PATRICK LAWRENCE: Weaponizing the Dollar

The Trump administration’s incessant sanctions wars are curbing the dollar’s global hegemony and speeding the demise of U.S. empire.      

By Patrick Lawrence
Special to Consortium News

The signs are mounting steadily now. As the Trump administration weaponizes the dollar in defense of American hegemony, it is prompting many other nations to find alternatives to the U.S. currency as the default medium of exchange. The long-term implications of this swiftly advancing trend, evident among allies as well as those Washington considers adversaries, cannot be overstated: At stake is the longevity of America’s global preeminence.

The just-concluded Group of 20 session in Osaka, Japan, was a dramatic demonstration of how quickly “de-dollarization” efforts are coalescing. And the pattern could not be clearer: The Trump administration’s incessant use of unilateral economic and financial sanctions against perceived enemies, which is almost certainly without precedent, is high among the reasons these efforts now gather momentum at a pace few in the financial markets or in official circles anticipated.

Trump and U.S. team meet with Xi Jinping and Chinese delegation, June 29, 2019, at G-20 in Osaka. (White House/Shealah Craighead)

The impulse to dedollarize international trade and financial transactions has been evident for some time. Russia has actively encouraged its trading partners to avoid the dollar in favor of local currencies since Washington imposed sanctions against Russia following the U.S.–cultivated coup in Ukraine five years ago. Russia is now recruiting other nations to participate in its alternative to the U.S.–controlled SWIFT bank-messaging system. China has set up a parallel mechanism, the Cross­–Border Interbank Payments System.    

China launched an oil-futures market denominated in yuan little more than a year ago. Its annual turnover is already the equivalent of $2.5 trillion. The Shanghai Futures Exchange, where oil futures are traded, recently announced plans to offer forward contracts in rubber, nonferrous metals, and other commodities — all to be transacted in yuan.

The G–20 gathering marked an important step for these de-dollarization efforts. France, Germany, and Britain announced on the opening day that a trading system developed over the past year to circumvent U.S. sanctions against Iran — and any entity transacting with it — is now operational. The Instrument in Support of Trade Exchanges, or Instex, replaces the Special Purpose Vehicle Europeans devised a year ago. All three sponsors, along with Russia, China, and the U.S., are signatories of the 2015 accord governing Iran’s nuclear programs, which the U.S. repudiated last year.

Salvaging the Nuclear Deal

Instex is intended to salvage the multi-sided agreement without U.S. participation.  And Iranian media reported that the Islamic Republic put in place a corresponding system, the Special Trade and Finance Instrument, last spring. It is not clear how effective Instex will prove in practice or whether it will be enough to persuade Tehran to remain within the bounds of the nuclear accord. The initial signs are mixed: Iran said Sunday that it will begin enriching uranium beyond the pact’s limits; in making the announcement, a foreign ministry official also indicated that Tehran wants to save the agreement.

Eccles Federal Reserve Board Building, Washington, D.C. (Ron Dicker, CC BY-SA 4.0, via Wikimedia Commons)

However well Instex performs, its geopolitical significance is evident. It effectively institutionalizes a rift in the trans–Atlantic alliance that has widened steadily since the Obama administration force-marched the Europeans into the sanctions against Russia after the Ukraine crisis broke open. Instex is also the most important attempt to date to challenge the dollar’s hegemony as the world’s trading and reserve currency.

The Osaka G–20 meeting had other surprises. In a major speech before the opening session began, Vladimir Putin urged other members of the BRICS nations —Brazil, Russia, India, China, and South Africa — to increase the proportion of its trade conducted in currencies other than the dollar. Given the Russian president spoke at a leading international forum, this was his most pointed challenge to dollar hegemony to date.

And it starts to look like a concerted effort. Izvestia, the Russian daily, reported simultaneously that the Russian Finance Ministry and the People’s Bank of China, China’s central bank, had just signed an agreement to increase ruble-denominated and yuan-denominated trade to as much as half of bilateral transactions. No timetable for this shift was reported.

BRICS nations together account for not quite a quarter of global economic output. Last spring they tested a payment system intended to allow users to meet financial obligations in local currencies — an undertaking Putin plainly had in mind when he spoke in Osaka.

Profligate Use of Sanctions

The Trump administration’s profligate use of sanctions — they are currently in place against roughly 20 nations, most prominently Iran, Russia, Syria, Venezuela, Cuba and North Korea — did not inspire the current de-dollarization phenomenon. Trump’s Washington merely forced it forward. It also weakens trust in the dollar every time it freezes the assets of designated adversaries such as Venezuela, or companies and individuals residing in “enemy” nations such as Russia and Iran.

Russian President Vladimir Putin, left, and Trump during G-20 in Osaka, June 28, 2019. (White House/ Shealah Craighead)

It is remarkable that this administration so far fails to recognize that it is doing at least as much damage to the dollar’s credibility as any nation planning to circumvent its use. Washington never learns, it seems. Even before the Europeans unveiled Instex in Osaka, the Treasury Department had already threatened to sanction the system’s sponsors and anyone who uses it. 

The speed with which other nations now seek alternatives to the dollar is also a remarkable feature of the de-dollarization phenomenon. Competition among reserve currencies has long been a recurring topic in financial markets. But until now the end of dollar hegemony has commonly been considered a far-off development unlikely to occur in the lifetime of anyone now living. This is no longer likely to be so.

