So if you think the sanctions on Russia Are over you'll be solely mistaken the EU is about to pull a very controversial Move it's a really bold sanction that Could destroy any trust left in the Western Financial system now the European commission has announced that They are going to make Russia pay for The war in Ukraine and when I say pay I Mean literally pay the heat of the EU Ursulas working out a plan to confiscate Russia's frozen assets and give the Money to Ukraine and we need to be clear Right now Russia's funds they are frozen It is held in limbo and would Technically be returned to the owner Once the sanctions are lifted but now we Have the EU looking to use this Frozen Money without permission and according To Ursula she stated the damage suffered By Ukraine is estimated at 600 billion Euros Russia and its oligarchs have to Compensate Ukraine for the damage and Cover the cost for rebuilding the Country every Russia's reserves totaling Only around 300 billion that means the Entire amount could get confiscated away And in order to accomplish this the EU Is going to set up a specialized Court To try Russia's crimes it's a tribunal To pass Justice if you will and I think This is truly a financial nuclear option That once pressed for remedy Dollarization to the next level we are
Going to see a further breaking of trust With the west and a financial Fallout From this is going to be legendary now Obviously Russia isn't happy with this And they mentioned how seizing their Funds or those of the citizens amounts To theft but because the money is locked In the west Putin can't do anything About it directly however we need to Understand the horrific implications This will have on the global economy Especially investment money that's Flowing into the West now the world puts Money to the West especially dollar Denominated assets such as U.S Treasuries because they're supposed to Be risk-free right but if you confiscate A nation's assets and use them for Another purpose you are opening up Pandora's box once again even if the West believes it's their duty to help Ukraine win this might be a step too far I really want honestly think logically About this you are free to believe that This is a morally jazz or unjust move But the financial effects are going to Be very severe we're going to see this Confiscation backfire and Boomerang back To the West once again and let's Remember that sanctions from the West Have been backfiring the initial Freezing of Russian assets started to Shake the trust in the Western Financial System right what's the point of
Investing in the west especially for Countries like China when your money Could be Frozen and this led to a global Treasury done by countries most notably China they have offloaded 130 billion Dollars worth of U.S bonds and if the EU Manages to confiscate Russia's money you Can be sure this won't stop countries That aren't exactly on good terms with The Wares are seeing these and they are Sweating right this is essentially Weaponizing the dollar and the Euro 2.0 We are talking about economic Warfare And it's taking the world into a dark And dangerous territory and once this Precedence has been set we are going to See more and more of this happening down The road right confiscating a nation's Money is now a strategy that can be Employed and right now there are still Legal Frameworks they are preventing This confiscation from happening but the EU is trying to dismantle that they said We think that we can create a structure That would allow us to actually actively Manage these assets and use the process Of managing those assets basically the EU wants to shift the 300 billion Dollars into a fund and they will then Manage to fund how they like and to be Honest I think this will happen the Money is already in their backyard and The G7 could impose a price cap on Russian oil it's not a stretch to
Imagine the EU being able to confiscate Russian money as well and we have to Understand why confiscation is such a Big deal when a country invests their Reserves in assets such as U.S Treasuries or european bonds they are Actually financing the activities of the United States and Europe their tangible Benefits that both sides must enjoy for You to become a mutually beneficial Investment first of all when Russia China and any other country buys Treasuries they are loaning money to the U.S government they're helping to push Bond prices higher and push use down Helping to make subsequent borrowings Cheaper for the United States they are Helping to drive demand for your debt They're actually helping to grow your Economy in return they are promised back The capital and a certain amount of Interest right maybe two three or four Percent so by actually confiscating Their money you are gaining a double Benefit right your bond prices has Already risen and now you have Additional stash of money you didn't own To spend yes the world currently still Has to dance to the tune of the West Because the dollar is the reserve Currency of the world and countries Still needed to import Commodities over 80 percent of trade is invoiced in Dollars and Euros so there'll still be
Demand for currencies and by extension There are bonds they are still the Financial leaders but how far can you Push the world weaponizing Western Assets again isn't a winning strategy in The long term we're already starting see Treasuries being dumbed and a dollar Losing ground as a reserve currency in Central banks dropping from over 70 Percent to 59 in just 20 years some of It is to fight against Rising rates and To protect their own National currencies But a big chunk of it especially from The East is to protect against American Sanctions or even worse a potential European confiscation now the big fear Countries like China have is the threat Of moving the goal post first it was the Russians and the criteria was because of The Ukraine war tomorrow could it happen To me because of a trade war and don't Forget that the U.S has already slapped Sanctions on Beijing in a bid to crush Its semiconductor industry it's a Sweeping sanction that in the short term Will cause a lot of pain to Chinese Tech So this isn't an unfounded fear and if Countries decide to turn tail and run From Western assets and Investments this Will impact the growth of the United States and the EU and I don't think this Move can come at a worst time we have Rising rates and the energy crisis and If a confiscation happens we're gonna
