Category Archives: de-dollarization

Very Short Observations III

US decertification of the Iran nuclear deal is very unwise. It has given big momentum to two movements in the world: the dollarization of the world, and, ironically, the isolation of the US, (instead of Russia). In 2014, President Obama imposed sanctions on Russia because of the Ukraine and Crimea returning to Russia of its own volition, and made the claim that Russia  would face isolation; never happened.

The US imposed severe sanctions on Iran. The EU followed. But despite these sanctions, Iran grew stronger, and is the dominant regional power, along with Turkey. Iran with Hasbollah of Lebanon and Russia is enabling Assad of Syria to win. ISIS is being defeated in Iraq and Syria; Israel is in a panic. Israel insists something must be done about Iran; will the US be induced to attack Iran?

The Ukraine is on the verge of rebellion. Misha Shalikashvilli, ex-president of Georgia and ex-governor of Odessa, is leading the charge; things remain to be seen. Ukrainians in general want to be with Russia, as well Byela Rus, Kazakhstan, and other republics of the former USSR. It is only matter of time before the armed forces join the people in the streets of Kiev and overthrow Poroshenko.

In the Middle East, a huge alliance is forming: Turkey, Iran. Iraq, Hesbollah of Lebanon, Yemen. Pakistan is drifting towards the Alliance. The Pakistani contribution to the Alliance will be nuclear. China is a strong ally of Pakistan. Turkey is definitely drifting away from the US, as is Pakistan.

It is possible that the US will lose the Middle East; only Israel will remain. The US is moving into Africa, especially former French Africa. It is rich in minerals such as uranium, gold, iron, copper, etc.; it is also rich in hydrocarbons. Losing four military personnel in Niger is no accident. The reality is that the US is involved in all of Africa. The idea is to prevent Africa from falling under the influence of China, ” the One Belt, One Road” system.

China is introducing  the “Petro-Yuan System” in the oil trade. This could be a very severe blow to dollar domination. Venezuela, Iran, Russia, others will participate in Petro-Yuan System. De-dollarization is accelerating. Many a US politician has said:” We will protect our way of life whatever it takes.” In other words, de-dollarization will not be allowed to succeed. Good reason to have a war.

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The Dollar Armageddon

The essential plan of the West is total domination of the Earth, which would result in the flow of all natural resources and all natural wealth to the International Community of the West from the rest, as was done under Colonialism. This new phase of exploitation is being carried out under the banner of Globalization. The Anglo-Americans, the British Empire and the US, were the organizers of the new financial system in 1944 at Bretton Woods, New  Hampshire, US., today known as the Bretton Woods Agreement. The chief players were John Maynard Keynes of the UK, Harry Dexter White, and Henry Morgenthau Jr. of the US Treasury.

The Anglo-Americans realized that the Colonized World wanted to be decolonized and independent, and since they could not prevent decolonization, they decided they could slow it down and install their own puppets. Any new leader who rebelled against Western control would be overthrown or even killed. Winston Churchill proclaimed the Cold War against the USSR in 1947 in Fulton Head, Missouri, USA. Patrice Lumumba of the Belgian Congo comes to mind. He was impaled and killed in 1961.

Globalization began. Beautiful phrases, such as “Food for Peace” programs were used to entrap  newly independent states. Foreign Aid was used not to help but to enslave. The International Monetary Fund{IMF}, and the World Bank were the chief agents of debt enslavement.The Cold War was in full swing.

Despite the massive destruction of the USSR caused by the German invasion in the Second World War, the basic living standard of the Soviet Union was higher than that of the US.  Housing was tight, and families lived together in cramped quarters because of the war destruction, but the Soviet People had jobs, free education, free health care, one month vacation, and one year maternity leave with pay. Public transportation was available. Just compare the metro systems of the two countries in the nineteen fifties. Basic consumer goods were available, but an abundance of consumer goods was not. The Soviet People had job security and a sense of serenity which was not available to the West.