It is important, however, not to read too much into Instex and other recent developments. The dollar is not balanced on any precipice of imminent decline. It still accounts for roughly two-thirds of global foreign exchange reserves, according to the International Monetary Fund. A far higher proportion of international transactions are still conducted in the U.S. currency. It remains likely that a serious challenge to dollar hegemony is still a matter of a decade or more in the future.

But this challenge is now coming. This is how the news from Osaka, Instex, the recent Sino­–Russian agreement, and the efforts of the BRICS are best understood; as the first steps in the mounting of this challenge. Washington’s defense against it will be fierce, harming the lives of many.

The dollar is the cornerstone of American power. The use of this power, at its most brazen and crude — the sword out of the sheath — is evident now in the sanctions wars. The U.S. can bring any nation it wants to its knees. It can freeze the assets of any entity that is invested in the U.S., has deposits in the U.S., or buys U.S. Treasury paper. Being the world’s sine qua non reserve currency puts the U.S. at the center of global commerce and induces dependence in reverse; everyone needs access to the dollar.

The currency’s decline, when it begins in earnest, will be a good measure of the American empire’s passing into the past.

Patrick Lawrence, a correspondent abroad for many years, chiefly for the International Herald Tribune, is a columnist, essayist, author and lecturer. His most recent book is “Time No Longer: Americans After the American Century” (Yale). Follow him on Twitter @thefloutistHis web site is Patrick Lawrence. Support his work via his Patreon site. 

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72 comments for “PATRICK LAWRENCE: Weaponizing the Dollar

  1. Jas
    July 16, 2019 at 18:23

    Ok I stopped reading when the author was stupid enough to say this is “without precedent”….seriously have you not been paying attention for the last 30 years? The dollar was weaponized a long time ago. This is the reason Obama invaded Libya. This is the game we have played with Venezuela for decades now. This is how Bush sr and Clinton kept Saddam in check. Any buffoon who thinks this is without precedent should stick to writing for their school paper.

  2. KiwiAntz
    July 14, 2019 at 08:05

    Another really knowledgeable man, called Mike Maloney, who can help you understand this very complex issue in layman’s terms, just Google him? He contrasts the demise of the US dollar & particularly currency debasement using the lessons of History & how Empires rise & fall. America’s use of the US dollar has historical precedents with the Roman Empire & it’s eventual collapse that has stunning parallels to the demise of the US Empire? A Debased currency & money printing with massive corruption & a huge bureaucracy with excessive taxation & inequality with destruction of the Middle & working classes! And a out of control Military with Military overreach? Sound familiar, sound like todays America? No that was the Roman Empire but History is repeating itself with the American Empire & those who don’t learn from History are doomed to repeat the same mistakes!

  3. Brian James
    July 10, 2019 at 12:06

    Jul 10, 2019 Inside The Battle For the Next Global Monetary System – Facebook Libra vs Central Banks

    Could these be the opening shots in the battle for the next global monetary system?

    https://youtu.be/nkU8fdQv8E4

    • July 10, 2019 at 20:14

      Rothschilds push for an all digital currency. Global. Too late to go back to actual money with intrinsic value,gold backed?China, Russia and others have been stockpiling gold.

    • OlyaPola
      July 11, 2019 at 05:22

      “Could these be the opening shots in the battle for the next global monetary system?”

      Lateral systems are interactive and hence it is always difficult to establish a “start” although it is possible to perceive modulations of trajectories.

      So testing hypotheses of 1943/44 or 1971 may illuminate trajectories.

  4. Yvonne
    July 10, 2019 at 10:43

    Bonnie Faulkner has an interview on her gunsandbutter website with Michael Hudson: de-dollarizing the American empire. Very enlightening on how system works.

    • Maxwell Quest
      July 10, 2019 at 20:29

      Thanks, Yvonne, for pointing to the Michael Hudson interview on the Guns and Roses blog.

      Paul Craig Roberts wrote an article last year titled “For Economic Truth Turn To Michael Hudson”. It’s easy to see why, since the fundamental ideas which Mr. Hudson highlights in the above interview go far in explaining all the monetary and foreign policy craziness we’ve experienced in the last few decades, and why Asia is now currently striving hard to get out from under the thumb of a world financial system dominated by US controlled central banks.

      As you said, “Very enlightening on how system works.”

  5. Richard Wicks
    July 10, 2019 at 05:43

    The dollar is the weapon of the Federal Reserve. It’s a private cartel of banks. Destroying their power will end most of the wars we are involved in, save millions of lives, and hopefully at the end, leave just a few people with their heads on pikes.

    We’ve not had a free market for 20 years. Any step taken to destroy the dollar is a good thing. The Federal Reserve is a cancer. They control the drug trade, they bribe all the politicians in the EU, they finance all the wars.

  6. Diam
    July 10, 2019 at 03:01

    None of that matters as long as the US never trades in foreign currency. Other than that itjust doesn’t matter.

    • Josep
      July 11, 2019 at 05:49

      Look at some Russian websites (such as chgtrk.ru and tsargrad.tv, and even the Russian version of Yandex) and television broadcasts, and you’ll find the values of the euro and US dollar stated in rubles. Very seldom do you see the values of yen, yuan, Swiss francs or pounds. Considering how the US is an adversary to Russia, I’m surprised Russian state-owned broadcasters still display exchange rates in dollars at all.

  7. Paul Spencer
    July 9, 2019 at 23:00

    I read a hint about tariffs as domestic taxes, but I think that the idea deserves somewhat more emphasis. Who pays the tariffs? Average USians. Who collects the money? The U.S. government. Quite a nice windfall – kind-of a superVAT.

