August 10, 2014 – Today’s edition of the weekly column covers the ramifications of sanctions on our monetary system. Sanctions against Russia only push the country closer to the new alliance, BRICS (Brazil, Russia, India, China and South Africa), at a time when European banks are already reducing their connections to American clients. Restrictions such as FATCA (Foreign Account Tax Compliance Act), and acts of war do nothing to help improve our economic future.
From the column:
The US government has always relied on the cooperation of other countries to maintain the dollar’s preeminent position. But international patience is wearing thin, especially as the carrot-and-stick approach of recent decades has become all stick and no carrot. If President Obama and his successors continue with their heavy-handed approach of levying sanctions against every country that does something US policymakers don’t like, it will only lead to more countries shunning the dollar and accelerating the dollar’s slide into irrelevance.
What are your thoughts on the future of the dollar and the impacts of sanctions on our currency? Share them in the comments below.