Sanctioning China Will Destroy The Dollar | America’s Ultimate Mistake

Sanctioning China will be the ultimate Mistake the United States could make we Are talking about the destruction of the U.S dollar itself at splitting the world Into two now we are getting dangerously Close to the economic war between the Two biggest economies in the world the Global economy will be collateral damage But the pieces on the board they're Already being set up in motion now Biden He's discussing possible sanctions on China with the G7 with Olaf Schultz Warning China of consequences if they Supply Russia With Arms we are at a Dangerous escalation point where the U.S Could do the unthinkable and use their Greatest economic weapon on Beijing now America has two powerful tools they can Use against China they've already used The first which is the tax sanctions and The agenda is simple cut off China from American-made chips and Chip making Technology they want to stifle China's Technology progress but that is nothing Compared to the financial nuclear option They have which is weaponizing the USD Dollar against China now we are talking About the big primary sanctions of Cutting China away from the dollar System and this includes freezing Dr Assets like what happened to Russia's Central Bank Reserves and blocking Access to the Swift messaging system but Why is the United States looking to

Sanction China is it really because of The fear of the Chinese setting Russia Weapons now we need to understand the Financial motivations behind this the U.S has spent an enormous amount of Money supporting Ukraine and has Unleashed a terrible inflation wave now We are talking about at least 76 billion Dollars in funding of which over 46 Billion has gone into military aid alone There is a ton of money being poured Into the war effort in fact according to The Congressional budget office the United States is expected to provide Funding to Ukraine well beyond 2030 how Much more money can the West keep Sending in they have also turned Russia Into the most sanctioned country on Planet Earth with over 10 000 sanctions But it is still standing at the taking Ground on the Eastern front so if China Really sends in their arms this will Prolong the conflict and cause the West To bleed out more treasure while keeping Inflation High however if the United States weaponizes the dollar again Especially against the second biggest Economy in the world this is going to Backfire badly yes China will be heard Economically another Global inflation Crisis will happen but the true victim Will be the U.S dollar and we need to Unravel the consequences that could Happen if the G7 does Unthinkable and

Punishes China and let's realize that China is a very different animal Compared to Russia Russia is a commodity Giant and a nuclear power but China's Influence and economic power far exceeds Russia we have darlip Singh the Architect of the American sanctions on Russia himself warning that targeting China is a whole different story and I Want us to focus on two key statements Garlic made to the Senate last month he Essentially told Congress that Sanctioning China is near impossible China's economy is 10 times larger than That of Russia its banking sector is 30 Times larger than that of Russia it is The largest manufactured goods exported In the world by a very large margin and This tells us that China's economy is Resilient and its manufacturing power is Not to be underestimated China still has Many Avenues to access capital and money Even if the dollar is weaponized but Listen to this next admission by saying China has also accumulated a lot of soft Power since the belt and Route Initiative it is the largest lender to Emerging Market countries two times as Much as all other Western governments Combined and this is an important fact That we can't glance pass this means China has a lot of Financial and Social Capital spread across the world if the United States sanctions China and cuts

Them away from the dollar system the war Will be affected and many countries will Close ranks with China we just need to Look at against China is making in the Middle East they just brokered a deal Between Iran and Saudi Arabia bringing The former rival those closer together Towards peace they have agreed to end Years of hostilities something that the United States hasn't been able to Accomplish for decades this is very Important China is building France in The Middle East by forging peace they Are all about business the Chinese they Are securing their Partnerships with the Big oil producers and this is going to Be a major factor why the dollar Sanctions won't be very effective China They have built a lot of alliances and Economic ties with the rest of the world And if the world really found ways to Circumvent Russian sanctions they would Definitely find a way around Western and Bagels to trade with China so what if America does the big one and freezes all Of China's assets and I'm talking about Confiscating all of China's treasury Holdings which is over 860 billion Dollars remember that the money is held In U.S based custodians and broker Dealers so it is technically possible For the funds to be frozen the money is Not in China's hands but will this the Chinese economy will be