    • Bruce Hitchcock
      July 10, 2019 at 20:18

      Yes Paul Spencer.A way to offset the tax cuts without raising taxes .

  8. ranney
    July 9, 2019 at 20:29

    I don’t really understand how it works to use the dollar or anything else as the currency of choice, or why it is so difficult to change it to some other form – like the Euro for instance.

    I have a friend who runs an investment advisory group and he told me something startling the other day. He said that many countries now have negative interest and he named two of these countries which blew my mind. The two countries were Japan and Switzerland of all places! Negative interest means, for example, if you have a bank savings account and you put money into it, instead of earning say 1% or 2% interest on it you receive NO interest and in fact (because there is now negative interest) you are charged money for putting it there! Obviously no sane person would do that, so businesses and banks are now putting their money in US bonds or CDs which have various low interest rates, but at least are not negative. He said that many countries (japan and Switzerland among them) have declining economies which is why they have negative interest rates.
    He said the the US economy is also slowly declining, but hasn’t reached the negative point yet, but he predicted that it probably would in about a year, and we would go into recession.

    As a retail business owner I can attest that retail is declining – not just my business, but retail all up and down the street. You’ll be happy to know that bars and restaurants are still doing fine.
    I gather from the responses to this article that some of you actually understand this. I wonder if you can explain what I just wrote about – about negative interest etc? I don’t understand this at all.

    • Diam
      July 10, 2019 at 03:05

      Interest rates have to d with controlling inflation more than anything else,so more likely that there’s no threat of inflation anywhere in sight within those two nations.

      • Josep
        July 11, 2019 at 05:45

        I had the same feeling.
        Back when coins were still minted in silver, the US dollar fetched four to five francs (Switzerland was a member of the Latin Monetary Union, and the 1-franc coin corresponded with a short-lived 20-cent piece). Nowadays the franc is slightly above the dollar. Switzerland was even the last country to abandon its link with gold in 2000.
        From the end of WWII until 1971 (when the Bretton Woods system was abolished), one dollar fetched 360 yen. As of this writing, it’s 108 yen to the greenback.

    • Skip Scott
      July 10, 2019 at 07:29

      I am no economist, and I have little understanding of the complexities of the interactions of fiat currencies. But it doesn’t take much understanding to see that it is basically “faith” in the dollar (and smart bombs) that is the only thing propping up its value at this point.

      As for retail, Amazon is the main reason for the decline. Nobody goes to brick and mortar stores anymore. Amazon is sucking the life blood out of small businesses across the country. I urge everyone to boycott Amazon. If you can’t take the time and energy to support your local businesses, at least spend the time and a few extra clicks to buy it from somebody else. The aggregation of power from mergers and monopolies is one of the major corrupting influences on our government. Amazon is a predator, and Bezos is a propagandist as well, now that he owns the WaPo. He also is in bed with the CIA via a $600m contract.

      • Josep
        July 11, 2019 at 05:10

        As for retail, Amazon is the main reason for the decline. Nobody goes to brick and mortar stores anymore. Amazon is sucking the life blood out of small businesses across the country. I urge everyone to boycott Amazon. If you can’t take the time and energy to support your local businesses, at least spend the time and a few extra clicks to buy it from somebody else.

        Another added benefit of going to brick-and-mortar stores instead of online shopping is the ability to do transactions in cash.
        Problem is, in a country like the USA where infrastructure favors motorists over pedestrians and investment in public transport is scant, you’re forced to use a gas-guzzling car to drive tosaid brick-and-mortar stores. This could be more or less a scheme to milk the average taxpaying American into consuming more petroleum than the country can import. Heck, this

        The aggregation of power from mergers and monopolies is one of the major corrupting influences on our government.

        can apply to the American oil industry as well.
        What makes it all the worse is how a portion of our population somehow believe that God put all that petroleum there for us to use it. I find this fallacious, but I can’t fathom why.

        and Bezos is a propagandist as well, now that he owns the WaPo.

        Case in point: this article from the WaPoo in 2015 claims that Russia was removing Western detergent brands from supermarkets. Meanwhile, this Russian YouTube video from 2019 (warning: cussing) shows the same Western brands still on store shelves (at the 6:00 mark). And the readers of WaPoo are just as Russophobic as the writers, blindly following their narratives. What is it about dumb articles like this one that attract dumb comments?

    • Josep
      July 11, 2019 at 04:53

      why it is so difficult to change it to some other form – like the Euro for instance.

      My guess is that the other countries are being forced to use dollars and have no choice in the matter. Otherwise, they’d go with a more modern currency whose banknotes vary in color and size by denomination (think of Monopoly money, but real) and whose coins are minted with numerals.
      The US government forces other countries to use US dollars at gunpoint. Every entity that has made an attempt to move to some other currency, whether gold-backed or fiat, has been gunned down by USian troops in an attempt to force the entity to keep using the petrodollar. Saddam Hussein, for instance, was executed after he started selling oil in euros. My bet is that the EU continues to use dollars so as to avoid sanctions.
      Does this answer your question?

      As much as I dislike the EU and euro (whose flaws have been discussed elsewhere in this site) I must admit I, as an American, envy the design of physical euro coins and banknotes, not to mention its symbol (€) makes a lot more sense than the dollar sign ($) (neither ‘dollar’ nor ‘peso’ begin with S). Problem is, that’s the least of my concerns, and I wouldn’t be surprised if many others here don’t give a toss about it either.

