It's telling that during World War II, neither the United States nor the United Kingdom—when the British pound sterling was the world's reserve currency—ever considered weaponizing their currencies against Germany, Japan, or Italy. But wiser heads were running the allied nations then.

But President Joe Biden and Secretary of State Antony Blinken, along with Treasury Secretary Janet Yellen, did exactly that. And they lost.  In the immediate aftermath of the Russian invasion, the ruble fell, as expected. But then for much of last year, the ruble actually gained strength relative to the dollar—stronger than it had been before the invasion! 

It has only declined again since the winter, after Russian battlefield setbacks in the Donbas and the mutiny of the Russian mercenary Wagner Group.

Far worse, though, is that Biden's reckless foreign policy failure has damaged—perhaps irrevocably—the status of the U.S. dollar as the world's reserve currency.

Hitting the USA Like a Ton of BRICS

In August, the BRICS countries—Brazil, Russia, India, China, and South Africa—will meet in Johannesburg, South Africa, and "de-dollarizing" the global economy is on the summit agenda. While nobody expects the dollar to be displaced anytime soon, the rise of digital currencies—and particularly CBDCs, central bank digital currencies—will make it much easier to bypass U.S. Treasury and SWIFT (Society for Worldwide Interbank Financial Telecommunication sanctions, the incumbent means of transferring funds globally) sanctions.