Western policy makers decided to push three things on the world: abundant consumerism vs socialist austerity, wide spread debt at home and abroad, and world-wide militarization as exemplified by NATO, SEATO, and CENTO*; in other words globalization. US banks and corporations were everywhere. American Culture, food, and military bases were everywhere; the US was omnipotent. Credit cards were introduced in the 1960’s. (Remember the commercial for American Express? “Don’t leave home without it.”) Western corporations yearned for profit and huge profits were associated with cheap labour. Western factories were moving East to China, when China opened up in 1979, and to other countries of the East and South as well.

Wages in the US were deteriorating for the working class since the early sixties of the last century, but the US corporation has been doing great. In the 18th and 19th centuries Western corporations were moving slaves from Africa to the plantations of North America, the West Indies, and South America. In the latter half of the 20th Century and the beginning of the 21st Century, corporations have been moving their plantations, factories, to the slaves. 95% of Americans today belong to what I call the Precariat Class, a totally dispossessed economic class.

In 2016, Americans still don’t have tax based universal health care, no free education of superior quality, no affordable housing, no public transportation, and outright home ownership is only around 11%. No wonder Americans are angry, and this is why Donald Trump is winning. The ownership class cannot stop him in an “honest way”, so they will try to stop him either by hook or by crook. Massive demonstrations may occur in defense of Trump. Martial law may be imposed, and the presidential election may be postponed or even cancelled.

Economic conditions are no better. Real unemployment is high, anywhere from 20% to 42%. Wages are stagnating. Ninety million Americans are not working. Obesity, a side effect of the American economic system, is in epidemic mode. Sixty six percent are obese and thirty seven percent are morbidly obese. Chronic diseases such as diabetes, hypertension, cancer are rampant. Life expectancy is going down. Basic infrastructure is collapsing. People are over medicated. Grocery stores are full of embalmed, genetically modified food ( but beautifully packaged!). All for profit, and without giving a damn about people or the environment. Just look at Flint, Michigan and their drinking water. The US, the hope of mankind, is becoming a third world country.

The world economy is no better. Much of the world is either in severe recession or depression. The Baltic Dry Index has imploded, with slight improvement lately. World consumption has collapsed, hence massive slowdown from South Korea to Germany. Japan is in perpetual depression. China is slowing down. Latin America, Africa, and South Asia are either in near or full depressions. Canada, Australia, the European Union are either in severe recession or are entering one. The Ukraine is on the verge of exploding. The Middle East is a cauldron that will enlarge. The only area of stability is Russia and the Commonwealth of Independent States. Sanctions against Russia are great blessings in disguise. Import substitution and self reliance are engines of growth and power. Presently, Brazil and Venezuela are being destabilized from outside and inside.

In summary, unnecessary consumption is collapsing world wide. Debt in dollar terms is still growing  but at a snail’s pace. World wide trade is collapsing. Countries with an independent foreign policy such as India, Iran, China, Russia, and others are accumulating gold and shunning the dollar. This is a nightmare for the US. It is quite possible that some obscure company somewhere in the South Asian region will reject trade in dollars, but will accept gold or Chinese yuan. Panic will set in. The dollar could drop by twenty percent in overnight trade. Gold and silver would sky rocket. Trade between the US and the world would collapse. Interest rates in dollars would rise to an unbelievable level, but would not help the dollar. The US could not import anything with its currency, but only with gold or some foreign currency which was convertible to gold. The Armageddon of the dollar is coming. The ownership elite of the US will know for the first time in its history what it’s like to actually work for a living rather than living off the suffering and labor of others. My analysis is very, very correct and true but only time will reveal that.

 

*= NATO: North Atlantic Treaty Organization SEATO: Southeast Asia Treaty Organization

     CENTO: Central Treaty Organization

 

 

 

Will the dollar be defended to the end?

