Sunday, January 12, 2020

U.S. Threatens Iraq That It Will Lose Access to Its Bank Account at the Federal Reserve

New York Federal Reserve Bank
This is stunning news.

The Trump administration warned Iraq this past week that it risks losing access to a critical government bank account if Baghdad kicks out American forces following the U.S. airstrike that killed a top Iranian general, according to Iraqi officials, reports The Wall Street Journal.

Here are the details via The Journal:
The State Department warned that the U.S. could shut down Iraq’s access to the country’s central bank account held at the Federal Reserve Bank of New York, a move that could jolt Iraq’s already shaky economy, the officials said.
Iraq, like other countries, maintains government accounts at the New York Fed as an important part of managing the country’s finances, including revenue from oil sales. Loss of access to the accounts could restrict Iraq’s use of that revenue, creating a cash crunch in Iraq’s financial system and constricting a critical lubricant for the economy.
Bottom line: The U.S. continues to use the global dominance of the US dollar to bully countries that don't fall in line with its demands.

You can be sure that every country in the world will take notice of the threat.

When the move away from the dollar as a reverse currency begins in earnest, the flight from the dollar on foreign exchange markets will be fierce.

And that is what economic blowback will look like: The crash of the dollar.



  1. With allies like the US, who needs enemies...

  2. So when is this big move away from the dollar supposed to occur? Chinese currency ain't worth crap to anyone since it never became a dominant player. And what happened to the BRICS? Oh, they can't do crap either since they are all incompetent turd world countries that don't trust each other to create a viable alternative either.

    1. It will happen, but who knows when

    2. It's hard to say when, but, like Dan said, it will happen. Fiat currencies are not eternal; they have shelf lives. The dollar's shelf life has lasted longer than most, if not all other fiat currencies, because it's the world's reserve currency and has been so for quite some time. But excessive money printing, acts of war otherwise known as sanctions against US enemies and allies, and trade wars with economically powerful enemies will conspire against the dollar eventually leading to it's demise.

      The question becomes: what will replace the dollar? And what are the implications of the dollar's replacement? And how do holders of dollars protect themselves and/or profit from its extinction?

      I think we'll find out.