by Nick Giambruno, International Man:
“It’s possible to have more than one reserve currency.”
These are the recent words of Jerome Powell, the Chairman of the Federal Reserve.
It’s a stunning admission from the one person who has the most control over the US dollar, the current world reserve currency.
It would be as ridiculous as Mike Tyson saying that it’s possible to have more than one heavyweight champion.
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In other words, the jig is up.
Not even the Chairman of the Federal Reserve can go along with the farce of maintaining the dollar’s supremacy anymore… and neither should you. (This has profound consequences for you and your savings, more on that in a moment.)
Powell’s comments occur in the context of what could prove to be one of the most short-sighted and self-destructive acts in history… the US government’s economic war against Russia.
In the wake of Russia’s invasion of Ukraine, the US government has launched its most aggressive sanctions campaign ever.
Exceeding even Iran and North Korea, Russia is now the most sanctioned nation in the world.
“This is financial nuclear war and the largest sanctions event in history,” said Peter Piatetsky, a former Treasury Department official.
He went on to say, “Russia went from being part of the global economy to the single largest target of global sanctions and a financial pariah in less than two weeks.”
Here’s a brief rundown of what has happened.
The US and European governments froze the US dollar and euro reserves of Russia—the accumulated savings of the nation—worth around $300 billion.
Russian banks have been kicked out of SWIFT, the system to send international wire transfers.
A stampede of Western companies have left Russia and are banning average Russian citizens from using their platforms.
Popular cryptocurrency exchange Coinbase blocked over 25,000 accounts linked to Russia.
Visa, MasterCard, and American Express have cut off Russia from their networks.
Even formerly neutral Switzerland joined the orgy of sanctions.
These are just a few examples of how Russia is being cut off from the US-dominated global financial system.
Of course, all this comes as no surprise to the Russians. They have prepared for this exact outcome for many years together with China. The Chinese Communist Party understands that if the US can take down Putin, they will be next. That’s why the Chinese are unlikely to abandon their strategic partnership with Russia.
So, instead of capitulating to US pressure, Russia immediately implemented alternatives to bypass the US dollar and US-controlled financial institutions.
Russia and China have alternatives to SWIFT to facilitate international financial transactions.
After US credit card companies blacklisted anything to do with Russia from their systems, Russian banks seamlessly switched much of their payment processing to China UnionPay.
UnionPay is China’s alternative global payment processing network.
It works just like Visa, MasterCard, or American Express, except it doesn’t depend on the US government’s good graces. It can operate independently of the US financial system.
China UnionPay is growing rapidly worldwide. Merchants and ATMs in over 140 countries accept it. It’s now one of the largest payment processors in the world.
Further, China, India, Iran, and Turkey, among other countries, announced, or already are, doing business with Russia in their local currencies instead of the US dollar. These countries represent a market of over three billion people that no longer need to use the US dollar to trade with one another.
All of this is a big problem for the US government, which reaps an enormous amount of power because the US dollar is the world’s premier reserve currency. It allows the US to print fake money out of thin air and export it to the rest of the world for real goods and services—a privilege no other country has.