In many  of my previous posts, I have stated that the US Economic System is based on three pillars of paper, and all three of these are based on debt. The three pillars of paper are the dollar, the bond market, and the stock market. Of the three, the dollar is the most important because it is the essence and instrument of US power. In the 1951 film version of Charles Dickens’ short story “A Christmas Carol”, there is a character, Mr. Jorkin, who says: “Control the cash box and you control the world”. The US has been controlling  the world since 1944, when the Bretton Woods Agreement was signed. The dollar became the reserve currency connected to gold at 35 dollars an ounce, and other convertible currencies were connected to the dollar. Nearly all trade and debt was denominated in dollars. Economically and financially speaking the world became dollar centric.

However, the dollar is still connected to gold, because the dollar without gold is like a fish without water. It cannot exist as the Reserve and Official currency of the world. It can only exist as the local currency in the US, because in the US, the dollar is the Legal Tender. The Petro Dollar depends on the whims of OPEC. It is not reliable. Gold, on the other hand, has the full backing of Mother Earth. Gold was created  when the Universe was created, and has the Energy of the Sun. Petroleum can be consumed, but gold cannot be consumed nor destroyed.

For the dollar to be convertible into gold, gold must be available in dollar terms at any price anywhere in the world. If that relationship ceases, the dollar can no longer be the reserve currency of the world. Powerful non Western countries are accumulating gold on the cheap, at around eleven hundred dollars an ounce. In one of my previous posts I stated that gold is leaving the West and going to the rest, especially to the East.

There is a “purpose” to this lunacy. By keeping the, dollar “artificially” strong, the US is destroying the countries of the world which are indebted in dollars. They are further pushed into economic slavery by the International Monetary Fund, {IMF}, and the World Bank. Both banks are agents of the US, despite international sounding names. Indebted nations are in severe depression. They are selling their natural resources for pennies on the dollar. They cannot buy any manufactured goods from China, South Korea, Japan, and Europe, so these regions are slowing down which further puts pressure on commodities. First world countries like Canada, Australia are entering severe recession, if not depression, while counties such as Brasil, Venezuela, Argentina, and others are entering depression. The currencies of these and other countries are collapsing. Russia and China are special targets. These two countries must be destroyed or neutralized for the US to have  total world domination. High Noon is fast approaching.

Russia is the “special” target. Russia has the capacity to be totally self-sufficient as it was during Second World War when it was the Soviet Union.  Germany in 1942 controlled all of  Russia just west of Leningrad, west of Stalingrad. The Soviet Union could not be defeated despite the fact that Germany controlled all of Europe. A similar situation exists today. For the US to control the world it must subjugate Russia. How to do that? Simple: economically. The first stage was to tear the Ukraine from Russia. So far it has not succeeded. The Ukraine is a political, economic, and moral mess. It is on the verge of collapse. When the Ukraine collapses, people will rise up, take over, and join Russia. Nuclear war against Russia is unthinkable for it would mean catastrophe for Humanity and all life on Earth, although the possibility of nuclear war is at its highest ever. The only alternative is economic strangulation.

To strangle Russia you simply have to tear it apart economically. Because of the Ukraine and Crimea, sanctions were imposed by the West and the countries closely associated with the West such as Japan. The Russian currency was attacked and devalued but not destroyed. The oil price was made to collapse  with the help of Saudi Arabia and Gulf Arab States. Military pressure was applied on the president of Syria. Propaganda against Putin was increased. Russia calmly responded; counter sanctions against the West. They are hurting badly. Devaluation of the Ruble is essentially positive, but the low oil price is not. Russia is the number one oil producer in the world and exports two thirds of its oil. There is a cushion of profitability. Russia suffers but will not buckle.

Russia is fighting back. It is avoiding the dollar like the plague. It is signing trade deals with other countries in their respective currencies. It is developing its own SWIFT,or Society for Worldwide International Financial Transfers. It is also developing worldwide tele-communication systems which exclude the West. With the help of Iran and Hesbollah it is successfully fighting ISIS in Syria. Yemeni Houthis have check mated the Saudis in Yemen. The oil price collapse which the Saudis helped to engineer is hurting them economically. Rebellion is brewing in the country. The Shia, in the Eastern Provinces where the oil is, are very restless. Foreign workers and native Sunnis are also very restless. In one of my previous posts I stated that Saudi Arabia will first implode then explode. This will be very negative for the dollar.

