April 10, 2024 (EIRNS)—"The very act of seizing Russian assets would pose dangers to the U.S. economy, because other countries, not just Russia, would view it as an act of brigandage,” warns Christopher Caldwell in a New York Times opinion essay headlined “Everyone Wants to Seize Russia’s Money. It’s a Terrible Idea.”
House Speaker Mike Johnson has made moves toward seizing frozen Russian assets through the REPO Act. Although only a few billion of Russia’s foreign reserves are in the United States, such a decision by the U.S. might prompt a similar seizure of the hundreds of billions of dollars worth of Russian funds frozen in Europe.
But stealing this money, “could weaken the dollar’s status as the main global reserve currency.”
“The dollar is probably the most valuable strategic asset the United States has. We exercise a degree of control over the world economy because the world, for trading purposes, allows its transactions to pass through our currency. This leaves us with cheaper transaction costs and lighter financial burdens. It gives us leeway to run up debt ($34 trillion of it so far) that other countries lack,” he writes.
If Russia, China, and other countries decided that dollar assets are vulnerable and the currency could no longer be trusted, “we would feel the pain of that $34 trillion debt in a way that we don’t now.”
