While the West’s retaliatory sanctions squeeze Russia’s economy, they will have grave repercussions on the US that its citizens will pay for, warned Citadel CEO Ken Griffin.
The primary concern, according to the hedge fund billionaire, is that America is weaponizing the US dollar.
“When we put on the table the possibility that your dollars will become seized, or that you can’t move dollars, we’re telling the rest of the world to embrace other currencies in their portfolio, and we diminish the value of the dollar as the reserve currency,” Griffin said in a Bloomberg TV interview.
Even though the sanctions feel good in the short-term, the long-term impact won’t be as positive, he added.
And eventually, a shift away from dollar-denominated assets around the world could result in steeper costs for the federal government.
“American taxpayers are going to pay for this in the form of higher interest rates on our debt. It hurts our country in a profound way,” Griffin said.
Additionally, he also said the sanctions are hindering the US’s ability to be the leading technology developer in the world.
Since Russia’s invasion of Ukraine last week, Western nations have banded together with a series of economic sanctions against Russia, including the banning of Russian banks from SWIFT, which is a messaging network that’s considered the backbone of the global financial system.
Already, the sanctions have rocked Russia’s economy. The ruble is now worth less than one cent, shares of Russia’s biggest bank plunged 95%, and the Russian stock market has remained closed for three days.
Credit: Yahoo Finance