  9. KiwiAntz
    July 9, 2019 at 18:21

    Steve Brown has a filed a recent article on “the Duran” website that addresses this very subject of America’s waning power & the role of the US Dollar? It compliments this Consortium News article, perfectly so check it out!

  10. rosemerry
    July 9, 2019 at 16:40

    I know about the power of the dollar, but surely there can be some recourse to international law (even if the USA refuses to accept it) when the USA enforces the cruel sanctions, completely regardless of their illegality, on everybody on earth that it decides to punish. I suppose the problem is lack of solidarity against this bullying, with the UK obeying the US and seizing an Iranian tanker, for a recent example. The rule of law, claimed to be precious by the “democracies” has fallen apart.

    • evelync
      July 9, 2019 at 18:37

      yes, indeed.
      that’s why when I read an article in the Deseret News regarding Bernie Sanders and others supporting voting rights for inmates of prisons (many of whom are victims of the system instead of perpetrators of some crime) and responders to that article express disagreement with giving incarcerated people that right, I wonder how they feel about the really big violators of the law – the lawlessness of the most powerful….

      whew….

    • Diam
      July 10, 2019 at 03:11

      Tariffs are to punish Americans and force the people into private borrowing and predatory lending which enriches Wall Street as planned by the bought corrupt high government robber barons,which are owned by Wall Street. The upcoming recession is being manufactured, because after recessions stimuluses follow,which will also predominantly only benefit Wall Street, Corporations and industries. The US is a Monetarily sovereign Nation with a Free floating non convertible Fiat currency and can never go broke! The thugs in the White house know this.

    • OlyaPola
      July 10, 2019 at 04:54

      “I know about the power of the dollar, but surely there can be some recourse to international law (even if the USA refuses to accept it) when the USA enforces the cruel sanctions..”

      You don’t transcend a system by emulating it, hence others pursue other pathways within lateral processes, including but not restricted to re:

      “O Society
      July 9, 2019 at 06:06

      The purpose of a military conquest is to take control of foreign economies..”

      OlyaPola
      July 9, 2019 at 09:39

      “The purpose..”

      “and to conflate an aspect with a whole, is to emulate a Roadrunner cartoon.”

      Some opponents do consistently conflate “a” with “the” as in “A purpose” with “The
      purpose”.

      “….purpose of a military conquest is to take control of foreign economies..”

      Some opponents also attempt to conflate the purposes of others with their
      “purposes”.

      Some opponents attempt to conflate conquest with transcendence, and
      transcendence with conquest.

      Some opponents attempt to conflate transcendence and military,and military with
      things that go bang.

      “… an artificial economic game that U.S. diplomacy can control, finance is able to
      achieve today what used to require bombing and loss of life by soldiers.”

      “opponents try to “turn back time”

      Some opponents are immersed in linear extrapolations of and in emulation of
      “history” including but not restricted to General Plan Ost.

      Some opponents have belief in “magic bullets”, prime agency and “fixes – quick or
      otherwise” in projection of lands of belief affording opportunities to others to render
      the opponents’ “strategies” wishes and “tactics” hopes.

      Some opponents are oblivious to cautions in analysis including but not restricted to –

      Do you think your opponents are as stupid as you are?

      By some the quality of strategy is not strained through lack of facility, but misrepresented as not being so, in belief of peerage including by, but not restricted to, RAND.

    • July 11, 2019 at 04:37

      It’s the King Midas in Reverse Rule: Do unto others what you would *not* have them do unto you.

  11. Jeff Harrison
    July 9, 2019 at 14:15

    The world as I see it, Patrick.
    The world is reducing its need for US dollars by trading in native currencies. The US is reducing it’s need for foreign financing by virtue of the USs tariff scheme which is really a tax on the American people since the importer, not the exporter, pays the tariff. Dropping the dollar as the lingua franca of the business world is going to be a whole lot more permanent than the tariff scheme.

    The Republicans are in charge and traditionally they are the less fiscally responsible party. US debt has been flat for several months @~$22.02T. So we only have to finance rollover of maturing debt and not new debt; plus a lot of the recent T-bond offerings have been for 10 year bonds. This doesn’t mean that there won’t be resistance to buying US debt that they’re not sure they’ll need at low interest rates. This is probably the real reason that the Fed is refusing to cut the discount rate. As we need to borrow more money from the market place than the market place is interested in lending, we’ll need to offer a higher interest rate to get borrowers to lend us more money and that will translate into higher interest rates at home and will drive up inflation. The real money maker though is the use of the currency for financial transactions. Every time there is a foreign transaction that is denominated in dollars, the US makes money because the dollars for the transaction must either be bought or borrowed for the transaction and we make money. China is moving in on this.

    The other kicker that Patrick mentions is the messaging system. The Russians and the Chinese both have rival ones and the EU is working on one. This is important because there was a German guy who was buying $60K worth of Havana cigars. His bank sent it with SWIFT, the US saw it, blocked the transaction and I think confiscated the guy’s $60K. The US is in the process of making itself a pariah.

    • evelync
      July 9, 2019 at 19:30

      “This is important because there was a German guy who was buying $60K worth of Havana cigars. His bank sent it with SWIFT, the US saw it, blocked the transaction and I think confiscated the guy’s $60K. The US is in the process of making itself a pariah.”

      hmmmmm……. it seems they have made themselves judge and jury
      and there’s no international court for this guy to appeal to?

    • Diam
      July 10, 2019 at 03:15

      The USA is a Monetarily sovereign Nation,it does NOT borrow. Congress is who issues all currency for payments and expenditures,and is the sole currency issuer. The USA does not require revenue to provision for itself.