See the opposite happen now obviously it Won't be an instant dump of everything But we're going to see certain countries Really pull their money away from dollar And Euro assets and let's understand What this means for the West especially For Europe now winter is coming and this Energy crisis is going to crush European Industries they are already bracing for Blackouts especially if the weather Turns colder and the last thing Europe Needs is a born crisis on their hands a Confiscation will cost many countries to Rethink their investment strategy and We're going to see yields continue to Rise over time it's going to be harder To borrow money in the future at cheaper Rates and with Russian gas cut off European Industries are going to be Hollowed out and moved to countries like The United States and China and the U.S Will also likely experience further the Dollarization as countries like China Could continue dumping U.S treasuries to Protect themselves because it's one Thing for your money to be frozen into Limbo right it's another for your Results to be taken away and potentially You use against you and let's remember The U.S is on the brink of a recession With Bank of America saying it will hit A country in q1 2023 they are predicting A further 20 drop of the SMP down to 3 200. now the big Banks themselves are
Starting to brace for recession Morgan Stanley is cutting 2 000 jobs ahead of a Potential recession at Jamie Diamond of JP Morgan is warning that consumers are Going broke thanks to inflation so just Imagine a situation where inflation is High rates are high and countries are Afraid of Landing the United States Money mortgage rates will rise as well And spending is going to create even Further and what's the best case Scenario from this this will just drag The recovery out and it'll take longer For the U.S to recover and raising Future money from the East is going to Be much harder rates will go up stock Market growth is going to go down and I Believe this confiscation is going to Happen you're going to find a way to get The assets and give them Ukraine now Whether that's right or wrong I'll leave It to you but let's talk about the Effects because lot of money is going to Run away from the west and when Countries start pulling out their dollar Or euro-denominated assets there's only One logical destination the money will Flow into gold the one asset that holds Value but more importantly it is Counterparty risk-free and we can see Central Bank gold reserves fly back up To the mid-1970 levels of nearly 37 000 Tons whatever goal that was sold over The last few decades has been bought
Back in fact in Q3 alone 400 tons were Bought and around 300 of which were done By big mystery Wheels but I want us to Focus on the biggest bias of gold this Year we can see turkey Egypt Iraq India Qatar and the UAE all buying gold they Know that physical gold is Untouchable From sanctions and pay attention to this Sentence from Bloomberg while penalties Levied by the US and its allies cut off Russia's access to about 300 billion of Reserves held in foreign currencies such As dollars and euros Boolean remains Largely beyond their reach and this is Why we are seeing economies globally Rushing for gold in 2022 in fact Emerging countries like Venezuela and Pakistan have the majority of their Reserves in Gold Uzbekistan for example Holds 65 of their wealth in gold bullion Instead of treasuries they are buying Their own local production and importing More gold from the West they are Stockpiling true wealth that can't be Confiscated but what we need to watch Out for is the Middle East and I'm Talking about Saudi Arabia and OPEC now Asset confiscation is something that They are taking rather seriously Remember that all their oil and gas Sales are priced in dollars and they Recycle their earnings into U.S debt Saudi Arabia alone has over 120 billion Dollars worth of U.S treasuries and
There's always a clear and present Danger that it could evaporate into thin Air and we need to recall the recent OPEC production cuts of 2 million Barrels in November the U.S about Consequences for the Saudi and they Would take action now I don't think the U.S will confiscate saudi's assets just Yet but if the EU goes through with Their Robin Hood plan on the Russian Reserves this will make the Middle East Nervous when dealing with the West this Could start them breaking away from the Petrol dollar Arrangement or at least Take more of their oil revenue and Diversify into physical gold holding Western assets is now even riskier so we Can expect this the dollarization trend To continue and accelerate there are Always consequences for sanctions guys But I think this is taking things to a Whole new level and if there's a chance That your assets could get Frozen and Confiscated away why even bother putting Your money there that's a 100 loss if The sanction switch gets flipped on you But I want us to realize that we are in A financial War the real battle is in a Financial space and not really on the Ground confiscating Russia's money to Give to Ukraine will only use short-term Benefits and the most you might be able To squeeze out around 300 billion Dollars that's a ton of money for sure
About your putting the entire Western Financial system at risk and the world's Going to split further into East versus West sanctions do not work in today's Global economy and if the EU pushes Through with this it could trigger a Global paying run right a run from Western assets into hard assets such as Gold and silver so let me know what you Think in the comments below will the EU Really confiscate the Russian reserves Is this a smart move or will lead Backfire let me know in the comments Below stay safe be sure to smash the Like button and subscribe as we navigate Through these crazy times
