Congress Passes $95 Billion America Last Package
As Zero Hedge reported today, Congress passed a package of bills to fund the Ukraine, Israel, and Taiwan while not providing any additional money for U.S. border security. That Congress passed Ukraine funding on Hitler's birthday probably won't go unnoticed by Ukrainian Neo-Nazis, who have been among the most enthusiastic opponents of Russia since the Donbass conflict that preceded the current war started in 2014.
One of the funding packages also allows for the confiscation of Russian assets in the U.S. That got me wondering when the last time the U.S. confiscated a foreign countries assets was (as opposed to freezing them), so I asked ChatGPT:
When is the last time the U.S. confiscating another country's assets (as opposed to freezing them)? The U.S. froze Iranian assets after Iran invaded the U.S. embassy and took embassy staff hostage, but if I recall correctly, those assets were eventually return to Iran.
Its response:
The distinction between freezing and outright confiscation of assets is significant in international law and diplomacy. When it comes to the United States, cases of asset freezing are more common than outright confiscation, particularly concerning diplomatic or geopolitical disputes.
In the case you mentioned, the U.S. did indeed freeze Iranian assets following the 1979 hostage crisis, where Iranian militants seized the U.S. Embassy in Tehran and took 52 American hostages. The assets were frozen to apply pressure on Iran to resolve the crisis. These assets, however, were not confiscated permanently; they were indeed returned as part of the Algiers Accords in 1981, which was a settlement that facilitated the release of the hostages and resolved various claims between the U.S. and Iran.
Regarding actual confiscation of another country's assets, historical instances where the U.S. might have taken such a step are less frequent and typically tied to periods of open warfare or similar extreme circumstances. One notable example is during World War II, when the U.S. confiscated German and Japanese assets. This was done under the context of the Trading with the Enemy Act, where assets owned by countries at war with the U.S. were seized. These assets were used to fund war efforts and were not returned post-war, representing a rare instance of outright asset confiscation rather than mere freezing.
Is It Worth Risking Dollar Supremacy Over The Ukraine War?
One of the reasons the U.S. dollar is the world's reserve currency is because, historically, foreign assets have been pretty safe here (unless your country is actually at war with us, as Germany and Japan were in World War II). We've already raised the inflation risk of foreign nations holding assets here with our out-of-control deficit spending; if we add the risk of outright confiscation, presumably China and other countries with significant U.S. dollar assets will want higher interest rates to compensate them for that risk. At a time when we have unprecedented levels of debt, this seems inauspicious.
Confiscating Russia's assets also eliminates obvious leverage we could have used to end the Ukraine War: offering to unfreeze their assets as part of a broader settlement (which might have included paying the Ukraine for land annexed by Russia, as we did with Mexico after the Mexican-American War). Now U.S. dollar supremacy may eventually end up being another casualty of the Ukraine War, which has led to so much unnecessary human suffering since Western leaders sabotaged a Russia-Ukraine peace deal early on.
At least the Azov Regiment has another reason to celebrate April 20th now.
In Case You Missed It
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