America, like all nations, is and always has been under threat from foreign powers. Like the peoples of all nations this is something that Americans are used to and something that they can deal with…or could deal with. Things has changed and the new threats to America are both existential and difficult to deal with.
The new threats aren’t military; they’re economic. They’re also not the run of the mill threat to international trade. No, the new threats to America are foreign governments choosing to punitively divest themselves of US sovereign debt and eliminating the use of the US Dollar as their nations’ reserve currency.
Russia has bluntly pointed this out.
MOSCOW, March 4 (RIA Novosti) – An adviser to Russian President Vladimir Putin said Tuesday that authorities would issue general advice to dump US government bonds in the event of Russian companies and individuals being targeted by sanctions over events in Ukraine.
Sergei Glazyev said the United States would be the first to suffer in the event of any sanctions regime.
“The Americans are threatening Russia with sanctions and pulling the EU into a trade and economic war with Russia,” Glazyev said. “Most of the sanctions against Russia will bring harm to the United States itself, because as far as trade relations with the United States go, we don’t depend on them in any way.”
Glazyev noted that Russia is a creditor to the United States.
“We hold a decent amount of treasury bonds – more than $200 billion – and if the United States dares to freeze accounts of Russian businesses and citizens, we can no longer view America as a reliable partner,” he said. “We will encourage everybody to dump US Treasury bonds, get rid of dollars as an unreliable currency and leave the US market.”
Do not mistake me; in no way would I normally think this was a credible threat at this time. These are not, however, normal times and the Russian cultural psyche has proved itself willing to use “scorched earth” tactics. They’re also fairly strongly allied with China, who could both tolerate the damage to themselves from divesting themselves of US sovereign debt and eliminating the use of the US Dollar as their nations’ reserve currency. In point of fact, China would likely benefit from doing so in short-term. Hence, while the threat is not imminent, it is credible.
This, in all likelihood, isn’t going to happen. What is going to happen is that the Obama Regime will not push for sanctions against Russia for just about anything. And this, in turn, means less than it might since Europe’s flagging and vulnerable economy is dependent upon trade with Russia.
The important point is the threat is credible, extremely serious, and has been made. This not only shows the soft and flaccid underbelly of the America of the 21st century, it’s removes one of America’s greatest weapons, our trade.
Tags: America | China | Debt | Deficit | Geopolitics | Glazyev | Money | Politics | Putin | Russia | Sergei Glazyev | Vladimir Putin