Yesterday President Obama announced more sanctions against Russia except this time they had teeth. Forget the Kaubuki theater going on in Ukraine. This was really retaliation for the Russian assault against the hegemony of the US dollar as the reserve currency of the world. Russia was the leader in the recently formed BRICs bank and is actively seeking to de-dollarize the world.
In addition the Obama administration has done a bang up job of fomenting open dissent by our partners against the dollar. For example, recent actions against French banks for supposed infractions has French officials actually calling for an end to the dollar’s rule. The powers that be should be very careful when it comes to the dollar. Should we loose our reserve currency status then the standard of living in this country would plummet.
Make no mistake about it but we are unofficially at war with Russia now. The prior sanctions were a joke but these actually affect the flow of capital. I think it is only a matter of time until tanks roll into the Ukraine now that we have upped the ante.
Stock futures are down due to the sanctions and we are still contemplating what the newly hawkish Janet Yellen said as well. The market is beyond stretched and these two things may be all the excuse that we need to head lower as we are technically set up for a correction. However, the bull is strong and we will have to wait and see how this unfolds and perhaps earnings will save save us. It is just starting to get interesting. I think many stock fund managers are going to have sleepless nights while on vacation this summer.
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BlueStar, although this could happen over time, and perhaps trade will be diverted to other currencies, what currency is deep enough to handle where to park money i.e. bonds, stocks, real estate etc.?
I think this death to the dollar is too much and in fact the Russians have more to lose in this. Their economy is not as diverse as US – hence tanks will roll while trying to blame someone else for the mismanagement of their money from the natural resource dividend.
Albeit stupid, Russia has more to lose.
jimmy,
I agree the dollar is not going to collapse anytime soon. In fact I think it could rally as the geopolitical uncertainty increases. My point in wrting this note was to inform people about a war you will never hear in the MSM. A strong dollar is bad for risk assets due to the huge carry trade.
IMO it’s not necessarily about the death of the dollar. it’s about using the dollar in oil/energy exchange (or any trade for that matter), when the parties have no reason to… and russia has the backing of this country named china… and that is why the “BRICS Bank” is becoming a big deal.
“I think it is only a matter of time until tanks roll into the Ukraine now that we have upped the ante.” Or a passenger jet is shot down?
you’ve got something here
False Flag ..
In some way the U.S dallar decline as
the favored currency is already in decline.
During my recent trip to europe ,they wanted nothing but euros.
Buy stocks or realestate with surplus U,S. bucks
bc21,
I agree.
JB,
Potentially.
Jolly,
Creepy timing.
bluestar, don’t you find it interesting that even as Obama is leveling sanctions against Putin, they are still holding long telephone conversations? It makes me think a lot of this is staged to appease behind the scenes string pullers on both sides but that those two actually get along somehow and are trying to work something out.
Juice,
I love a good conspiracy theory. Since most of them are coming true. However, I think Obama and Putin hate each other. Body language says it all.
If financial sanctions force Russia to invade and stop the ethnic cleansing then I’d say Obama has just done something good (however unintentional that consequence might be).
As for the rest of it, these retards act like the rest of the world is dependant on them, when in fact it is the other way around.
Financial war looks to be morphing into real war drums already. Media going ape shit with neocons basically saying putin shot down that plane. That was quick.
ironbird,
lighting fast. my gut is telling me that there is something very fishy about this and the timing.
The 1 trillion new currency picture accompanying your commentary is so spot on, namely that it names Oprah as Sec of theft. After all she is person zero that lead to his election in the 1st place.
blue & ironbird –
something is definitely fishy:
http://globaleconomicanalysis.blogspot.com/2014/07/ukrainian-buk-air-defense-systems.html
http://globaleconomicanalysis.blogspot.com/2014/07/did-rebels-have-buk-system-how-about.html
Ukraine???