US Sanctions on Russia May Sink the Dollar
Sunday August 10, 2014
only escalate an already tense situation, ultimately harming the US economy itself. While the effect of sanctions on the dollar may not be appreciated in the short term, in the long run these sanctions are just another step toward the dollar's eventual demise as the world's reserve currency.Not only is the US sanctioning Russian banks and companies, but it also is trying to strong-arm European banks into enacting harsh sanctions against Russia as well. Given the amount of business that European banks do with Russia, European sanctions could hurt Europe at least as much as Russia. At the same time the US expects cooperation from European banks, it is also prosecuting those same banks and fining them billions of dollars for violating existing US sanctions. It is not difficult to imagine that European banks will increasingly become fed up with having to act as the US government's unpaid policemen, while having to pay billions of dollars in fines every time they engage in business that Washington doesn't like.
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Russia, this time targeting financial, arms, and energy sectors. The European Union, as it has done each time, quickly followed suit.