Monday, October 22, 2018

U.S. seeking to bully SWIFT into becoming an economic weapon which could lead to a showdown between Trump and the EU

The way that President Trump has alienated so many nations over Iran, one has to truly wonder if his real intention is to force everyone into abandoning the dollar entirely.  Because that is what appears to be where Washington is heading as the Treasury Department is right now in the process of trying to bully the authorities over SWIFT to turn the global messaging system into an economic weapon.

To achieve the US goal of further isolating Iran from the global financial community, Mnuchin said that the U.S. Treasury was already in negotiations with the Belgian-based financial messaging service SWIFT which intermediates the bulk of the world’s cross-border dollar-denominated transactions, on disconnecting Iran from the network. Washington has been pressuring SWIFT to cut Iran from the system as it did in 2012 before the nuclear deal. 
Validating European concerns that the US can and will weaponize the dollar at will and use the reserve currency as a global bargaining chip, Mnuchin's threats confirmed that although the United States does not hold a majority on SWIFT’s board of directors, the Trump administration could impose penalties on SWIFT unless it disconnects from Iran, pressuring it to comply with US demands. 
"I can assure you our objective is to make sure that sanctioned transactions do not occur whether it’s through SWIFT or any other mechanism,” he said, “Our focus is to make sure that the sanctions are enforced." - Zerohedge
Interestingly, if this is truly Trump's gambit to force de-dollarization on the rest of the world then it appears to be working.  Because not only have two of the biggest economies in the world (Russia and China) already created their own alternative to SWIFT which would allow nations like Iran to transact in cross-border payments outside the dollar, but Europe is also rushing headlong towards the creation of their own system which would subsequently make the SWIFT system close to obsolete.


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