>Freezing Russia's sovereign assets was far more consequential as it eroded the trust on the westerns financial system somehow.
How, exactly? We have spent the last two years building a watertight legal justification for doing so. Nothing was arbitrarily taken, and they are still earning interest on that balance. But if you break international law, you will face international legal consequences, under due process of the law that you agreed to abide by through taking part in our system.
Well, you could be right and yet, the economic consequences would be the same. Contrary to what you say, the freezing of said assets and their confiscation is on legally murky waters, and even if it was clearly allowed by Charter of the United Nations, of course it would require a voting on the security council or at least on the general assembly not just a gentleman agreement between the NATO countries, bypassing the only real source of international law: the UN.
The thing is. Does it matter? Can the US and its partners really enforce it? How do you expect other countries that are not in the western club to react? As I said in other comments, we no longer live in the world where the US is the single biggest commercial partner of every country in the world, we don't live anymore in a world where the US alone is 40% of the global GDP. Those days are over.
There is no “international law”. It’s just some term western politicians made to give them legitimacy. The world also doesn’t care since all countries have border disputes and potential conflicts. Freezing/seizing the money is seen as a serious risk now.
>"There is no “international law”. It’s just some term western politicians made to give them legitimacy."
Indeed all law is just some terms made up by politicians. Yet it is given power by those who enter into contracts willingly to abide by them, as you do when transacting business with the west. They knew the rules, and decided that deliberately breaking them was worth the consequences. We will see if that pans out for them.
That is cool and all; but if the US is going to seize assets after building a watertight legal case then countries can't just by default leave their sovereign assets in places where the US can seize them. A country's bankers are not interested in taking that sort of risk needlessly, there needs to be something in it for them.
Of course the international finance system is complicated so maybe there still is enough of a payoff to holding US dollars, we're seeing something of an exploratory process here as China, Russia and probably India start testing the system. It might hold.
There is. The Fed's 5% rate (along with 3% inflation) is the envy of the entire world right now. Where else on earth are you going to get that, with the only stipulation being "don't violently invade your neighboring countries"? There's simply no alternative, unless you trust China more than the US Government.
How, exactly? We have spent the last two years building a watertight legal justification for doing so. Nothing was arbitrarily taken, and they are still earning interest on that balance. But if you break international law, you will face international legal consequences, under due process of the law that you agreed to abide by through taking part in our system.