The hidden architecture behind Dollar power

Sanctions are the new sieges. Cutting a country off from SWIFT or freezing its assets achieves much the same as a blockade without a single shot fired

- Peter McGahan

OVER the past few months, we've followed how the dollar, which was once a symbol of stability, has quietly morphed into something a lot more fragile.

When I covered debt dedollarisation in 2017, it was met with: "really, the dollar could be replaced as the reserve currency... nahhh".

Now with the freak show that is US politics and policy unveiling into what it has actually been for some time, even the mainstream press are being forced to pay attention to it.

Let's now turn to a part of the story few like to talk about openly - how war, sanctions and global conflict have long been intertwined with sustaining dollar dominance and why that will end.

After the Second World War, the world created the IMF and World Bank under the Bretton Woods system. The aim, or at least their flaky sales pitch, was simple: promote global stability, finance reconstruction and encourage development. But either by design or drift, the plan altered.

When countries needed help, the loans would arrive, but almost always in dollars, with contracts usually favouring Western companies.

In exchange, nations were asked to deregulate, privatise, slash public spending and open their markets. The so-called Washington Consensus.

Sounds bland but understand it, because it's over. In reality, it tied entire economies to the rhythms of Wall Street and the US Treasury.