Metals Minute 87: Outside a Dollar Based Financial System

Losses begin to be quantified, with the keyword being "beginning." Citibank announced losses of $3 billion it can currently identify, with more likely to follow. We alerted viewers of this when the Russian sanctions were first announced - that American investors and companies would be among those most affected.

Even U.S. bonds have settlement issues, with many international connections and financial commitments that are beginning to unwind.

Financial obligations are unraveled on both sides of the conflict, as Western powers say Russia is defaulting - while not allowing them access to their resources. Russia is also announcing that Western nations are already behind on paying for Russian resources in the new "Rubles for Gas" trading system.

While China makes announcements about possible conflict with Taiwan, further international financial conflicts emerge. A new international monetary and trading mechanism is emerging outside the existing dollar-based financial system, which ignores prior obligations and debts reckoned in Western currencies. 

This implies that many foreign debts claimed as "assets" on American financial institutions' books could one day soon become uncollectible - wiping out the finances of those who own these "assets." Precious metals have no such counterparty risk.