  12. Truth first
    July 9, 2019 at 13:32

    “speeding the demise of U.S. empire.” This can’t come soon enough!!

  13. Robert Mayer
    July 9, 2019 at 13:28

    Thanks CN for running a significant piece by Patrick, and you sir for writing it. Also thank the reader base for comments…
    Perhaps I misunderstand privatization of Fed which by all accounts occurred 1913… if so however the true petro $$ context is that American cits & taxpayers would be on the hook for the econ consequence of Tmp Admin finan aggression… & that our gov spending borrowed funds creates auto self sanctions?
    I’ll review replies to this if anyone credibly denies this imagined phenomenon.
    Tnx

    • Diam
      July 10, 2019 at 03:17

      The federal reserve is a creature of Congress,there is no such thing as the Petro dollar.

      • Bruce Hitchcock
        July 10, 2019 at 20:40

        The fed is a little more federal than Fedex,publicly traded shares but who owns it.?Docs say it has been a parasite on our economy. Why not print our own money?Lincoln and Kennedy tried to .Also Hitler.Is it too late to audit and end the Fed?

  14. John V. Walsh
    July 9, 2019 at 13:14

    A superb article and should be widely read.

    BUT if this is only seen as the work of TheDonald, as some comments here do, that would be a profound mistake.
    One comment notes that as of 1999, the US had sanctions on 70 countries!! That may or may not be true, but sanctions were notoriously used on Iraq by Bush I and the Clintons, with Madeleine Albright coldly assessing that the death of 500,000 kids was “worth it” to weaken Saddam Hussein for Bush II to deliver the coup de grace.

    As opposition to bombs has grown, the Empire has come to rely ever more on murderous sanctions justified by an appeal to human rights.
    We have transitioned from bombing a village to save it – to starving a country to save it.

    TheDonald may be more blatant about all this – but he is not the first.

    • evelync
      July 9, 2019 at 14:46

      Thank you John V Walsh – I am 100% in agreement with your statement!

      The Donald is simply the last iteration of what’s been going on for far too long – under Reagan, Clinton, Obama and probably many more before them. Although Trump adds extreme narcissist, incompetent clown and con man to the rest…

      And you may agree that this dysfunction – including the dismantling of the New Deal – has led to the voter mistrust – certainly mistrust of Clinton in 2106 – to where some voters decided to roll the dice on Mr Trump…..
      (The same thing happened in the province of Quebec where voters tired of the Liberal Party corruption decided to gamble on a center right Party as I’ve been told….)

      In fact I recently heard an interview of a farmer in the midwest who was hurt by Trump’s sanctions, who said he was skeptical of Trump in 2016 but voted for him in case what he was promising was on the up and up.

      Thanks, again for your comment!!!!

    • Occupy on!
      July 9, 2019 at 15:06

      Ah, yes! And in this century alone, the Congress handed over its constitutional war powers to the the President after 9/11 (AUMF 2001) and allowed President Trump to hand over THAT power to the military … with virtually no howling from Democrats or Republicans alike. Some understanding long before this President brought about this Deep State utopian dream.

      • evelync
        July 9, 2019 at 17:52

        yessirreee, Occupy on! – a Congress bought and paid for by the MICIMATT whose majorities fall into line when another war looms into view or another banking deregulation scheme is pushed by all the usual suspects.

        Until elections are funded by the public – one dollar at a time and political candidates receive a designated amount of free air time to discuss policy positions we’re up a creek.

        Protesters in the halls of power at congressional committee meetings are dragged out forcefully as they courageously try to inform the public of what’s being done in our name. Angry expressions on the faces of the guys/gals with the gavels.

        Code Pink – one of the honorable group of protesters – gets dragged out for trying to hold their representatives accountable.

        Chelsea Manning gets hard time for daring to inform us of wrongdoing done with our tax dollars and in our name.

        Julian Assange gets hauled in front of a kangaroo court for daring to publish documents of wrongdoing done in our name and with our tax dollars.

        The likes of Hillary Clinton, Donald Trump and most elected officials honestly believe that Assange is a nuisance who must be gotten out of the way. These people are part of a sociopathic/psychopathic dimension operating in service of the MICIMATT.

        • Diam
          July 10, 2019 at 03:23

          Just so you know, the federal taxes that you pay are deleted upon receipt and never pay for anything.
          It’s known as the “death of the dollar” in operational monetary policy,and it’s how currency is deleted out of circulation, preventing inflation. There are about three more other reasons why federal taxes are collected,but using them for revenue is not one of them. Congress is who issues all currency for payments and expenditures once approved by appropriations by crediting accounts on spreadsheets via keystrokes on a computer,hence the term Fiat currency.

          • Bruce Hitchcock
            July 10, 2019 at 20:55

            Diam,Thank you. I thought taxes went to pay interest on the feds currency creation.How do they get paid?Congress?

    • July 10, 2019 at 08:33

      Mister Walsh, the first I heard of the power of sanctions was those imposed on Iraq in the 90’s. It is mind boggling to realize how powerful the SWIFT system was when even medicines going to Iraq had to pass through the system. Thousand died in Iraq for want of life saving materials because the US controlled UN 660 committee had to approve imports. . Things like ambulances were held up because they might assist the Iraq military in some way. Destroying the nation’s infrastructure, then delaying materials to rebuild it, was one of the great crimes of the twentieth century. It led to the incredibly callous statement by Albright that 500 thousand deaths were worth it.