Moving nearly a trillion dollars of China's reserves cause or collapse and The answer is not really yes it will Cost a lot of short-term pain and oh boy Will the Chinese be pissed off by just In January alone they have accumulated Forex reserves of nearly 3.2 trillion Dollars so even if the United States Takes away the 860 billion dollars that Is just a 26 hit to China's reserves and Not really a crippling blow but yes it Will be a short-term Financial victory For the United States they can take that Money and keep it locked up in U.S Treasuries and this will help to prop up U.S bond prices and keep yields low Especially with the Federal Reserve Still on its rate hikes campaign now we Already have a major U.S Bank failing Thanks to higher bond prices they are a Victim of rising Bond use just from the Fed rate hikes alone so just imagine if The global South sees China's assets Getting confiscated if they were to dump U.S bonds this could collapse even more Highly leveraged banks in America it Isn't impossible that China's treasuries Could get Frozen as part of the Sanctions package yes happened to Russia Before now China's laws will be America's gain 100 but that is only in The short term the majority of China's Money is away from American Shores in Fact they also have a goal position of

Over 125 billion dollars so if you total That out with the rest of their sdrs and Their reserves to the IMF China actually Has over 3.3 trillion dollars on their Books now here's a really interesting Question if China gets cut away from the Dollar how will they manage the Yuan Without dollars and the traditional Method China does is to keep their Currency competitive is to sell off the Chinese Yuan to buy up US dollars but if America uses the dollar system as a Weapon China faces a dual problem right Now firstly getting dollars from American Trade will be harder secondly Even if they manage to buy dollars they Can't possibly put it into treasuries Again anymore to gain yield and in fact The Western World the G7 might choose Not to accept dollars coming from China So for China buying dollars will be as Good as collecting hot potatoes or Monopoly money and this is where China's Huge Banking and Trade Network comes Into play China can still use their In-house dollar Forex reserves to Suppress the Yuan they can also buy more Domestic gold at home using the Yuan They can keep doing this as they Continue to build more bilateral trade With the rest of the world now all this Will help to push the Yuan down and Still keep their exports competitive for The time being China still has trillions

Of dollars in cash IMF Reserves at sdrs So unless every country on planet Earth Including the brics Nations stop trading With China the punishments won't have Much of a long-term effect and let's Talk about the trade damage to China Because it won't be pretty and China Will Take a Tumble because it is still An export-based economy and let's assume That the entire list of the G7 countries Blacklist China and listens to the United States we are talking about Japan The UK Canada and every nation in the EU They stopped trading entirely with China We are talking about trillions of Dollars of trade loss on both sides now Collectively China will lose more than 1.4 trillion dollars worth of trade and That is almost 40 percent of trade from China's top 20 trading partners right That would be very painful but the G7 Collectively will also lose over 700 Billion dollars worth of business from Chinese Imports and according to the Council of Foreign Relations U.S Companies themselves have profited Immensely from trade with China the Annual purchasing power of U.S Households Rose by fifteen hundred Dollars between 2000 and 2007 alone in Fact over 2 million jobs in the United States were supported by exports to China so if a decoupling happens both Sides will suffer China obviously will

Lose a ton of jobs in the short term but The West will also suffer from job Losses and higher inflation because now They can't access cheap Chinese goods And these are essential Goods we can see That the majority of goods the U.S Imports from China their Electronics Machinery and appliances that's over 230 Billion dollars worth of imports they Are making America more productive and Competitive all these have knock-on Effects on U.S Industries if they have To replace them with higher price Alternatives and the big question is if The West can endure another supply shop Inflation crisis and the economic Recession now this is where the tide Turns against the dollar if China Survives the initial Shock by cutting China away from the dollar system the U.S will trigger the dollarization 2.0 Or even 3.0 it'll be even worse than in 22 when they froze Russia's reserves and Let's handicap the situation even Further let's just play along and we Assume the rest of the world still trust The West after this they still somehow Believe this is another isolated Incident and that the dollar system is Still trustworthy but here's the big Problem because now China has no use for Dollars they will move away from the Dollar trade countries that want to Trade if China will increasingly have to

