Senator warns of threat to dollar caused by US
Washington has jeopardized the greenback’s status as the world’s reserve currency, Republican Mike Lee has said
The White House has created the first real threat to the dollar and its status as the global reserve currency, US Republican Senator Mike Lee has said, in an interview with journalist and political commenter Tucker Carlson.
In a two-hour interview published by the former Fox News anchor on his YouTube channel on Tuesday, Lee said that US policies of unilateral sanctions are delegitimizing the rules-based international order that Washington claims to protect.
According to the senator, the US authorities have succeeded in uniting Russia, China and Iran, which are significant global economic players, and have to deal with a powerful incentive to get rid of dollars, primarily in energy transactions.
“And, in the meantime, we have really presented the first major threat that you and I have seen in our lifetimes to the US dollar as the world’s reserve currency,” Lee said, stressing that “twenty years ago all oil transactions, no matter where you are in the world,” were conducted in dollars.
“It’s starting to not be the case anymore,” he said, warning that this was “very chilling,” because strength of the greenback and its widespread use was what the entire US benefited from to a very significant extent.
The global trend toward countries using their respective national currencies in trade instead of the US dollar gained significant momentum after Russia, one of the world’s top oil producers and exporters, was cut off from the Western financial system and had its foreign reserves frozen in 2022.
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“So, in the name of protecting the rules based on international order, we’ve weakened it, in the name of maintaining economic and military security for the US, we have made ourselves vulnerable,” Lee concluded.
The freezing of Russian sovereign assets in February 2022 was an unprecedented move. A number of experts in the West, including US Treasury Secretary Janet Yellen, have cautioned against attempting to confiscate these funds, highlighting that this could undermine the dollar, the euro, and the entire global financial system.