  15. evelync
    July 9, 2019 at 12:19

    How ironic that the Donald has brought his crooked way of pushing people around in his personal business into the White House, now using the unethical tools of U.S. power such as Sanctions to try to indiscriminately push around any country he sees standing in his way. Trying to create the illusion for his base that other countries must and will bow to his will…..

    The idiot may have, finally (in some sort of bizarro death wish?), bitten off more than he can chew and he may find himself politically choking on the oversized bone he has in his mouth if this unravels quickly enough……

    Couldn’t happen to a nicer guy……

    The progress of the blowback will be fascinating to watch, especially if and how it intersects with 2020 election….

    How disappointing to consider how casually U.S. leaders employed “sanctions” and “embargoes” against other countries because they were too unimaginative and full of themselves to properly negotiate with perceived enemies or too captivated by the illusion of super power to use more civilized methods of foreign policy:
    “It was imposing sanctions against forty different nations as of 1999” see: “Embargoes and Sanctions – The effectiveness of u.s. sanctions in historical contextSanctions?” americanforeignrelations dot com

    International relationships – if they mean anything at all – should be based on trust and good will.
    Economist Ricardo, I think, pointed out that everyone wins from fairly structured international trade.
    How will Trump and the other official U.S. hegemonists feel when those countries who have been made to feel as though they are under our heel fully develop these institutions that Mr. Lawrence describes that can finally push back…..
    The sanctions and embargoes will become unenforceable and the U.S. will have to behave rationally to get along if we haven’t first blown up the world.

  16. old geezer
    July 9, 2019 at 11:35

    mr. Lawrence presents an astute summary.

    how ironic is it that creating a system of world trade, helping the former communist bloc and china to develop their economies for the good of their people and peace for mankind … didn’t work.

    china now has an emperor for life. sili con valley has shown them how to implement surveillance that eric blair would be astounded by.

    the russians have a how many party state ? it would seem the vodka party is mostly still in charge. but the american imports of fentanyl from china seems to be much more effective at killing than fermented potatoes.

    not to worry though, here at home drag queens start dragging at 11. is that progressive or what.

    but in the mean time remember, orange man bad , america bad

  17. July 9, 2019 at 11:33

    Someone asked about the O Society website in the comment section of another essay here at ConsortiumNews. Will address it here too. The O Society site is a non-profit. No advertising. No nothing commercial marketing related. This makes it what’s called a news aggregator in geek speak, such as Information Clearinghouse. There are also original essays at O Society, which makes it what’s called a content generator in geek speak.

    The bottom line is there is no money involved in the O Society site. It doesn’t even do Facebook and Twitter because of the commercialism there. Its purpose is to spread information freely. To amplify the “good” signal because our problem is there’s so much crap being broadcast, the news channels have a crummy signal : noise ratio as a general observation. Obviously, CN is an exception to the general rule because it spreads “good” information increases the signal. So what happens is often the CN articles get amplified thus with a new cartoon or other images to attract the masses to reading it:

    http://osociety.org/2019/07/09/weaponizing-the-dollar/

    Thank you to Patrick Lawrence and everyone else who does their best to find the truth and increase the signal. Please feel free to criticize constructively. Doing this “out of the goodness of my heart,” so to speak. Not for cash & prizes. Thanks. Carry on…

    http://osociety.org/2019/07/09/weaponizing-the-dollar/

    • ML
      July 9, 2019 at 16:38

      I’ve always liked your posts and links, O. You’re a good egg and the commenter the other day who dissed you should be ashamed. Keep up the good work! You make me laugh too. I like to laugh at this crazy world of ours.

      • O Society
        July 10, 2019 at 14:49

        Thanks for the kind words. Alas, laughter is about the only superpower We the People can still afford to cope.

    • Diam
      July 10, 2019 at 03:30

      It would serve you well to learn Heterodox Macroeconomics specifically Modern Monetary Theory,so articles like this will stop spreading misinformation adding to the angst and desperation of “we the people” and emboldening the corrupt politicians that preach artificial scarcity and needless Austerity to trick people into accepting it unquestionably.

    • July 11, 2019 at 04:15

      “There is no alternative.”
      ~ Margaret Thatcher

      https://osociety.org/2019/02/20/what-is-modern-monetary-theory-mmt/

  18. Eddie
    July 9, 2019 at 11:24

    The seat of the pants decision-making process that the US employs in world interactions has resulted in significantly negative repercussions for decades. So commonplace are these disasters that the CIA invented the word “blowback” to described them.

    The US could overcompensate these misjudgments when it was the master of the planet. But as it continues its slide into a third-rate world power, its ability to paper over its short-sighted decisions becomes weaker.

    The US has mismanaged whatever power it garnered in the post-World War II years. Its leaders’ arrogance and stupidity have accelerated since the Bush/Chaney/Obama/Clinton years beginning in 2000, culminating with Donald Trump. Unless and until the working class in the US take to the streets to demand the end of the capitalist state that is running amok, things will continue to spiral out of control.

    • Diam
      July 10, 2019 at 03:33

      The scourge of Neoliberalism is at fault,and if infecting and destroying everything except for the unbridled greed of the rich.

  19. Vera Gottlieb
    July 9, 2019 at 11:10

    Personally I would welcome the demise of the US. Waking up every morning and finding out which new shenanigans the US is up to – it is more, much more, than just irritating – never sure from which side I am being hit next.