Use another medium of exchange to access Chinese goods and this leaves only three Options their own local currency the Chinese Yuan or gold and notice that Whichever option A Country chooses it Doesn't involve US Dollars this reduces Demand for dollars which is a problem That will snowball for the west and Let's use Saudi Arabia for example we Know the kingdom is the top crude Supplier to China in 2022 but most of The trade is still done in dollars and Not the Yuan but what if China refuses To pay in dollars because it doesn't Make sense to hold the reserve currency Will Saudi Arabia refuse to sell oil to China remember that China Saudi Arabia's Top trade partner with over 80 billion Dollars worth of trade done between them Almost four times more than the United States are they willing to lose their Biggest trading partner are they willing To only sell energy to the west Countries who are desperately pursuing Green energy to put oil exporters out of Business it is likely that Saudi Arabia Will continue to trade bilaterally with China and it doesn't matter if the Chinese use the Saudi real or the Yuan To buy oil it bypasses the dollar and Reduces the need for the reserve Currency even more we are just Considering trade alone and not even Factoring a rush to the dollar rise

Because of fear if the U.S is willing to Sanction China the second biggest Economy in the world no country is safe And believe it or not if the West really Cuts China away from their financial System it will play directly into Beijing's hands and we know the words The globalizing is becoming the galactic West versus the global South and if China gets punished they will become a Martyr and rarely the brics nations Against the dollar and there are so many Possibilities that can play out that no One can foresee the brics Nations could Push forward for new common currency to Sanction prove themselves we could even See more central banks even from neutral Countries Rush towards goal to protect Their assets from all these chaos in 20 2022 Central Bank buying reached a 55-year high and this Gold Rush won't Stop and just recently Singapore Central Bank stockpiled even more gold lifting Their results by 30 and this is a Country that trades heavily with the West and China this is a message that The world is silently watching they Realize what's going on and they have to Diversify away and reduce counterparty Risk and the US dollar will lose even More relevance because now China's Exporters will also reduce their dollar Exposure we can see since Russia was cut Away from Swift and the dollar system

The amount of exports invoice in dollars And Euros drop it went from over 87 in January 2022 to under 50 today while the Share of Russian exports settled in Rubles went up from 12 to 34 during the Same period so we can expect the same Thing to happen with China's trade in Dollars they will slowly win off their Dependence and use other currencies to Cover the shortfall but here's the big Problem if there are fewer dollars Needed to trade with China there will Have a snowball effect that will hit the U.S treasury market sooner or later we Will see fewer treasuries needed because What's the point the dollar becomes less Useful for international trade Especially if countries can directly Trade with China bilaterally not only do I boost my own currency but also reduce Any counter batteries I have holding on To Dollar denominated assets I will be Sanction proofing myself and avoiding Future currency crisis from the Federal Reserve raising interest rates and that Is a double win not only will China stop Buying U.S treasuries the rest of the World will also scale back they will Recycle fewer dollars back into U.S Bonds and this will cause Bond values to Crash and yields to stay high and the United States is now facing a debt Default crisis that will seriously Damage the Dollar's reputation even

Further and that's not all that's also a Banking disaster that's threatening to Collapse the U.S economy and both of These are height to Rising born yields If the world continues to land less and Less to America can they pay back their Debts at a higher interest rate will They just get a federal reserve to print More money to cover future deficits Because if they do we're going to see More currency debasement and inflation Crisis down the road so here's the deal Punishing China is going to backfire big Time it's going to hurt big time for Both sides we could see China actually Deploy their gold stash to back up their Currency because now there's nothing Truly left to lose this could split the World into two it will be the dollar System and its capital markets versus Commodity Giants and their manufacturing Power tangible assets versus the dollar Matrix Network and right now the dollars Already in a fragile state when it comes To Global trust if China is sanctioned This could cause a deadly effect where Countries start offloading their pile of Dollars because it is becoming dangerous To hold some might dump it to buy gold Others my Stockport other currencies or Bilateral trade but the biggest risk is The pile of dollars flooding back to the United States the only country legally Obligated to take in dollars for goods

And services because if that happens we Could see prices rise domestically in America with everything from Real Estate To Commodities getting bettered up now I Really hope this won't come to pass but If the unthinkable happens we will face Yet another inflation crisis and the Only winner I can see from this doomsday Scenario is gold so let me know what you Think in the comments below where the United States ever sanctioned China can China resist Western pressure and Survive 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