Economic D-Day
Having failed to defeat Iran in 2 weeks like every war ever, yesterday, Treasury Secretary Scott Bessent announced economic D-Day. He called it “Operation Economic Outcast.” In summary, he is threatening any country/entity that trades with Iran with sanctions and removal from the dollar system. The speech and press conference lasted 17 minutes.
In one notable section he said,
“And let me be clear, any entity that facilitates money laundering on behalf of Iran [notable pause] will be removed from the US dollar system. The clock just started ticking. The new sectorial sanctions determinations [sic] issued today target 5 of Iran’s most vital lifelines that it exploits in other countries: Digital assets, technology, gold, aviation, and shipping.”
In response to one question for when this operation might start from an unidentified reporter, he said,
“Again, I’m not gonna set timelines, but we do not have infinite patience here.”
One person in the press who didn’t name himself asked if there would be more bond buy-backs anytime soon.
“Again, we haven’t bought a single bond yet. The next time we have an operation is September 9th. So, we shall see on September 9th.”
The last question was a heater.
Bessent: One more. Let’s see. You in the front.
Unidentified reporter: You described this as an economic D-Day. But D-Day wasn’t a threat of an invasion, and the US didn’t give a timeline to Germany. So why not impose the sanctions today?
Bessent: Well, we are giving everyone the opportunity to remedy bad behavior. Why would I want to blow up the global financial system? We believe that it is important to level set and give people a cure period, but they should know that will move very quickly and that we are serious. Secondary sanctions are a very powerful tool. and we here at Treasury- this is Gene Lane the acting Undersecretary for Terrorism Finance- and in the Terrorism Finance Dept and at OFAC, the reason that we are able to use secondary-sanctions is because we do not take their use lightly. So we believe that a warning shot and a level set of expectations is appropriate. And if people do not want to meet our expectations- then we expect- and they should expect, that they will leave the dollar system.
As the Treasury Secretary walked away from the podium, the same reporter asked, “Why not take these actions 6 months ago? Before the war started?”
I guess we’ll see if economic D-Day is September 9th, 2026.