  20. KiwiAntz
    July 9, 2019 at 10:39

    Trump’s stupidity, narcissistic hubris & vain ignorance of weaponising the US Dollar & the Swift Banking system to bully other Nations into submission is backfiring bigtime?? Other Countries have had a gutsful of this American Global tyrant, who for years has used its exhorbitant privilege of having the Worlds reserve currency to finance endless Wars & to fund its Bankrupt Govt & Consumerism by endless QE & Counterfeit money printing? What a wonderful con job that Nixon setup by detaching the US Dollar from a Gold Standard & substituting Bretton Woods for the Petrodollar System? It has enabled America to live beyond its means by putting it all on the Credit Card without any Credit limits or Payment due dates or paying any Interest? It receives manufactured products & buys real assets for nothing & gives others worthless, printed paper currency as payment created out of thin air & a printing press! What a great deal? However the gig is now over as everyone has woken up to this scam & Trump has accelerated the Global efforts & co-ordination, led by Russia & China & others, to transition away from the US Dollar as the Worlds Reserve Currency! The Writing is truly on the Wall, when you see Countries dumping US Treasuries & reducing their dollar holdings & especially those Nations buying up massive amounts of Gold in preparation for the Dollars imminent collapse, then there’s little doubt that the end of the Dollar & the waning American Empire is close? And it can’t come soon enough for those under the heel of this tyrannical US bully who has used the Dollar to terrorise & economically cripple others out of pure spite & American vindictiveness, so it’s good riddance, it hasn’t been nice knowing you & hopefully the American Empire & its corrupt Dollar Hegemony goes quietly into that good nite, for ever!

  21. July 9, 2019 at 09:54

    Can the ‘American empire’ pass into history without world war three?
    It is the first time – in the nuclear age – that a great empire has lost it pre-eminence. One could point to the USSR, but Moscow lost its buffer zone but ultimately held its sovereignty, and never had the economic might of America. This is a fascinating article on de-dollarization. Historically it is hard to believe that US hegemony can be replaced with a nuclear war, for the pattern of history shows that great empires eventually get the war they seek to avoid, but are deluded to the reality of their fate. Washington could blindly drag us all to Armageddon.
    https://www.ghostsofhistory.wordpress.com/

  22. AnneR
    July 9, 2019 at 09:21

    Mr Lawrence, thank you for this piece. You seem – the tone of the article – to regret the oncoming decline in the power of the dollar and thus of the US to dictate to other countries how they should behave, what sort of political structure they should have, how they should bend over backwards. Frankly, from this person’s pov it, the decline, can’t come soon enough.

    Economic sanctions – both primary and secondary – *are* warfare, *are* inhumane, *are* obscene and are duplicitous giving, as they appear to do, the US govt and its “allies” (generally the EU and the other four “eyes”) a “humanitarian” cover, or at least a “non-lethal” cover to what are decidedly lethal, inhumane, atrocious acts. Tens, hundreds of thousands die from want of necessary foodstuffs, medical necessities, many more in a sanctioned population are weakened, made vulnerable to infectious diseases and so on. Especially, as happens all too often, these sanctions continue on for years.

    Indeed, one might suggest that it is the US that is in dire need of a taste of its own medicine – and none more so within it than the top twenty percenters and their friends and lackeys in DC.

    DT has worsened the US abuse of its dollar hegemony, but it has been a favored weapon of just about every admin over the past 70+ years.

    No single country, nation state should have that sort of power. None.

    • Fred Mrozek
      July 9, 2019 at 11:32

      Amen.

    • Rob
      July 9, 2019 at 20:11

      Having read Patrick Lawrence for years, I do not believe that he will bemoan the decline of U.S. worldwide hegemony.

  23. TomG
    July 9, 2019 at 08:40

    I just finished watching the latest season of “Madame Secretary” on Netflix. Clearly, its producers (and those of “Designated Survivor”) have little more imagination than Trump or Obama or Pelosi. Anything nefarious happens–must be Russia. Anyone is a bad actor–must impose sanctions. Anyone threatens–must bomb something to get them into submission. It’s like the standard playbook only with likable people in a premise where they sell themselves as independent progressives. If countries have half a sense of how little of this actually has to do with the current idiot in the White House, they should run from the dollar as fast as they can. Our wings need clipped badly and we need to wake up.

    • Diam
      July 10, 2019 at 03:37

      Then wake up to macroeconomic reality and #LearnMMT, the knowledge of #MMT will turn this neoliberal fascism around

  24. Sally Snyder
    July 9, 2019 at 08:10

    Here is an article that looks at how frequently Washington attempts to change what it deems “unacceptable behaviour” by using economic sanctions:

    http://viableopposition.blogspot.com/2019/01/economic-sanctions-how-washington.html

    One would think that Washington would have concluded that economic sanctions have not necessarily proven to be an effective means of getting its way in the world and, in fact, may have punished domestic businesses more than they punished foreign adversaries.

  25. OlyaPola
    July 9, 2019 at 07:46

    …and to conflate an aspect with a whole, is to emulate a Roadrunner cartoon.

    https://journal-neo.org/2019/07/08/election-interference-vs-rand-corporation-full-spectrum-assault-on-russia/

    • rosemerry
      July 9, 2019 at 16:34

      Thanks for an excellent link.

      • OlyaPola
        July 10, 2019 at 04:28

        Perhaps the following wil be of interest and some others through this portal if they enjoy the same benefits as Mr. Lazarus.

        A contribution, albeit understandably restricted through reliance on an assay of projection of social relations in some but not all societies – although attempts are made to avoid this.

        https://www.globalresearch.ca/the-limited-mind-psychology-as-a-means-to-understanding-conflict-why-fear-is-driving-humanity/5683069

        The opponents’ social relations are facilitated by many components including but not restricted to the conflation of “a” with “the” underpinning subliminal nostra that “there is no alternative”.

