March, 2014
On
Tuesday Reuters reported that a Kremlin aid Sergei Glazyev had
announced that if the U.S. were to impose sanctions on Russia Moscow
may drop the dollar as a reserve currency and refuse to pay off any
loans to U.S. banks saying that Moscow could recommend that all
holders of U.S. treasuries sell them if Washington freezes the U.S.
accounts of Russian businesses and individuals.
"We
would find a way not just to reduce our dependency on the United
States to zero but to emerge from those sanctions with great benefits
for ourselves," said Glazyev."An attempt to announce
sanctions would end in a crash for the financial system of the United
States, which would cause the end of the domination of the United
States in the global financial system"
That
statement is startling by itself, but the true gravity of this
situation is only evident when you consider it in context. China has
taken Russia's side in the Ukraine conflict (they are after all
allies) and China holds the lion's share of U.S. treasuries. If
Russia puts out the call to drop the dollar China would have a
choice: either hold on to those treasuries while the dollar slides
(losing their shirt in the process) or join Russia and dump their
holdings as well. It should be pretty obvious which way China would
go.
The
effects of a coordinated bond sell off by China and Russia would be
earth shattering. This would be the financial equivalent of a nuclear
bomb being dropped. It is no exaggeration to say that such a move
would mark the end of an era.
You
would think that this would prompt some serious reflection and that
diplomats would be scrambling to resolve this peacefully, but instead
today Obama signed a sanction order anyway and revoked the visas of a
number of Russian officials. All of this supposedly in response to
the violence in Kiev even though we
now have leaked phone conversations that indicate that it was in fact
the new coalition government in Ukraine that was responsible for the
shootings and that the West knows this. Combine
this with the fact that several
U.S. officials met directly with known Neo-Nazi leaders prior to the
coup in Ukraine and these sanctions are even more non-nonsensical.
Sources
Russia
warns the U.S. that they will drop the dollar if sanctions are
imposed, and says they will call for others to drop the dollar as
well:
In
response the U.S. imposes sanctions and visa restrictions on Russian
officials:http://www.theguardian.com/world/2014/mar/06/us-visa-restrictions-offici...
China
and Russia are in Agreement about the situation in
Ukraine: http://news.sky.com/story/1219922/russia-and-china-in-agreement-over-ukr...
Russia
warns it could crash the U.S. economy if sanctions are
imposed:http://www.rawstory.com/rs/2014/03/04/russia-warns-it-could-crash-u-s-ec...
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