Two very large banks in Asia and Europe announced yesterday that they are going to comply with US regulators over the controversial Dodd-Frank Act. The destructive rules proposed by the Dodd-frank Act are so complicated that it will require additional specialized professionals to begin to start understanding the specifics of this legislation. This act contains over 2,000 pages of burdensome rules with which foreign banks and corporations must comply if they intend to do business with the US or a US citizen.

Singapore’s DBS bank and Sweden’s Nordea Bank are apparently the first banks to declare that they will not register for this legislation. For those unaware of the Dodd-Frank Act, Tom Easton points out the min issues in the video below.

I pointed out in a previous article (“Mo Government Mo Problems“) how legislation like the the Dodd-Frank Act leads to economic destruction: such legislation ultimately benefits large, “too-big-to-fail” corporations, while the smaller companies are doomed to fail due to the increased overhead costs which result in a loss of competitive advantage. The Dodd-Frank Act is more paperwork, regulations, and hassle. In response to this act, many foreign banks have been refusing US citizens and some are even going to the extent of closing US customer accounts. Some foreign banks simply do not want to bother with burdensome US regulations, therefore it is in their interests not to accept US clients.

What Does This Mean To The US Dollar and The Petrodollar System?

Meanwhile, as complying with the United States and American businesses becomes too burdensome, the US Dollar is slowly losing its reserve currency status because of such destructive policies. Countries around the world are starting to increase their foreign reserves in gold and Chinese Renminbi, among other currencies. Conducting business with the United States is becoming undesirable. The Chinese are making new strides in the global market place, as they unveil Renminbi-denominated corporate bonds, bi-lateral trade agreements with oil producing countries, and the launching of Renminbi-denominated commodity futures contracts.

Since the US dollar is a fiat currency, the intrinsic value of the US dollar is confidence and trust that its purchasing power will remain. Foreigners are losing confidence in the dollar, and DBS and Nodea are just the start of a series of banks to create resistance to the Dodd-Frank Act. As I expect this trend to continue and take hold, the US dollar will continue its decline and an eventual collapse will ensue.

What Can You Do To Protect Yourself From The Petrodollar Collapse?

Get out of US Dollars as much as possible. Store your wealth in hard assets, precious metals etc.. Depending on your own individual situation, getting a second passport or even a foreign bank account (that is, outside the US) might be viable options. Nobody knows how bad it will get, but if you do not act now, you might never be able to, or it will be much harder.

Post your thoughts below.