Rogue Nations Looking to Crush Dollar with Cryptocurrency
Posted By | October 8, 2018
The attack on the dollar is becoming an all-out war waged by a growing number of nations across the globe. Until now, much of the attention has been on China’s persistent effort to raise the yuan to worldwide dominance over the dollar. However, a new front has opened up in the conflict – one that may prove even more challenging for the U.S. to defend against. A number of nations, including those regarded by America as rogue states, are turning to cryptocurrency as a way to work around the dollar and circumvent Uncle Sam’s global economic power.
Iran and North Korea Among Those Targeting U.S. with Cryptocurrencies
According to a Fox News article, Iran and North Korea are just two of America’s dangerous adversaries taking a hard look at using cryptocurrency to dodge the dollar.
In May, Iran’s interest in cryptocurrency apparently spiked after the U.S. excused itself from a deal that would have removed sanctions against Iran in exchange for the country’s willingness to curb its nuclear program. Mohammad Reza Pourebrahimi, head of the Iranian Parliamentary Commission for Economic Affairs, plainly stated cryptos represent a viable way for nations to stay clear of the dollar. Alireza Daliri, a senior science and technology official of Iran's Presidential Office, also noted Iran is “trying to prepare the grounds to use a domestic digital currency in the country.”
In February, Venezuela unveiled its petro, a cryptocurrency Venezuelan President Nicolas Maduro says represents “kryptonite” to the U.S. government. One executive at a Russian state bank, speaking anonymously, said the Kremlin was actually responsible for bringing the petro to life after it was authorized by Russian President Vladimir Putin. The Fox News article cites an anonymous source who reportedly told Time that people close to Putin “told him this is how to avoid the sanctions. This is how the whole thing started.”
As for North Korea, former NSA cybersecurity official Priscilla Moriuchi said recently that the country earns up to $200 million through the mining and selling of cryptocurrencies. Furthermore, some believe North Korea has been stealing cryptocurrency regularly from a variety of individuals and organizations across the globe.
Cryptocurrency expert Darren Parkin, speaking with Fox, summed up the security challenge for the U.S. this way: “The problem the U.S. has is, if they are dealing with fiat currency (currency that a government has declared to be legal tender), they can monitor the effect of the sanctions. But if countries use cryptocurrency, they have fallen below the radar of what the U.S. can see.”
More broadly, there is little question the effort by these nations – and others – to chip away at the dollar’s dominance is already beginning to make inroads. A recent Bloomberg article published data from the International Monetary Fund (IMF) revealing the dollar’s share of global bank reserves fell to its lowest level since 2013. What’s more, central bank reserves’ allocation to the Chinese yuan rose for the fourth consecutive quarter.
The decline of the U.S. dollar as a portion of global allocated foreign-exchange reserves in Q2 2018 is the ninth such decline in the past 10 quarters. Many analysts have been reluctant to suggest the dollar is genuinely at risk, but Steven Englander, head of global G-10 FX research and North America macro strategy for British multinational bank Standard Chartered, admits the IMF’s numbers suggest “China's efforts to internationalize the renminbi (yuan) are getting to bear some fruit.”
Physical Gold and Silver: Best Defense for Attacks on the Dollar
We’ve mentioned the global attack on the dollar before, and it should be clear the warnings are anything but false alarms. To be certain your savings, including your retirement account, is prepared to withstand the potentially catastrophic damage that could result from a highly marginalized dollar, consider adding assets that have a proven track record of not only surviving, but even thriving, during periods of great economic upheaval.
Ownership of one such asset, precious metals, can provide outstanding portfolio protection throughout a variety of troubled climates. For more information on how you may be able to use physical gold and silver strategically to help insulate your equities-based portfolios in worrisome economic environments, call Augusta Precious Metals at 855-242-4121 and talk with one of our dedicated gold and silver professionals. When you call, be sure to ask how you can best maximize the numerous benefits of physical precious metals with a gold (or silver) IRA.
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