In this week’s episode of the Money Metals Midweek Memo, host Mike Maharrey went into a deep discussion on the weaponization of the U.S. dollar, the global response to financial sanctions, and the ongoing trend of de-dollarization.
Maharrey revisited a 2019 appearance on RT, where he predicted that the U.S. and its Western allies would leverage the SWIFT payment system as a foreign policy tool in the face of naysayers and so-called fact checkers at the time. That prediction has since come true, with major ramifications for the global financial system.
SWIFT as a Foreign Policy Weapon
SWIFT, the Society for Worldwide Interbank Financial Telecommunication, serves as the backbone of the international financial messaging system, facilitating cross-border payments. Maharrey explained how the U.S. has wielded its influence over SWIFT to enforce economic sanctions.
- 2014: The Obama administration cut several Russian financial institutions off from SWIFT following the Ukraine-Crimea conflict.
- 2017: Treasury Secretary Steven Mnuchin threatened to lock China out of the international dollar system unless it sanctioned North Korea.
- 2022: Following Russia’s invasion of Ukraine, the U.S. and its allies cut off Russian banks from SWIFT and froze Russian assets.
While the effectiveness of such policies is debatable, Maharrey emphasized their unintended consequences—prompting countries to seek alternatives to the U.S. dollar.
The Acceleration of De-Dollarization
The exclusion of Russia from SWIFT and threats to liquidate its dollar-denominated assets have led other nations to reduce their dependence on the greenback. The process of de-dollarization, where countries minimize their exposure to the U.S. dollar, has gained momentum.
- Emerging Markets Shift Reserves: Many emerging economies are diversifying their reserves by accumulating gold instead of dollars.
- Central Bank Gold Purchases: Over the past three years, central banks have added 1,000+ tons of gold annually to their reserves—more than doubling the yearly average of 473 tons from 2010-2021.
- Declining Dollar Reserves: Since 2002, the percentage of global reserves held in U.S. dollars has declined by 14%, a trend that has accelerated post-2022.
Bob Minter of Aberdeen Standard Investments highlighted that countries are strategically pivoting away from the dollar, seeking more economic autonomy.
BRICS and the Rise of a Multipolar Financial System
The BRICS bloc—comprised of Brazil, Russia, India, China, and South Africa—has expanded to include Egypt, the UAE, Iran, and Ethiopia, with Saudi Arabia also invited to join.
- Economic Clout: The expanded BRICS nations represent 3.5 billion people, control 28% of the global economy ($28.5 trillion), and account for 42% of global crude oil production.
- Alternative Payment Systems: BRICS members are working on alternative financial structures, such as BRICS Pay, a competitor to SWIFT, and trade mechanisms that bypass the dollar.
While BRICS is not yet a direct challenge to Western financial dominance, it is steadily reducing global reliance on the U.S. dollar, contributing to the shift toward a multipolar financial order.
Implications for the U.S. Economy
Maharrey warned that even a modest reduction in global demand for dollars could have severe economic consequences for the U.S.
- Dollar Glut and Inflation: Reduced global demand for U.S. debt would mean higher borrowing costs and a weaker dollar, leading to domestic inflation.
- U.S. Fiscal Policy: The U.S. depends on dollar hegemony to finance its debt-heavy economy. If demand for U.S. bonds declines, the Federal Reserve will be forced to monetize more debt, worsening inflation.
- Declining Purchasing Power: As the dollar loses its global dominance, Americans will feel the impact through rising import costs and decreasing purchasing power.
VanEck analysts Imaru Casanova and Joe Foster noted that the U.S. is already experiencing an erosion of confidence in the dollar, which they expect to drive gold prices significantly higher.
Gold as a Safe Haven
Given these economic trends, Maharrey underscored the importance of owning real money—gold and silver—to protect against currency devaluation. With rising central bank demand and increased geopolitical uncertainty, gold continues to be a safe haven investment.
For those looking to hedge against the dollar’s decline, Money Metals Exchange offers a variety of precious metals investment options, including a monthly purchase program starting at just [$100] per month.
As the world moves toward a multi-polar financial system, investors should consider the long-term benefits of diversifying away from fiat currencies and into tangible assets like gold and silver.
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