Washington's 'Trigger-Happy' Sanctions Could Drive Countries Away From Dollar: CNBC

The co-director of the Institute for the Analysis of Global Security states The U.S. has been “extremely trigger-happy” with stinging economic measures, and central banks may decide to diversify their portfolio of foreign reserves instead of relying heavily on the U.S. dollar, reported CNBC.

Gal Luft of the Washington-based think tank notes, “Central banks are beginning to ask questions,” he adds that they wonder if reliance on the dollar and “putting all their eggs in one basket” is a smart idea.

“The United States has extended itself, has been extremely trigger-happy when it comes to the use of sanctions and other economic punishments,” stated Gal Luft.

He stated that one in 10 countries is under U.S. sanctions. That has a cumulative effect, and as a result, we see the dollar playing less and less of a role and portfolios of central banks.

Separately, Luft said the energy market is facing “a heart attack on top of a heart attack” with Covid and the Russia-Ukraine war.

“On the one hand, you are sanctioning right and left. On the other hand, you want countries to buy your Treasuries and finance your debt. That’s not a sustainable scenario,” he mentions.

Luft states there is a realignment in the world’s energy, financial and geopolitical systems and the emergence of a “new world order.”