Jim Rickards, an economist and author of the best-selling book ‘Currency Wars,’ has issued an alert about the possible collapse of the global clearance system. In a recent interview, Rickards noted that Euroclear, a settlement service, holds $200 billion in Russian assets. He further explained that Euroclear could face lawsuits if Western countries seize these assets.
Economist Jim Rickards: The Global Clearance and Settlement System Might Collapse After Seizure of Russian Assets
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Jim Rickards: U.S. And E.U. Can Throw A “Monkey Wrench” Into the Global Clearance System if Russian Assets Get Seized
Jim Rickards, an economist and author of the “Currency Wars” best-selling book, has alerted about the possible consequences of the seizure of Russian assets on the global clearance system. In a recent interview, Rickards explained that Russia could retaliate in two different ways if the Western coalition of the U.S. and the European Union finally decided to seize these $300 billion in treasuries and assets.
The first one involves the seizure of the assets and operations of Western companies in Russia. Rickards stressed that there still are more than $300 billion in assets of Western countries in Russia. Putin could also expropriate the assets of Western oil, energy, and natural gas companies and give them to Russian oil giants like Rosneft or Gazprom, making a profit from these retaliatory measures.
Russia can also take legal action against Euroclear, a global financial system that provides clearance and settlement services in Europe and the world. Rickards assessed that out of the $300 billion in Russian assets abroad, $200 million were held by Euroclear, prompting legal action by the Russian Federation if these get delivered to third parties for seizures.
Euroclear has offices even in Hong Kong, and Rickards stresses that these offices would be liable for these seizure actions, potentially causing a block on Euroclear’s services across Europe. This would be even worse than the collapse of the U.S. treasury market derived from these seizure actions, given that it would affect trillions in assets directly while the treasury market could take years to collapse due to these measures.
What do you think about Jim Rickards’ assessment of a possible collapse of Euroclear due to legal action? Tell us in the comments section below.
