Basel I & Basel II Have Aggravated the Man-Made Dollar Virus

Metaphorically speaking, prior to the man-created dollar virus leaked from the 1944 Bretton Woods Conference (i.e. the virology lab), financial crises were termed as a panic and the Panic of 1907 was the last financial crisis termed this way. The roaring 1920s (equity and housing bubbles in the U.S.), the Fed’s unwarranted tight-money policy error to curtail speculative activities on Wall Street and to avoid a potential stock market crash (1929), and a severe economic recession with massive bank failures at the onset of the 1930s resulted in catchy economic jargons to be coined such as the Great Crash of 1929 and Great Depression of the 1930s. At the backdrop of no large-scale conflicts, the Cold War era (i.e. bipolarity and two superpowers) gave the dollar virus a rare opportunity to gain strength during the halcyon periods of economic growth (1950s and 1960s), but the Nixon shock (President Nixon’s decision to cut dollar’s link or convertibility to gold) caused the dollar virus to mutate into a more dangerous variant, the upshot of which was an epidemic (i.e. Latin American debt crisis) as the dollar virus began to infect major economies in Latin America through commercial banks’ short-term lending of the dollar glut from rich oil-producing countries to Latin American states. Risk insensitive rules of Basel I banking standard (released to banks in July 1988) aggravated the dollar virus and forced it to mutate into a more severe variant in the late 1990s which caused another epidemic in the East Asia and Pacific (Korea, Indonesia, Malaysia, Philippines, Singapore, and Thailand), but this time was different than the antecedent, the Asian financial crisis of 1997-98 in systemic nature (President Clinton called it a “glitch”) made investors lose $700 billion ($30 billion by Americans). The criticism and mounting pressure prompted the Basel Committee on Banking Supervision (the standard setter) to overhaul Basel I; contrary to the hyped optimism and promises, Basel II (Revised Framework) has made developing and emerging economies more crisis-prone. Thanks to the selfish “America First” policy, weaponization of the dollar, and abuse of the sanction power, now the dollar virus has reached a pandemic status with the objective of enslaving the humankind and bringing on the Armageddon. Although COVID-19 pandemic (Great Health Crisis – GHC) has killed over 6 million people worldwide, if not contained by designing of a new monetary order (no hegemony of one nation and one currency), the dollar virus as a weapon of vast economic destruction will take more lives, maybe by billions