Congress finally passed the Foreign Aid Bill and they threw in a potential ban of Tik Tok which got a lot of attention. However, along with this is the very important continuation of the Repo Act which allows the U.S. to confiscate Russian assets. This did not get much notice. Supposedly these funds will be used for Ukraine. Despite what may be good intentions, this is very dangerous.
First, it is a violation of the norms of international law. Most importantly, it alarms other nations as to the motivation and precedent of U.S. actions. They are concerned with what the U.S. may do to them if they do something America does not approve, like controlling Tik Tok. This fits in with their long time fear and dislike of American economic influence.
The U.S. dollar is the reserve currency of the global economic system. It is used in about 80% of all transactions. In particular, with the long standing agreement with some of the oil producers, they sell their oil in U.S. dollars instead of their own national currency. This system gives the U.S. a very powerful tool to control and influence all nations.
As a result, several nations have banded together to confront American power. They go by the acronym BRICS, Brazil, Russia, India, China, and South Africa. Since 2009, they have persuaded a dozen or so other nations to join their affiliation. As a group, they have steadily increased their global Gross Domestic Product (GDP) and are a serious force in global trade.
They have been working on a process to create an alternate currency for global transactions. This will probably take some time but recent actions by the U.S. seem to have increased their efforts. It is uncertain what form this alternate global currency will be. Interestingly, their sovereign banks have substantially increased their gold reserves the past few years.
The dollar is still very strong relative to other currencies. This actually causes problems for other countries standard of living. This will most likely remain so for awhile. However, this international trend along with our own trend of explosive debt and government spending will mark the beginning of the end of dollar dominance.
Keep in mind, the loss of our strong reserve currency will have a significant effect on our own lifestyle.
Also, historically, currency wars often lead to military wars.
( Part 1 was posted 9-15-21, click blog and scroll down)