The Almighty Dollar

2/14/24

We are the leader of the free world because of one thing, the dollar. Commerce and all the goods and services that go with it revolve around using the dollar as a vehicle for transactions. The dollar’s strength is based solely on one thing, the rule of law. That is, if you have your money parked here in the USA in dollars, you have laws that protect that money from being purloined. It is the reason sovereignty funds from even our adversaries are parked here. They know they can get them when they want and are protected while they are here. Evidence the return of $6 billion of Iran’s money to them through Qatar.

Unfortunately, our rule of law is crumbling right before our eyes. Starting with a compromised President who continues to lie about his involvement with business deals involving our adversaries, cabinet members ignoring federal laws regarding immigration, and the use of government agencies to bring charges on flimsy bases. In this chaos a growing concern causes others to begin to prepare for a new means of securing their ability to do business; enter BRICS.

Russia, shunned from the G7, took their ball and started gathering others who see us as declining. They include, Brazil, India, China and now South Africa. China is keen to replace the dollar as the world’s means of transacting business and has already insisted on paying for its oil imports from Russia and Iran in yuan. As China is wont to do, they will flex their economic power by insisting others begin to pay them in yuan replacing dollar reserves with their currency.

Adding to the geopolitical maneuvers is our own folly of deficit spending that is so out of control, even Democrats are talking about capping spending. As a debtor nation with a lowered bond rating, the cost of printing money goes well beyond internal inflation. It exposes us to economic and even physical harm. Those that hold our debt can stop buying it or insist on even higher terms (interest). Our inability to arrest the growth in our debt will exacerbate the move from productive spending to mere interest payments. First to go will be guns but make no mistake, its butter after that and that is when the rule of law will come under its most difficult stress.

We must reassert that laws are to be followed in every instance. They must be applied equally as justice is blind to other tertiary issues. We must honor our obligations at every turn not just because it is right, but because our very position in the world depends on it. It all comes down to how well we manage the reality of the US being the safest harbor for the world’s wealth. Long Live the almighty dollar.