China is being courted to let the renminbi join the IMF currency system which would enable the dollar to continue to be reserve currency of the world. China will play the game even though it does not trust the game because it has no choice; it is trapped in the US financial  web. China is trying to extricate itself slowly from this trap. China is buying gold and selling US Treasuries. It is expanding non US trade and aid using the renminbi; the dollar is under attack.

But the US is fighting back. The TPP, Trans Pacific Partnership, was negotiated with some South East Asian and Latin American countries. Japan, Canada, Australia, New Zealand, and Mexico are included. The idea behind the agreement is to consolidate the use of the dollar in trade. A similar agreement is being negotiated with the European Union, the Trans Atlantic Trade and Investment Policy. Will the US succeed in keeping the dollar official currency of the world?Nobody knows.

If the dollar is dethroned, it will be catastrophic for the US. The US will lose the instrument of enslavement. It will no longer be able to exploit the rest of the world through usury. It will no longer be able to finance itself without inflation, followed by hyperinflation. It will no longer be able to maintain military bases in other countries and project its power. The US stock and bond markets may collapse, and the dollar may follow. The people who control America are strong believers in the saying: “It is our way or the highway”. “High Noon” is around the corner. If the US fails, it will become the third world country of North America. In many ways, it already is. Only time will tell.

 

 

 

 

 

How much is the dollar really worth?

The dollar is a fiat currency. It is created out of thin air through debt. A person goes to the bank and wants to borrow 10,000 dollars and if the borrower meets the criteria of paying back the sum plus interest agreed on, the bank issues a cheque of 10,000 dollars or direct deposits the amount to his account. Money has been created out of nothing to enslave that person for 10,000 dollars which he must now pay back at a certain interest rate for a specific period of time. In other words, he sells his labour, his life force, to pay the debt. He is exploited, he is a slave. This is the essence of capitalism, and the fiat currency is an instrument of enslavement.

Initially, the dollar was a gold backed currency as were other world currencies. President Franklin Delano Roosevelt, early in his presidency devalued gold from 20.67 dollars an ounce to 35 dollars an ounce. Also, he made it illegal for Americans to own gold, unless it was in a jewelry form of 18 karats or less. The Bretton-Woods Convention made the dollar the Reserve Currency of the World. The US would keep the gold and the rest of the world would keep the dollars. Other central banks could exchange dollars for gold at 35 dollars an ounce. Gold, however, would be stored in the US and some would be stored in London. This arrangement was propped up by fear that “the Communists” would take over if the gold was not stored in the US. Publicity  made Fort Knox, Kentucky, infamous as the storage place  for the world’s non-communist gold. General Charles de Gaulle, President of France, was not fooled. He realized it was the perfect scam. He had never trusted the Anglo-Americans. He knew how perfidious they were during the Second World War II. The Anglo-Americans hated him, and of course, he reciprocated. He withdrew France from N.A.T.O. and sent French warships to retrieve French gold from the US. Other European countries followed. A run on gold followed…

The gold drain from the US followed. President Nixon closed the Gold window. This closure was permanent, contrary to the President’s statement that  it was temporary. The US was running trade deficits and the Vietnam War was draining the country of its real wealth, gold. The dollar paper drainage was no big deal, because it was only paper. The Arab oil embargo saved the dollar and the US. The US told the oil producers to increase the price of oil but just have it denominated in dollars. The excess dollars of the world poured into US treasuries and helped finance government operation. The decade of 1970’s showcased growth throughout the world but with inflation. Gold was allowed to reach its equilibrium value of 850 dollars an ounce. Silver, taken out of circulation in 1965, went to 50 dollars an ounce in 1979-80. Interest rates were high because demand for money was high. Demand for real money, gold and silver, was high. But the dollar was losing value. In 1969, one could get four Swiss Francs for one dollar, but in 1979-80 period, the Swiss Franc was on parity with the dollar.

