EDITOR'S NOTE: Russian President Vladimir Putin says the U.S. is killing its own dollar as the world’s reserve currency. The world leader recently told CNBC, “It seems to me that the United States is making a very big mistake by using the dollar as a sanctions instrument... by preventing payment in dollars for the sanctioned products.” Putin also said the U.S. is “sawing off the branch they’re sitting on by undermining the dollar’s dominance as the global reserve currency for the sake of short-term political gain at home, but harming their strategic economic interests.” While everyone knows that Putin isn’t America’s biggest fan, it's hard to argue that the central bank’s monetary policy and the government’s geopolitical dealings aren’t hurting the dollar just like the Russian ruler says.
That's according to Russian President Vladimir Putin, who was speaking after a panel discussion at the Russian Energy Week, in Moscow, on Wednesday.
“It seems to me that the United States is making a very big mistake by using the dollar as a sanctions instrument... by preventing payment in dollars for the sanctioned products,” he told CNBC’s Hadley Gamble.
Countries facing US sanctions, like Russia, “have no other choice, we are simply forced to switch to settlements in other currencies,” he added. Gamble had asked about the possibility of using cryptocurrencies such as Bitcoin to sell oil and gas, something Putin welcomed in principle but said it was “too early,” citing crypto’s volatility.
Russia is still accepting dollars in energy trade, and – for now – has no plans to ditch the US currency entirely, Putin noted, but “if the policy of the American authorities continues… then we will not have to do anything, the US will itself undermine confidence in the dollar.”
Even US allies were reducing their dollar holdings and reliance on US currency in mutual trade, the Russian leader pointed out. Not just because the dollar has been weaponized for sanctions, but also because Washington is devaluing the currency at home, by printing money and raising the national debt.
“For the first time, probably in history, inflation in the United States is growing at a rate that has not happened for a long time,” Putin told CNBC.
Everyone is now asking the question: what next? What will the US economic authorities do with this colossal debt? What will they do, carry out some manipulations with the dollar, lower its value?
The US is basically “sawing off the branch they’re sitting on,” Putin said, “by undermining the dollar’s dominance as the global reserve currency for the sake of short-term political gain at home, but harming their strategic economic interests” in the long term.