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The war began with a press release.
Dated May 13, 2010, it came from the Central Bank of the Russian Federation and said the Russian government “hereby announces the following facilities and processes which are in place and available for counterparty inquiry immediately.”
Sounds innocent enough, but savvy investment experts got the message: It was the opening salvo in a sneak economic attack on the U.S. dollar.
The Russian Central Bank was creating a new global currency, the “gold reserve dollar,” which would be issued by a financial agent in London and backed by tons of Russian gold shipped to secure vaults in Switzerland, the press release said.
The goal: to drive the value of the U.S. dollar down by 75 percent overnight and wreak havoc on the struggling American economy.
Thankfully, the press release was a fake. It was written by economic intelligence analyst James Rickards and presented on March 24 to the Unrestricted Warfare Symposium at the Johns Hopkins University Applied Physics Laboratory.
But Rickards’ point was all too real: The American dollar is vulnerable as never before to attack from hostile foreign governments. And the consequences of such an attack could be devastating.
“The result is that the U.S. would reimport the hyperinflation which it has been happily exporting the past several years,” Rickards wrote. “U.S. interest rates would skyrocket to levels last seen in the Civil War, in order to preserve some value in new dollar investments.”
In his paper, Rickards recommended that U.S. intelligence pay close attention to the gold supplies and financial maneuverings of rival powers, not just to missile tests and troop movements.
Fighting off a possible attack on the dollar could be costly; the best way to keep investors interested in the dollar is to raise interest rates, paying them more for putting money into Treasuries. But the Federal Reserve has dropped interest rates to near zero in a bold attempt to jump-start the ailing U.S. economy, so while a hike could preserve the dollar, it could also damage the frail economy.
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Dated May 13, 2010, it came from the Central Bank of the Russian Federation and said the Russian government “hereby announces the following facilities and processes which are in place and available for counterparty inquiry immediately.”
Sounds innocent enough, but savvy investment experts got the message: It was the opening salvo in a sneak economic attack on the U.S. dollar.
The Russian Central Bank was creating a new global currency, the “gold reserve dollar,” which would be issued by a financial agent in London and backed by tons of Russian gold shipped to secure vaults in Switzerland, the press release said.
The goal: to drive the value of the U.S. dollar down by 75 percent overnight and wreak havoc on the struggling American economy.
Thankfully, the press release was a fake. It was written by economic intelligence analyst James Rickards and presented on March 24 to the Unrestricted Warfare Symposium at the Johns Hopkins University Applied Physics Laboratory.
But Rickards’ point was all too real: The American dollar is vulnerable as never before to attack from hostile foreign governments. And the consequences of such an attack could be devastating.
“The result is that the U.S. would reimport the hyperinflation which it has been happily exporting the past several years,” Rickards wrote. “U.S. interest rates would skyrocket to levels last seen in the Civil War, in order to preserve some value in new dollar investments.”
In his paper, Rickards recommended that U.S. intelligence pay close attention to the gold supplies and financial maneuverings of rival powers, not just to missile tests and troop movements.
Fighting off a possible attack on the dollar could be costly; the best way to keep investors interested in the dollar is to raise interest rates, paying them more for putting money into Treasuries. But the Federal Reserve has dropped interest rates to near zero in a bold attempt to jump-start the ailing U.S. economy, so while a hike could preserve the dollar, it could also damage the frail economy.
... [continued]