The Economic War Just Got Crazier – Let’s Take Their Money!

So this is a big one we know Russia and Europe they are waging economic War Putin's game is to inflict higher Inflationary pain while the West is out To squeeze Russian revenues it's Basically a wall of attrition to see who Can Outlast the other it's the same Strategy as what's happening on the Ground but now we have a serious Escalation of economic sanctions that I Believe might just cross the line here's The potential to derail any trust left In a Western Financial system and this Is a very big one we have the EU calling To examine if Russia's assets can be Confiscated for Ukraine's reconstruction Basically they want to take Russia's Central Bank assets around 300 billion Dollars worth and give it to Ukraine and If you base the cost of reconstruction And recovery on Dr figures the sum is Estimated at 350 billion euros this Means Russia's assets cook it completely Swallowed up into Oblivion and what's Really distressing is how many EU States Especially the ones in the baltics Accounting for quick money grab now in Reports they wrote to the president of The European Council saying those frozen Assets must be used as soon as possible We cannot wait until the war is over and A peace agreement is signed and I think We can see how dangerous of a president These is at least to me this is a

Financial nuclear option there's no Rewind button the moment you press this Two things are going to happen guys now The first is obvious negotiations will Be off the table you'll make any peace Treaty that much hard to accomplish even The EU has to see that Russia's 300 Billion dollars in Frozen reserves is a Bargaining chip for peace talks right if You confiscate the money suddenly you Lose whatever little leverage you have Left and the second effect is more Dangerous and Lasting you will Immediately break any confidence left in A Western Financial system right this Will be a wake-up call to the world Especially to China who you could see The dollarization accelerate like now Ever before now you are free to believe If this confiscation is right or wrong I'm just here to examine its effects and How this might actually be worse for the West than for Russia right and let's Understand this the reason why countries They buy treasuries or Euro bonds and Put the money in Western Banks is Because they are supposed to be Risk-free they are supposed to be Custodians of your assets but if you Confiscate a nation's reserves and use Them for another purpose it is opening Up Pandora's box once again and what's Frightening is how the EU is now taking Concrete steps to identify where those

Assets are located they are about to Force Banks to report information on Russian Central Bank assets so if Western banks in the Eurozone are Holding any Russian assets they have to Report it to the commission and if they Don't they'll be slapped with fines as High as 10 of annual turnover and for Banks that amounts to billions of Dollars easily and this also means that The banks will likely comply and give up The information and this is frightening Because nothing is confidential show Anymore not even the assets of central Banks even the United States knows this Is a bridge too far with Janet Yellen Saying how it isn't legal for the U.S to Cease Russian official assets they are Afraid of setting precedence and eroding Other countries confidence in holding Their Central Bank Assets in the United States they know how important Wall Street is to the U.S economy and they Won't want to compromise the Integrity Of the big Banks so if Europe goes Through with this they are going to Hollow out their backing sector central Banks are going to move their money to Other Financial Centers of power right Money is going to flow to Hong Kong Dubai and even the United States to a Lesser degree but let's examine this Proposed confiscation because it gets Really interesting there's even a split

Amongst how Europe wants Russian assets To be used now the original plan from The EU is to take Russia's 300 billion Dollars in reserves and put it into a Fund and then invest them right Basically the EU wants to be the hedge Fund manager of Russian assets which is Extremely bizarre to say the least but This is the key point they will only use The proceeds from these funds to help Ukraine rebuild meaning they will use The profits the earnings from the 300 Billion and not the capital itself and Let's dig a little deeper and realize Where that money is likely going to go If they want to guarantee profits from The Russian money it's likely going to Flow into risk-free assets such as U.S Treasuries or european bonds right it Helps to prop up their bond market Without risking the capital and let's Just say they throw the entire 300 Billion to German two-year bonds and Nearly three percent yield that's almost 9 billion euros in Revenue every year For Ukraine so that is the lesser of the Two evils right at least the Russian Reserves are still somewhat intact you Use Russia's money to gain income for Ukraine's rebuilding and you save your Bond market at the same time because Remember when you pump money to bonds You raise prices and new lower bond Yields and this overall helps borrowing

