Donald Trump has signed into law legislation to increase sanctions on Iran, North Korea, and Russia. It was passed overwhelmingly by the U.S. Congress. As Ron Paul likes to point out, sanctions are virtually an act of war.
This legislation is especially egregious. Iran has abided by its agreement on nuclear weapons, not that it should have been bound by such a thing in the first place. This is just more bullying of a country that is no threat to Americans. If anything, Iran wants ISIS destroyed, but it seems the U.S. government would prefer to fund and support ISIS and overthrow Assad in Syria.
The sanctions against Russia are also horrible, as relations are already bad. This is due to an alliance between the war hawk Republicans (neoconservatives) and the left in opposing Trump. It is helped along by the leftist media, who would prefer to risk war with a nuclear power than see Trump succeed at something – in this case, peace with Russia.
The crazy thing about this legislation is that Trump has spoken against it, while at the same time actually signing it. He says he did it for “national unity”. But this isn’t national unity. It is political unity in Washington DC. It goes against everything that he campaigned for prior to his election as president. The reason Trump was elected was to stop political unity and to bring us some political disunity.
Trump also correctly pointed out the flaw of hampering the executive branch. Under this new legislation, the president cannot get rid of the sanctions without congressional approval. In other words, he has no room to do what he is supposedly good at: negotiate.
If we are lucky enough to avoid another major war, this new round of sanctions is only going to contribute to the demise of the U.S. dollar as the world’s reserve currency. Americans will no longer be subsidized by foreigners, but I think it will be good for Americans in the long run. It will put a more severe limit on the federal deficits.
Russia now has to avoid dealing with the dollar. It does not have to use the dollar as a middleman. Russian officials continue to accumulate gold reserves, and there is also speculation that they are looking more into cryptocurrencies.
With this new round of sanctions, even Western Europe is not happy. The U.S. government is managing to make virtually the whole world mad in some way or another. The major powers are realizing that they do not need to use the dollar as a middleman for trade. This doesn’t mean they will stop trading with the United States. But if Russia and China are trading (whether it is between governments or businesses), there is little reason to use the dollar any longer.
For this reason, I believe the U.S. dollar will lose its status as the world’s reserve currency. It will not be replaced by anything, or at least not another currency. The only realistic replacement is gold. These new sanctions are not good for world peace or for world trade, but the price of gold in terms of U.S. dollars will likely go higher as a result.