        Fiat currencies, reserve currencies and their interactions are amongst the facilitators of social relations.

        However their removal are not sufficient in themselves to end such social relations.

        Consequently the social relations presently self-described as “The United States of America” will not be transcended through linear strategies to remove some components facilitating these social relations, but through a lateral process of transcending all of the components which facilitate these social relations.

        This lateral process is and will likely continue to be aided by opponents’ quest to limit change within a linear frame as in:

        “As the Trump administration weaponizes the dollar in defense of American hegemony, it is prompting many other nations to find alternatives to the U.S. currency as the default medium of exchange. “

        an additional accelerant of which will continue to be some opponents’ beliefs that others share the same purpose of “hegemony” as in “At stake is the longevity of America’s global preeminence. “ rather than “At stake are the social relations presently self-described as The United States of America” which some opponents also do perceive, but as is often their won’t, seek to limit such benefits to themselves and their associates.

        • OlyaPola
          July 11, 2019 at 08:59

          “However their removal are not sufficient in themselves to end such social relations.”

          Another symptom and component of the social relations illustrated in the petri-dish of the opponents’ culture which requires transcendence.

          https://www.youtube.com/watch?v=iiE3H4d5FOk

        • DW Bartoo
          July 11, 2019 at 17:32

          Thank you for that link, OlyaPola.

          Much appreciated.

          DW

          • OlyaPola
            July 12, 2019 at 04:37

            In illustration of Mr. Lenin’s observation that capitalists will sell you a rope with which to hang them.

            Mr. Lenin like present opponents often conflated “a” with “the” as was “custom and practice” in the Bolshevik project – one of the benefits of “democratic centralism”, thereby encouraging motivation and opportunities facilitating the transcendence of the social relations self-described/branded at different moments in trajectories as; “The Communist Party of the Soviet Union”, “The Soviet Union”, and even “fully existing socialism” requiring glasnost and perestroika in the hope of facilitating its continuation in modified form, similarly like some of the present opponents.

            https://www.rt.com/business/463972-trump-cryptocurrency-real-dollar/

      • July 11, 2019 at 04:41

        “Quack”
        ~ the Duck

  26. OlyaPola
    July 9, 2019 at 07:28

    “It still accounts for roughly two-thirds of global foreign exchange reserves, according to the International Monetary Fund.”

    First loss is always cheapest, and investments can be amortised over extended periods.

  27. July 9, 2019 at 06:06

    The purpose of a military conquest is to take control of foreign economies, to take control of their land and impose tribute. The genius of the World Bank was to recognize that it’s not necessary to occupy a country in order to impose tribute, or to take over its industry, agriculture and land. Instead of bullets, it uses financial maneuvering.

    As long as other countries play an artificial economic game that U.S. diplomacy can control, finance is able to achieve today what used to require bombing and loss of life by soldiers.

    https://osociety.org/2019/07/08/de-dollarizing-the-american-financial-empire-imf-and-world-bank-are-partners-in-backwardness/

    • AnneR
      July 9, 2019 at 09:26

      The loss of life of the populations of targeted countries, however, can and often does go on. But most in the western nations that support the sanctions against “lesser” countries don’t give a flying f… . They have their Albrights to reassure them that however many of those “other” peoples die “over there” – it’s all worth it, *for us.*

    • July 11, 2019 at 04:20

      Anne, did you ever get the feeling Albrights may not be the brightest color in the rainbow?

  28. Allan P.-E. Tolentino
    July 9, 2019 at 03:31

    “the end of dollar hegemony has commonly been considered a far-off development unlikely to occur in the lifetime of anyone now living. This is no longer likely to be so.”

    “It remains likely that a serious challenge to dollar hegemony is still a matter of a decade or more in the future.”

    Hedging one’s bets is a cautious move in reading future outcomes. Nevertheless US becoming a power has-been may come much sooner than anyone expects.

    Countries now at the receiving end of US economic/financial sanctions and military violence will quickly realize their existential sovereignty to trade goods with other sanctioned countries using their own currencies. BRICS countries are acutely aware of this. Hence the creation of their own trading/financial systems outside the US dollar. The more violent the US response, the more inspired affected countries will pursue successfully their own ways. Their survival is at stake. Failure is not an option.

    It seems hubris disables US ability to see that its power misuse digs its own grave.

    • OlyaPola
      July 9, 2019 at 09:57

      “It seems hubris disables US ability to see that its power misuse digs its own grave.”

      Many opponents conflate a symptom with a cause through ignorance of dialectics and lateral processes, partly as a function of division of labour which is simultaneously a function of – What is the “United States of America” and how is it facilitated?

      This iterative process is also aided by the enmazement in amazement of prior iterations and conformances.

      https://www.youtube.com/watch?v=KP6LBYoqBl0

    • Guy
      July 9, 2019 at 12:14

      @ Allan P.-E.Tolentino
      So very well said .They are very busy digging their own grave .It is strange that no one in the US administration recognizes this .
      The more they bully and threaten the more they alienate who their friends are or were. In all honesty ,I don’t really believe that the US has any real friends .Just hangers on and parasitical entities .If the demise of the US means eventual peace in the world ,then IMHO , it could not happen too soon.

    • July 11, 2019 at 04:30

      Are you a Gravedigger fan? I’m a Bigfoot man m’self!

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