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Congress Contemplates Additional $300 Billion to Ukraine

Congress Contemplates Additional $300 Billion to Ukraine

May 29, 2024

Congress Contemplates Additional $300 Billion to Ukraine

There are indications that the United States Congress might be on the verge of allocating an additional $300 billion to Ukraine, a move that would not require a formal vote. This comes in the wake of escalating tensions between the U.S. and Russia, with the latter threatening to seize American assets in response to the freezing of Russian central bank funds by Washington.

The U.S. and its European allies expropriated approximately $300 billion from Russia's central bank in 2022 as part of sanctions imposed due to the ongoing war in Ukraine. These funds, normally used to back the Russian ruble, were intended to precipitate a banking crisis in Russia. Despite these intentions, the anticipated collapse of Russian banking did not materialize. Conversely, the United States faced its own banking challenges, with the collapse of financial institutions such as Silicon Valley Bank, prompting emergency measures by Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen, including substantial loans and FDIC commitments exceeding the organization's reserves.

As Washington grappled with its own financial difficulties, the frozen Russian assets lay in limbo. However, with political resistance in the U.S. and EU mounting against further monetary support to Ukraine, an inventive strategy emerged: the proposal to redirect the seized Russian funds directly to Ukraine. This unprecedented maneuver signals to the global community that U.S. dollar assets may no longer be the stable investment once believed, potentially endangering the dollar's status as the world's reserve currency.

AP News

Countries worldwide, including those without direct conflict with the U.S., are now reevaluating the safety of holding U.S. dollars. The president of Indonesia, representing the ASEAN community, openly advised a departure from dollar reliance, citing Russia's predicament as a cautionary tale.

Business Insider

The United States has already provided substantial aid to Ukraine, and if the proposed allocation goes through, American support could reach $225 billion, with a trajectory pointing towards $500 billion. This figure represents a significant burden on U.S. taxpayers, each family potentially shouldering the equivalent of nearly $5,000, while many Americans struggle with personal financial emergencies and the country grapples with infrastructure challenges.

The ongoing conflict in Ukraine, much like the long-drawn Afghan war, looms as a drain on the U.S. treasury, with human casualties mounting and no clear end in sight. Meanwhile, some fear that U.S. policymakers may already be setting the stage for future conflicts in regions ranging from the Middle East to Latin America and Africa.


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