From EJ Antoni and Peter St. Onge channel Vladimir Putin (Feb 2024):
America’s political establishment has less respect for the U.S. dollar than our foreign adversaries.
That was made clear when Tucker Carlson recently interviewed the Russian strongman President Vladimir Putin, who clearly articulated how the uniparty in Washington is destroying America’s greatest strategic and economic asset — her currency.
Article continues:
We warned on this site before how Biden’s unprecedented freezing of U.S. dollars owned by a foreign central bank has fundamentally jeopardized the currency’s hard-won reserve status. In fact, it’s a main factor now driving dozens of countries away from what they see as a dangerous and unpredictable United States — countries now including France and Saudi Arabia.
Of course, China is eager to exploit these fears and welcome countries into its rapidly growing BRICS anti-dollar bloc.
Here are some points with respect to Dr. Antoni and Dr. Stonge’s points. First, is there evidence that sanctions — either trade or financial — have significantly negative impact on US dollar holdings?
Source: Chinn, Frankel, Ito (JIMF, 2024).
Second, what do we know about BRICS dedollarization? Here is a picture of USD reserves held by the BRICS.
Figure 1: Share of foreign exchange holdings in USD, by central bank. Source: Ito-McCauley database,.
My advice: dedollarization might be occurring, but let’s not look to Vladimir Putin on what’s good for the dollar as a key international currency.
