Will average Western citizens pay the price for the G7’s theft of Russian funds? (Part 1)

The G7’s plan to seize the interest earned by Russian assets is highly controversial in the precedent it sets, claims analyst Dr. George Szamuely, and may be seen as a prelude to the wholesale theft of the country’s funds.

“It doesn't in any way conform to international law,” said Szamuely. “And let's keep in mind this has never been done before.”

“It is customary to freeze accounts of your adversaries during wartime,” the author continued. “It is not customary to then help yourself to that money and put it to whatever uses you want and, in this case, the uses it's being put to are for Ukraine to buy weapons in order to kill Russians. So Russian money is being used to kill Russians. That is just so beyond outrageous.”

The majority of frozen Russian assets at play are held in European banks, Szamuely noted. Leaders across the continent have urged restraint as plans involving Russian funds have been discussed in recent months, fearing repercussions and reputational damage to European financial institutions. Yet, in a striking demonstration of the United States’ power over its NATO allies, Washington eventually prevailed and forced through the plan.

The move carries significant risks in its weaponization of the Western financial system, with observers claiming the confiscation will likely convince global financial interests to further decouple out of fear of the safety of their own assets.

“China has a lot of American assets and European assets, and assets around the world,” noted host Angie Wong. “That could be seized at any moment. And the same treatment could be made of them if they don't play the way the G7 wants them to play.”

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Will average Western citizens pay the price for the G7’s theft of Russian funds? (Part 2)

“Isn't this going to backfire on the US and some of the G7 leaders?” Wong asked. “Because ultimately that just means you're not going to get the foreign investments from Russia or China, maybe Saudi Arabia, whoever their next target is going to be.”

“I would've thought so and I would've thought that it would elevate pressure on China, Russia, India, and other countries to set up their own alternative financial systems,” said Szamuely, referring to efforts that are already under way within the BRICS economic bloc.

China is one of the largest holders of US treasury bonds, the financial instruments the United States uses to finance its substantial deficit spending. But last month the country sold off a record $53.3 billion in US bonds, sounding alarm bells for observers who fear the consequences of countries divesting from US treasuries. The trend has forced the US Federal Reserve to take on unprecedented powers in purchasing US treasury bonds when there is a shortage of foreign buyers, which some believe helps drive inflation.

But the consequences of the loss of dollar hegemony could prove even more disastrous. Observers point out that the trend is already well underway with Russia, China, India and other countries increasingly inking deals to pursue trade denominated in their own currencies. The BRICS bloc has also investigated the possibility of creating its own currency.

The dollar’s role as the de facto global reserve currency is so crucial that it has helped drive US foreign policy, with analysts claiming Libyan leader Muammar Gaddafi’s plans to create a gold-backed African currency provided impetus for his Western-backed overthrow.

“[Dedollarization] means the demise of American power, because American power is based on the ability to pay bills by printing money,” noted US economist Paul Craig Roberts. “That would mean a massive US inflation. It'd be a kind of inflation that results from currency collapse. There’s nothing monetary authorities can do about that. Those kinds of inflations are the real inflations, the real deadly ones.”

Thursday’s announcement, observers worry, brings the US one step closer to that bleak reality.

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Russia seeks to ‘democratize’ global development through BRICS

Russia is taking the lead in efforts to more evenly spread the benefits of global economic development through the creation of a platform allowing countries to trade in their own currencies.

“Not only is it a better idea than the current system where the dollar is the currency of transaction, [but] it's not a new idea,” said expert Linwood Tauheed on Sputnik’s The Critical Hour program. “This is an idea that was proposed by John Maynard Keynes during the Bretton Woods meetings that eventually ended up with the dollar as the reserve currency.”

The proposed system would create a mechanism whereby countries that accumulate an excess in foreign currencies would be granted credits to be used in trade. The BRICS bloc’s consideration of the idea suggests such a system could come about voluntarily, with BRICS members adopting the practice as the bloc gradually expands.

“The strength of the dollar is based on the demand for dollars,” the economist noted. “If the demand for dollars decreases because countries are able to buy in their own national currency, then the strength of the dollar relative to other currencies decreases because demand goes down. That means that the demand for other currencies goes up.”

Currently the US benefits though the US dollar’s status as the world’s global reserve currency, traditionally used in the purchase of oil and other commodities. The arrangement stabilizes the country’s currency and has allowed it to pursue massive deficit spending. A system that uses various currencies would work to more evenly distribute the benefits of using countries’ currency in global trade, Tauheed explained.

“There's a democratization of the power of money in the international sphere,” he said. “And, of course, one of the issues of the BRICS is to democratize this process of developing so that it's not a few countries that benefit from trade, but all countries benefit from trade.”

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'Less than nothing': US, Ukraine agreement is symbolic and lacks longevity

“This [agreement] is totally symbolic. This is absolutely nothing; in fact, it's less than nothing,” said Moscow-based international relations and security analyst Mark Sleboda, who joined Sputnik's The Critical Hour.

The US and Ukraine signed a bilateral security pact on Thursday during the G7 summit in Italy. The agreement follows months of negotiations between the two parties, and has resulted in a 10-year commitment for the training of Ukraine’s forces, as well as other continued military assistance by the US. However, the agreement could easily be undone by future presidents, as the pledge is an executive agreement and not a treaty.

“It's got to be incredibly frustrating and disappointing to [Kiev],” he added. “This tells the Kiev regime that you get what you're already getting. We're going to do it 10 years into the future, but it is an executive decision. It is not a treaty, which means it can easily just be reversed by [former President] Donald Trump or [Vice President] Kamala Harris or anyone else who assumes the office.”

In April, Biden signed a $61 billion military aid package for Ukraine. Afterwards, Zelenksy said that the US and Ukraine would work to create a long-term bilateral security agreement similar to agreements Ukraine had signed with France and Germany, Sputnik reported.

“The Biden administration knows that it has very little limited time and very little pull over Congress. It doesn't want to promise anything publicly that it can't back up or adhere to, even assuming that it's capable of being reelected in November, which is unlikely,” Sleboda said.

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📹"We're Russian. We'll break through"

Russian NTV correspondent Alexey Ivliev lost his arm when he was wounded in Gorlovka, the Donetsk People's Republic, on Thursday.

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