The United States government has resorted to frustrated threats and whining after realizing that more and more US allies are joining the anti-dollar alliance.
This news comes after the UK announced that it will join the new China-led Asian Infrastructure Investment Bank (AIIB) as a founding member a few weeks ago. Shortly after this, Germany, France and Italy decided to follow suit and join as well.
Has the reign of the US dollar as the currency linchpin finally come to an end?
For quite a few decades now, the US has been the unchallenged global economic and political superpower. The US dollar and its banking system were trusted worldwide because of its relative stability. People had also placed their trust in the American government. But there’s a limit to how irresponsible, reckless, and threatening you can be before all that trust evaporates away. Eventually such behavior catches up to you.That time has come.
The US is unimaginably deep in debt right now. The US government’s own numbers, in fact, estimate its level of insolvency at roughly $60 trillion. What this means is that if you add up all the assets of the United States- every acre of land, every tank, every drone, every drop of oil in its strategic reserve… and subtract all the debt and liabilities, the result is MINUS $60 trillion. [1]
That is the net-worth of the government of the US. Add to this the fact that the government has used its well-trusted currency and banking system as a tool to blackmail other countries. Take for example, FATCA (the Foreign Account Tax Compliance Act). Here’s what a Forbes report had to say about it:
“Never heard of FATCA? You will. FATCA—the Foreign Account Tax Compliance Act—is America’s global tax law. It was quietly enacted in 2010, and after a four-year ramp up, it’s finally in effect. What is most amazing is not its impact on Americans—although that is considerable—but its impact on the world. Yes, the whole world.
Never before has an American tax law attempted such an astounding reach. FATCA requires foreign banks to reveal Americans with accounts over $50,000. Non-compliant institutions could be frozen out of U.S. markets, so everyone is complying.”
It can be seen that if any bank dares to defy the US government, it will be punished harshly. This act allows the government to slam foreign banks with astonishingly high fines- $9 billion, for example, in the case of French Bank BNP Paribas. BNP’s wrongdoing? Conducting business with countries that the US dislikes, like Cuba (wait a minute, aren’t US-Cuba relations thawing?) and Iran (isn’t there talk of reducing sanctions?)… Or at least conducting business with these countries before the US itself decides to give the green light. It is important to note that BNP Paribas did not break any French laws. Though the business was done through its Swiss subsidiary, it did not break any Swiss law either. But US laws supersede local ones it would seem.
This sort of unjustified pressuring, blackmailing and extortion hasn’t been forgotten by the world. Nations are realizing that the US isn’t the only option anymore. There are new contenders appearing. More and more countries are turning to China, which by certain parameters is the largest economy in the world. The US government cannot do anything about this, and is being left behind for the new kid on the block.
Sources:
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