Like no other President in history, Joseph Biden has transformed the role and function of the US Dollar from a mere medium of exchange to a most potent political weapon. And it is this realization that the rest of the World is reacting to.
Now, economists tell us that the Dollar, or for that many, any currency, is a medium of exchange. An instrument of finance that contains intrinsic value and may be used to purchase goods and services. The average American used their dollars to buy the necessities of life, the food, and shelter we need to survive. We also use discretionary “dollars” to buy those things that bring us satisfaction and pleasure, like when we use dollars at the movie theater or to purchase that shiny new boat. Dollars facilitate all those transactions.
The Dollar has been our country’s chief medium of exchange for over two centuries. And increasingly, it has performed the same function in the global financial markets. Significant governments and international corporations have used the Dollar, for instance, to purchase Saudi Arabian Oil, Chinese Manufactured Goods, and South African Gold.
On January 20, 2021, all of that changed. Under the nation’s new President, Joseph Robinette Biden, the Dollar would no longer be considered merely a medium of exchange; Biden expected much, much more for the Dollar. And he soon went after his goals.
Biden, you see, was the first President to see the political dimension of the Dollar. His vision would transform the one-dimensional currency into the most potent instrument of US Foreign Policy. He has done this principally by unleashing the Dollar from many of its former restraints.
The first restraint Biden has abandoned is that of the budget process itself. To even the most casual observer, it is now apparent that Biden’s vision goes far beyond Washington’s accepted method of spending. In one of the most audacious moves by any President, and certainly the most expensive, Biden spent at least $5 Trillion in an effort to provide “stimulus” after the Covid-19 Pandemic. The United States had never spent more than $1 Trillion in a single year, and Biden just upped that by a factor of 500%.
It’s important to understand that Biden wasn’t just spending money for its own sake. Money to Biden is just a convenience, not something to constrain one’s goals. Biden wanted to end the economic hardship. His concern was social, not economic, so Biden would spend whatever amount would provide immediate relief. He never saw the burden that adding this amount of debt to the nation’s ledger would add in the years ahead. Biden only saw the social problems and an opportunity to be the “White Knight.”
Russia’s invasion of Ukraine gave Biden another opportunity to use the Dollar in a new and unique way. Again Biden used the Dollar in the political, not economic, sense. Completely turning around the conventional meaning of the word: “Sanction,” Biden as the purchaser, would prohibit the purchase of Russian Oil and Gas (customarily called a boycott). But to Biden, the Dollar’s political status is essential here. So in Biden’s World, it was Russia that was gaining Dollars, not the US that was purchasing oil. Biden was inflicting pain by prohibiting Russia from gaining those precious US Dollars.
Using the same logic, Biden was instrumental in removing Russia from the SWIFT System of International Settlements. Biden also encouraged the European Union to issue multiple “sanctions” against the Russian Federation. The underlying presumption was that Russia, or anyone doing business with the United States, was benefiting from merely having this country as their counterparty and would benefit from holding US Dollars.
As the final coup d’grace in Biden’s grand scheme, he froze billions of Russian-owned Dollars held by US Banks. These were dollars held on deposit for future Russian transactions with the US and other countries. But in Biden’s World, ownership has no meaning outside of its political acceptability. Russia had crossed the line in its actions with Ukraine. Therefore, it was permissible for Biden’s Administration to confiscate those funds.
Understanding that Dollars, property, and wealth have no meaning to Biden is critical to understanding the man. Here is a completely political man, driven entirely by power and its pursuit.
And it is precisely for this reason that he makes a terrible steward of our currency. The Trillion Dollar Stimulus plan translated directly into the appalling inflation our country has suffered through the last few years. Removing Russia from the SWIFT System brought shivers to those nations who believed that SWIFT was a purely independent banking system. Cutting off Russian oil and gas made countries that sell to America concerned the same might happen to them. And finally, confiscating Russian Deposits made America an international bandit in the eyes of many.
We can argue over Biden, the Statesman, or Biden, the Politician. But there can be no argument that Biden as a financial steward has been a complete failure. And for that reason, many nations are leaving the Dollar behind.
US Dollar Index, Biden’s Term: Dollar Index (blue, left scale) CPI Inflation (red, right scale)August 3, 2022, US imposes Russian Oil Sanctions, September 28, 2022 record high for US Dollar.