Cost for the EU right it lowers the Borrowing cost which is very helpful for Di economy as especially when we are on The brink of a global recession and that Is bad enough but what we have is Poland And the Baltic states taking a more Aggressive stance they are arguing that All assets should be used to cover the Cause of Russian aggression against Ukraine which likely include the entire 300 billion dollars in capital not just The proceeds and if they do that it's Going to set up the ultimate precedent For many countries to diversify away From the West they will flee from the Euro and even dollar denominated assets And run into alternative assets like Gold and it's not just China That's Watching This Disaster play out is the Middle East Saudi Arabia it's the OPEC Nations wondering if their money is Truly safe and I want us to take a look At this the dollarization trend from China we can see that for almost a year Straight China has been dubbing their U.S treasuries non-stop you went from Over treated in March last year to under 870 billion in December's latest report China they have been dead using man of The month because they know the risk of Sanctions and what has the Chinese been Buying gold whatever treasuries they Sold or matured have likely flown into Precious metals we have Chinese Central

Bank buying yet another 15 Tons of gold In January bringing Dr buying speed to Three months in a row so they dumb Treasuries and they buy gold I think Even a five-year-old knows what this Means right it's the dollarization 101 This is a big problem for Europe because If they confiscate Russia's assets they Could reach Exodus of Chinese money Fleeing their Banks if you can see that China's Forex reserves has grown to Almost 3.2 trillion dollars worth and if We rank them they are at the top spot The highest in the world modern Japan Switzerland and Saudi Arabia combined And remember what Forex reserves are These are Financial assets that held in Currencies outside of the Yuan it Includes dollars euros treasuries and European bonds so just imagine if the EU Really confiscates Russia's reserves it Could trigger a flight of Chinese money Out of the European Banks and markets Right they could start dumping Euro Bonds and U.S treasuries pulling cash Away from the Western Financial system And I don't think the EU planners have Fully considered the gravity of this Situation and the Butterfly Effects Sanctions truly can have the net effect Might actually hurt their economy small And it's not like the Euro Zone has a Robust economy today we even have the IMF telling us that amongst the G7

Nations Europe will experience the Slowest growth of them all the Eurozone Will only grow by 0.7 percent compared To the United States 1.4 percent and it Gets worse if you take a look at Germany They are already on the brink of Recession so if bond yields continue to Spike up especially if countries put Their money away from Europe this is Going to help their economy now I Believe they will find a way to Confiscate Russia's assets and give them To Ukraine right so you have to brace For impact because we just don't know How bad things can get but let's Continue you dig into this sanctions Package the tank package of sanctions That's about to hit Russia now we have Proposals for further export bans worth More than 11 billion euros about to hit Russia these are targeting vital Goods Especially electronics and rare Earth's Components that can be used in Russian Weapons and according to Ursula with This we have been all technology Products found on a battlefield and We'll make sure that they don't find Other ways to get there and to do this They are likely going to slap secondary Sanctions or countries like China and Iran cutting them away from the Western Financial system right and I think we Have reached a very dangerous point in This conflict where everything can be

Weaponized first it was the dollar then It was shipping insurance and then the Price kept on oil now Banning trade is The latest move and the end result is Going to be very simple all these Sanctions are just going to create a Group of countries they'll be pissed off With the G7 and they'll start to work More closely with each other right Remember that so-called No Limits Partnership China has Russia well it's Going to evolve into a no choice Partnership we all now have no choice Especially in the financial space we Have to remember that Russia has now Completely deteriorized themselves they Have also removed the Euro from their National wealth fund replacing it with Rubles gold and the Chinese Yuan and we Just don't know how far this will go Across the world will China follow suit And start dumping euros and dollars Because if they're holding Western bonds China is essentially back rolling the West they are loading money to Europe And America to grow their economy and as Zoltan posa puts it it makes no logical Sense for China to roll their Investments in G7 debt claims it will Mean refunding the West efforts to Re-arm restore restock and rewire Against the ease and this is why this Latest sanctions package is just so Dangerous right it cuts into the heart

Of the banking system and raises a lot Of questions for central banks is my Money saved in the west is it worth it By dollar or Euro denominated bonds and All these are valid questions to ask in Fact Switzerland has come out declaring That the confiscation of Russian assets Is unconstitutional they are refusing to Take Russian reserves and give them Ukraine because they know the domino Effect it could have it will just wreck The reputation of the Swiss banks and Sooner or later guys this conflict will Be over and they don't want that state On their banking reputation after the Smoke Clears and the firing stops Swiss Banks were likely won their Russian Customers back and I don't think even The United States will push their luck And cross that line they won't go that Far either and that's why the Conversation Europe is having is truly Disturbing money has to be treated as Sacrosanct it is neither good nor evil And should be treated as such trying to Confiscate any money might be a bridge Too far so let me know what you think in The comments below will the European Union really confiscate the Russian Reserves how will the world respond let Me know in the comments below stay safe Be sure to smash the like button and Subscribe as we navigate through this Insane times