The question isn’t whether the cracks are beginning to show. It’s whether they’re just hairline, or something much more fundamental.
For eighty years the dollar has been the most effective and powerful mechanism in the world for ensuring order and stability – as defined by the USA, at least.
In 1956, the US effectively ended the British Empire without firing a shot, by waving around dollar-denominated debt. In the late 1980s, the superior spending power of the US dollar effectively ended the Russian empire.
And in the early 2000s, the transfer of huge amounts of dollars seeded the new and upcoming hegemon, China.
Along the way, the dollar put paid to the gold standard, and allowed for the consolidation of the global financial system into one now almost totally unified system.
If the Chinese do aspire to a takeover of the global financial system, the one they’ll take over will have been built on the back of the dollar.
Even the great hiding place of illicit capital, the Swiss banking system, now opens its doors to American regulators.
But there have been points of resistance along the way.
During various crises in the Middle East talk of replacing the use of the dollar in the oil trade with the Euro has occasionally flared up. The proponents of such ideas are usually unsavory characters like Saddam Hussein or ayatollahs, and as a consequence the Europeans themselves have never shown any enthusiasm for such plans.
But the latest move by President Putin looks like shots fired in a new round of currency skirmishes that could ultimately develop into a full-blown existential struggle for the dollar.
Only a month or so ago, President Putin was saying that crypto currency was likely to stay banned in Russia for the foreseeable future. Similar noises have been heard out of China. And the reasons are straightforward enough: crypto, as it currently operates, is outside the control of any central bank, including the Fed.
No-one controls it, and it’s finite.
These two tangible factors make it an extremely slippery proposition for any government that wants to keep the reins of its country’s own economy firmly in hand.
But – and here’s the kicker – if, either as an individual or as a government, you are being sanctioned out of the US dollar-dominated global economic system anyway, then crypto suddenly starts to have appeal.
And actually, that’s always been a big part of its appeal.
President Putin has to date, and on balance, still been able to benefit from participation of a sort in the US global system. His control of Gazprom is what gives him his power and Gazprom sells in dollars.
In all likelihood, he’ll continue with those arrangements. They’ve worked well for him thus far – although such things are shrouded in deadly secrecy, it’s rumoured that when all the assets are totted up, President Putin is the richest man in the world.
But still, there’s no harm in a hedge. In this current cultural climate, where everyone gets cancelled at the drop of a hat, having an alternative on the table and up and running might well look attractive.
Because, although it may have taken the Americans several decades to be able to reach into bank vaults in Switzerland, but there’s no obvious way in which they’ll ever be able to reach into de-centralised crypto wallets.
To even come close they’d have to waterboard each individual crypto user, and no programme of extraordinary rendition is extensive enough for that.
And in any case, the US has more pressing issues of national financial security closer to home.
Can it even control financial flows in North America any more?
Across the northern border in Canada, an ongoing peaceful protest by truckers in Ottowa has just started using crypto as a fundraising currency.
Why?
Because the US global economic system has turned against the protestors at the behest of the Canadian government. The fundraising platform that the truckers had used, GoFundme has sequestrated over US$9mln, and as a result been nicknamed GoFraudme by the protestors and a significant swathe of North American media.
US senators have pledged to investigate, but whatever happens to it, the key point is that the money is not going to reach the protestors, so job done as far as the Canadian government and its allies in the US financial system are concerned.
Except, it isn’t.
Like others who are unacceptable to the ruling class in the USA, the Canadian truckers are turning to crypto - which, to repeat, cannot be controlled or blocked by any government intervention.
What to the truckers have in common with President Putin? – nothing at.
Except that both are symptomatic of the cracks that are beginning to show in the US global financial edifice. Whether that’s a good or a bad thing depends on whose story you believe and which media you consume.