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Whether you like it or not, if you own and transact in dollars, your lot is cast with every other person, business, central bank and investment fund that owns dollars.
Those latter two groups have significant and direct influence over what happens to the dollars in your accounts, as well as the value of the wage you earn, and the price you pay to trade dollar denominated goods.
For Americans – that means everything you buy, sell, own and save.
It’s all dollars, unless of course you own gold/silver and other hard assets.
Under normal circumstances, those big institutions and sovereign banks shared your interests in keeping the dollar stable.
No more.
Starting in 2022 when the US Treasury sanctioned Russia following its invasion of Ukraine, sovereigns and institutions began a steady withdrawal from the dollar system.
Hundreds of billions of dollars have left the Treasury market and fled into gold. The realization from these large asset holders was clear: if the Treasury can turn off our dollar holdings with the flip of a switch, we need to minimize our exposure. What happened to Russia might happen to me.
Treasury Secretary Scott Bessent just flipped the switch again – this time not just on Iran, but on ANY country found to be trading with or assisting Iran.
According to a story on Axios: “The Treasury Department sanctioned nearly 60 entities, individuals and vessels that are involved in illicit procurement of nuclear and missile technology as well as cyber operations and oil smuggling.”
There’s no timeline for when Bessent will roll out “secondary” sanctions on any entities involved in the trading with Iran of digital assets, technology, gold, aviation and shipping.
But the message is now even clearer: the US can/will turn off your dollars if it doesn’t like you, your behavior, or the people you associate with.
The same sanctions playbook that accelerated gold purchases (and de-dollarization) in 2022 is now being rolled out to dozens of other entities…
If you hold dollars, you don’t have the luxury of simply waiting to see what comes next. We already know.
Outside of a core of America’s closest allies, every other dollar holder is going to have the same thought: “I really need to get rid of these dollars and I should probably buy gold.”
Bessent said, “It is time for world leaders to make a decision … between America and Iran.”
I mean, sure – that’s a no-brainer. Everyone who can avoid trade with Iran will do so. But Bessent is not talking about what happens next, and the real choice that he’s forcing on everyone who owns dollars.
It’s not between the US and Iran, it’s between the US dollar and monetary alternatives.
There’s only one major monetary asset that’s outside of the control of the US dollar system and everyone knows it: gold.
To paint a picture: USD is a burning theater and the only way out is to flee the dollar in favor of gold.
This ultimatum from Bessent also comes on the heels of him apparently asking allies not to sell US Treasury bonds while he intervened to help prop up the Japanese Yen. It seems like a conflicted policy until you realize the larger trend and goal of US monetary policy.
Inflation is the goal. Debasement, de-dollarization, sanctions, Treasury interventions – it’s all part of the same story about the US Government’s only viable solution to dealing with its massive $40 trillion in debt, which is to inflate the hell out of the US dollar.
Bessent calls this new wave of sanctions the “end game.” He’s talking about the ongoing conflict with Iran, but he might as well be talking about the dollar, because it’s having the same effect.
If you own dollars you should be aware that you’re in the game whether you like it or not, and the biggest players are all heading for the exits.
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio
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