Image: Royal Flag of the Saudi Crown Prince.
In Part One I detailed an abbreviated history of how foreign countries have been involved in the US economy for at least 200 years. It’s actually longer than that if you go back to the original loans, by the Dutch, to the fledgling American government at our very beginning.
That history reveals how European wars have had a direct negative influence on the US economy. Here in Part Two I’ll explain how history is repeating itself — this time, quite possibly with catastrophic results.
Back when the Russia/Ukraine war began, I wrote that we should stay out of it. I added an addendum after receiving criticism for my objection.
My concerns then were with getting involved on the ground using American troops. That has not happened — at least, not thus far. But there are plans in the works to put U.S. air defense systems in Ukraine. For those too young to have lived through the Vietnam era — or who are old enough, but don’t know the sordid details — here is the pattern that got us into that war:
First, we provided Special Forces ‘advisors’ to the South Vietnamese military. The consensus of every veteran I know is that if there aren’t already US ‘advisors’ in Ukraine, I’ll kiss…. well, you get my point.
Next, we provided South Vietnam with ‘air support’ — which at first meant we supplied aircraft, and trained their pilots. But more ‘advisors’ were necessary — as were maintenance support personnel of the aircraft.
When the bases for our aircraft were threatened, we need to secure them — so the U.S. Marines were sent in. The rest is bloody history.
So if you tell me that we will just be sending air defense systems for the Ukrainians to use — but there won’t be any American ‘boots on the ground’ I say ‘rrrriiiiggghhhhht…” If you believe that, then I have some land here in Florida you can have at a very low price — it’s only submerged a couple of months out of the year.
But even if by some stroke of luck we don’t get any dead American troops from this tribal bloodbath between the Russians and Ukrainians, that war has already damaged US interests, possibly irretrievably. That’s where the U.S. economy becomes relevant.
The G7 is an organization of seven “wealthy western nations” who (supposedly) share common economic interests.
While ostensibly all equal, some of the members are “more equal than others” — and the United States is “the most equal of all”.
But in the 21st century, who is not a member of the G7 has come to matter as much as who belongs. One notable non-member is Saudi Arabia – whose ruler, Crown Prince Mohammed bin Salman, declined an invitation to attend the most recent meeting last June.
The reason for the Crown Prince’s non-attendance was ostensibly due to having to attend to business at home. No doubt true — but there is possibly another reason. Have you heard of the BRICS nations? This intergovernmental organization includes Brazil, Russia, India, China, and South Africa… but also Iran, Egypt, Ethiopia, and the United Arab Emirates. To learn more, you can read an Investopedia article here.
There are now 59 potential members of the BRICS organization. They are creating an alternative worldwide economic system that will not be linked to the U.S. dollar. A major impetus for the BRICS to create an alternative system is their concerns about being coerced by the U.S. through the use of economic sanctions — as the US has done often in the past.
BRICS members already don’t need dollars to buy oil – in fact, Saudi Arabia has joined the BRICS, as announced in January. And Saudi Arabia made an oil deal with Russia back in 2022.
At their June 2024 meeting, the leaders of the G7 countries made a long-term commitment to Ukraine. They pledged money that was backed by Russian assets seized by the U.S. as part of economic sanctions.
You may ask, “How does that hurt the U.S.?” It sounds like a pretty smart move, rather than spending (more) American tax dollars. Yes, it does — until the ‘law of unintended consequences’ takes effect. That action by the US-lead G7 aggravates the perception of the US as an economic bully — which plays into the hands of the BRICS organization.
The US dollar is in danger of losing its exclusive reserve status. By sanctioning Russia, we may have accelerated the expansion of BRICS — and global ‘de-dollarization’.
When the Saudi’s made their deal with Russia, they ended the exclusive use of U.S. petro-dollars as the means of buying oil. Now, by giving seized Russian assets to Ukraine, we are throwing fuel on the fire of the economic consequences we will suffer.
In my previous columns about the Ukraine war, I lamented that we were likely getting into a war we couldn’t win.
It appears we’re already losing the economic war.
Gary Beatty lives between Florida and Pagosa Springs. He retired after 30 years as a prosecutor for the State of Florida, has a doctorate in law, is Board Certified in Criminal Trial law by the Florida Supreme Court, and is now a law professor.