President Carter appointed Paul Volcker Chairman of the Federal Reserve Bank. The Prime Rate went to almost twenty percent. The price of precious metals collapsed and value of the dollar rose. Money from all over the world poured into the US. By 1992, the USSR and communism had disappeared in Europe. The end of history was proclaimed. The plunder of the ex-USSR and Eastern Europe, along with the rest of the world began with increasing tempo. A unipolar world of ten years duration was achieved. In Nature, when one extreme is reached, opposite forces start building momentum, and new forces started brewing on the horizon…

Vladimir Putin was appointed Prime Minister of Russia in 2000, and the economic decay started in the first decade of the New Millennium in the West. It is now worsening and encompassing the entire world. The central player in all this has been the dollar. It has no intrinsic value like gold, land or water, but is the instrument of US power. The US wants to maintain that power come hell or high water, and in order to maintain it, debt in dollar terms has to grow. The IMF and World Bank, along with other private organizations, are working overtime to trap more and more countries into unsustainable debt and milk them for all they are worth. This is the MODUS OPERANDI of capitalism…

But opposing forces are rising, and the de-dollarization of the world has began. The World is trying to dis-infect itself from the dollar. Very interesting and dangerous times are approaching. But the US will not willingly give up its instrument of power. It is negotiating trade deals with Europe, South America, and South East Asia to insure the dollar to be the supreme currency. It is confronting China in the South China Sea, but at the same time, it is enticing  it to join the IMF arrangement of Special Drawing Right Currency. The US wants the China to row the dollar-SDR boat, and the US would steer it. Whether China falls for it or not remains to be seen. China, Russia, Brazil, Iran, and other countries that have backbone are trading amongst themselves in their own currencies. The river of history is flowing and it cannot be reversed.

How much is the dollar really worth? Nothing. It is merely an instrument of power, intimidation, and war, like aircraft carriers. And history will be unkind to both. Only time will tell.

The collapse of the present economic structure is inevitable.

The collapse of the present economic system is inevitable and cannot be prevented despite all the efforts of the individuals that run and benefit from the system. A system based on lies and deceptions cannot last. It cannot be sustained. As I mentioned in one of my earlier posts,the US economic system and power is based on three  pillars: paper, the dollar, the bond and stock markets; all three are based on debt denominated in US dollars.

Many people in the know  think that the weakest pillar of the three is the dollar, but that ain’t necessarily so. Remember, the dollar is essentially the official currency of the world. Most  financial transactions are done in dollars. Most of the world’s debt is held in dollars. Also,most of the drug  trade,prostitution and pornography are transacted in dollars. In other words,most economic human activity is  carried out in dollars. In addition, countries that have trade surpluses hold their reserves in dollars. De-dollarization is taking place all over the world, but the process has been slow. It may accelerate in the future, but the future has not yet arrived. The dollar is good for at least two, if not, five years. Five years in economic terms is a long time. Still, many people and countries are moving towards the exits…

US Treasuries are connected with the dollar policy. Treasury bonds are debt issued  by the US Government for its operation. The claim is made that it is as good and safe as gold. Each individual should decide for herself or himself. Foreign governments are parking their dollar reserves in US treasuries. Narco money is also parking its money in US Treasuries. Many important counties are divesting themselves of Treasuries and investing in the ultimate money, which is GOLD. The process is slow but it will accelerate in the future, but the future has not arrived.

The third pillar of paper is the stock market. The US Stock Market is Casino Royale and can close and collapse any moment. The future of the world will be decided on Wall Street. If Wall Street collapses suddenly it would be an earth shaking event, the kind that happens only once or twice in a millennium. It may also be slow process of decay. Which ever process takes hold or if a mixture of the two, it will ultimately be catastrophic. The US Government and the Federal Reserve  will try  their best but will fail, because the energy entering the economic system is decreasing and will go to its equilibrium level whose depth is unknown. It will be known in due time. The Economic System which is blindly venerated will no longer be viable. It will collapse from septic financial shock and die. Chaos and long transition will follow. Countries will fragment into smaller units. The US may face fragmentation.People living on the land will do reasonably well. The Amish will be admired. Only time will tell.