US Declares Financial War Using Powerful Sanctions

This blog tries to monitor events that might impact the global monetary system and even lead to significant change to that system. Not much has happened in that regard for some time as we waited to see how Trump Administration policies might impact things. 

Up until now, nothing the Administration has done seemed likely to disrupt the US dollar based monetary system that has run the world for a long time now. Today something happened that might be different. 

Trump admin unveils Iran sanctions plan, says China not exempt

Here is a key quote from the article linked above:

“Any entity that facilitates money laundering on behalf of Iran will be removed from the U.S. dollar system,” he said. “The clock just started ticking.”

We have covered just about everything related to this topic over the last decade here on this blog. One thing we have monitored is whether or not the monetary system is evolving into a multi polar system of basically East vs. West with the US leading the West and the BRICS emerging as an alternative to the US based dollar system. The US has used the global reserve currency status of the US dollar to wield enormous power and clearly has no intention of losing that power as seen in this announcement. 

This announcement today is for sure something everyone needs to watch carefully. We need to see how US allies and enemies (both of whom rely on the US dollar based monetary system) react to the announcement. We need to see if the US can actually enforce this policy if nations or financial institutions try to bypass it. We need to see if this policy can be bypassed by adversaries using gold to settle trade balances if they get shut out from using US dollar denominated funds. 

I view this announcement by the US as equivalent to a threat to launching a tactical nuclear weapon if it were a kinetic action in a shooting war. No one can be sure what this kind of move will lead to in terms of either compliance or resistance from enemies. If things turn more combative, this is the kind of thing that can destabilize the entire monetary system which is what we watch for here. So readers are advised to monitor this very closely as events unfold in the next few weeks and months.