Robert Shiller Warns Of ‘Cataclysm’ For US Dollar Reserve Status If Confiscated Russian Assets Given To Ukraine
If the United States shifts frozen Russian assets to Ukraine, it would be cataclysmic for the US Dollar’s status as the global reserve currency, says Nobel Prize winning Yale professor, Robert Shiller.
“If America does this to Russia today… then tomorrow it can do this to anyone,” he told Italian news outlet La Repubblica in an interview published Sunday.
“This will destroy the halo of security that surrounds the dollar and will be the first step towards de-dollarization, which many are increasingly confidently leaning toward, from China to developing countries, not to mention Russia itself,” Schiller continued.
The US, EU, and allies have frozen some $300 billion of Russian foreign exchange reserve assets since last year after slapping the Kremlin with sanctions over the Ukraine war. Over the past year, various ideas have been tossed around regarding using the funds to aid Ukraine.
Earlier this month, the Financial Times described doing so as “a radical step that would open a new chapter in the west’s financial warfare against Moscow.”
“I can’t convince myself that this [confiscation of Russian assets] is the right way,” said Schiller, who received the Nobel Prize in Economics in 2013, and is known for his expertise in behavioral economics and macroeconomics. He was named one of Bloomberg’s ’50 most influential people’ in global finance.
“In addition to the fact that this will be confirmation for the Russian leader that what is happening in Ukraine is a proxy war, it could paradoxically turn against America and the entire West,” he continued, adding that giving confiscated Russian assets to Ukraine would become “a cataclysm for the current dollar-dominated economic system.”
Russia has called the confiscation unlawful, and warned that any country considering participating in sanctions should expect a mirror response from Moscow.