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Countries may want to diversify away from the U.S. dollar: Think tank


According to the Institute for the Analysis of Global Security, the U.S. has been “extremely trigger happy” with its stinging economic actions. Central banks might decide to diversify their foreign reserve portfolios instead of heavily relying on the dollar.

Gal Luft, a Washington-based thinktank said that “central banks are starting to ask questions” and added that they’re wondering if their reliance on dollar and “putting all of their eggs in the same basket” are smart ideas.

He said that the United States had extended its reach and was extremely trigger-happy regarding economic sanctions.

CNBC reached out to the White House for comments but they did not reply.

Luft claimed that in the past weeks, the U.S. had taken unheard-of and unacceptable steps such as effectively freezing Russia’s central bank reserves disconnecting Russia from the interbank messaging system, SWIFT.

Overall, the picture isn’t good. We are experiencing a combination of heart attacks and heart attacks.

Gal Luft

Co-director of the Institute for the Analysis of Global Security

One in ten of the 10 world’s countries is subject to some type U.S. sanction, he said.

Luft explained that this has had a cumulative effect, and we are seeing the dollar lessening its role in portfolios and central bank roles.

His comments come after a Wall Street Journal reportSaudi Arabia and China are in rapid talks to make it possible for them to trade yuan, instead of dollars, for the oil Beijing uses.

He said that oil is usually priced in U.S. Dollars, which has enabled Washington to have “huge deficits”. “Street Signs Asia”Tomorrow is Monday.

Luft stated that sanctions make it difficult for governments to leave the U.S. Dollar.

He stated that the American political elite lacks awareness about the implications of its actions.

He described it as “a group of children running about with guns, shooting everywhere,” and said that they don’t realize what they are actually doing.

You are simultaneously sanctioning left and right. You want other countries to purchase your Treasurys, and help you finance your debt. He said that this was not sustainable.

In energy, a ‘heart attack’

Luft also discussed uncertainty in the global energy market with senior advisors to the U.S Energy Security Council.

He said that the overall picture was not positive because the heart attacks on top of heart attacks we are experiencing today, pointed out the Covid pandemic, Russia-Ukraine conflict, and other potential dangers, adding, “very, very nasty.”

The combination of both is truly amazing. [a]He said, “Double whammy!”

Over the last two years oil prices fluctuated greatly, plummeting during the pandemic and rising when Russia invaded Ukraine.

Luft stated that there has been a global rebalancing of the energy, financial, and geopolitical systems and the rise of a new world order.

He said, “The transition to the new world order is not always a pleasant one.” He said, “It is always painful. But that’s how the world can change from one world order into another.”