Nobel Prize winning economist Robert Shiller has warned against the effects that the confiscation of Russian assets in Western countries might have on the stability of the dollar-dominated financial system. According to Shiller, a move of this kind might cause a cataclysm, opening the doors for countries that use the dollar as a reserve currency to move their treasuries to other currencies.
Robert Shiller Fears Cataclysmic Events
The confiscation of Russian assets frozen by Western countries due to sanctions following the Russia-Ukraine conflict might trigger a chain of events that would affect the strength of the U.S. dollar-led financial system. This is the opinion of Robert Shiller, winner of the 2013 Nobel Prize in Economic Sciences, who is openly inviting the Biden administration to ponder more carefully about the results of such a measure.
In a recent interview offered to the Italian newspaper La Repubblica, Shiller declared that other nations might assume that if the U.S. does this with Russia, it can do it with any other country, weakening its position in the world economy.
Shiller explained:
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.
Shiller also detailed this move would confirm the Russian claims that this is indeed a proxy war, backfiring against the U.S. and turning it into a "cataclysm" for the current dollar-dominated financial system.
Furthermore, while he claims this can be "morally right," he acknowledges many unknowns regarding this move, and that it is better to think about it "very carefully."
According to NYT, the Biden Administration is pressing Britain, France, Germany, Italy, Canada, and Japan to come up with a strategy to achieve the confiscation of more than $300 billion in Russian assets before February 24, a date that will mark the beginning of the third year of the recent Russia-Ukraine conflict.
In April, Bank of Russia governor Elvira Nabiullina stated that while Russia had moved to stockpile reserves in non-U.S. seizable assets, it was still working to retrieve $300 billion.
What do you think about Robert Shiller's opinion on a possible Russian asset confiscation? Tell us in the comments section below.
Source: Bitcoin.com
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