(Mises)—The US government is aghast that there is a new grouping of nations that seeks to form an alternative to the US trade bloc and trade settlement system that uses the dollar. These nations have been driven to this extreme, time-consuming, and difficult project by clueless US leaders who have imposed sanctions on Russian assets (literally stealing them) and have denied Russia and other nations from using the SWIFT messaging system for trade settlement.
In this way, the US hopes to preserve the dollar’s premier status as the world’s reserve currency and its world leadership based upon the dollar and its military might. I have a better, cheaper, and more peaceful way to accomplish these US goals (i.e., remove every incentive to leave). It’s as simple as that. At a minimum that means preserving the purchasing power of the dollar and ending the policy of confiscating the assets of other nations, even those with whom the US has serious disputes. In other words, end coercion and begin real world leadership based on trust and fair dealing.
This will be a tall task, because what nation today would believe in America’s honesty, integrity, and commitment to international law? Nevertheless, it is the only way that the American-led West can find its place in a new world. There is a new world coming and the US must be a part of it if it wishes to prosper well into the future and not just through the current election cycle. Here’s a short list of actions that the US should consider adopting:
- Return all stolen assets to Russia and other nations.
- End blackballing Russia and other nations from using the SWIFT trade messaging system.
- Turn the ownership and running of SWIFT to neutral hands, perhaps the Swiss or some combination of nations that cannot be sanctioned by America.
- Stop inflating the dollar, which of course is the main cause of its loss of purchasing power, in order to balance an out-of-control budget.
- Return all gold held in American vaults (the New York Fed/Fort Knox) to its rightful owners as quickly as possible.
- Place the dollar on a true gold standard by shipping American gold to neutral hands where it can be exchanged on demand for dollars. In other words, make the dollar “as good as gold.” (This is the most difficult and contentious action, but it is the only way that the world will accept dollars in the future when there is an alternative through membership in BRICS.)
American attempts to preserve its leadership status in the world will fail unless it enacts reforms such as these, which really are nothing more than behaving in a legal and honorable way. What American would not desire this? But who will believe that America will honor its commitments for the long term?
That is why the SWIFT messaging system and its gold reserve must be placed in neutral hands abroad. We have destroyed our reputation and this is the price we must pay. Otherwise, we will watch one former ally after another slip away to join BRICS, which is certain to adopt protective measures for its participants so that no one nation, no matter how large and powerful, can game the system for its own unearned advantage.
Real leadership is bestowed upon leaders by willing followers, not taken or preserved at the point of a gun.
