Executive Summary

• The building momentum for de-dollarization by the East. It's no longer an empty threat.
• Russia's long game strategy
• Big strategic blunders the West is making now
• How the financial markets are grossly under-pricing these fast-growing risks

If you have not yet read Is Part 1: Is On the Path To War available free to all readers, please click here to read it first.

Peak Dollar?

One thing that is absolutely crystal clear at this point is that Putin and Russia consider the US and its dollar hegemony to be a parasitic anachronism that no longer serves anybody besides the US. Putin has made many direct comments to that effect and then followed them up with concrete deals struck in ways that bypass the dollar entirely.

Here's what he said back in 2011, well before any of the recent action started:

Putin says U.S. is "parasite" on global economy

Aug 1, 2011

LAKE SELIGER, Russia (Reuters) – Russian Prime Minister Vladimir Putin accused the United States Monday of living beyond its means "like a parasite" on the global economy and said dollar dominance was a threat to the financial markets.

"They are living beyond their means and shifting a part of the weight of their problems to the world economy," Putin told the pro-Kremlin youth group Nashi while touring its lakeside summer camp some five hours drive north of Moscow.

"They are living like parasites off the global economy and their monopoly of the dollar," Putin said at the open-air meeting with admiring young Russians in what looked like early campaigning before parliamentary and presidential polls.

"If over there (in America) there is a systemic malfunction, this will affect everyone," Putin told the young Russians.

"Countries like Russia and China hold a significant part of their reserves in American securities … There should be other reserve currencies."

And he's right – it is parasitic for the world's reserve currency to 'live beyond its means'. What happens is that the issuer of the reserve currency, the US in this case, gets to run enormous trade deficits, acquire real things from real people (like oil and cars), and print money out of thin air to pay for it all.