Wednesday, September 28, 2016

Dedicated to "Anonymous"

William Engdahl is right to point out the "similar yet slightly different" continuing motivation for US interests in the middle East. At one time it was solely oil, and many still cling to that idea. But now natural gas (for Europe and many tankers modernized to run on natural gas) is a large part of the prize. I mentioned this some 20 months ago, but the currency aspect of the existing system remains the same: competition for the currency that gets used the most to purchase oil and natural gas.

So today, we could modify (in parentheses) Another's statement about the dollar system:
Today, all currencies are traded against the dollar for it's usage as a medium of oil (and natural gas) exchange! Take away that link and the entire currency / debt exchange system, as we know it will collapse! The US$ must be maintained as the "most used" if the other currencies are to have a chance to survive.
A small change, but over time things do change, as technology allows. What does not change is what was mentioned in the last post. You will never hear our politicians publicly debate about the dollar system, or strong dollar policy, or the "exorbitant privilege" of our US debt, because the dollar system creates vast wealth for the 1% and reduced opportunity for the 99%. Buy a million dollar dinner plate at a White House gathering next year and the topics of discussion will change indeed.

Make no mistake, China would hope for the Yuan, and Russia would hope for the Ruble to be the "currency of choice" for trading oil, natural gas and gold (among other items of real world wealth not represented by debt) but the BRICs would settle for the SDR to assume that role, insomuch as a more equitable representation of equity based wealth backs the SDR.

Such are the baby steps toward an equity based system. As Another posited that gold would never serve as the preferred "currency" for the oil (and related true wealth) trade, that remains true today. And it remains true that GOLD is still the ultimate "currency regulator" by which to measure a currencies value against true wealth.

That is to say that when a certain declining nation's debt issuance fails to bail out it's own debt to the world, it will not be the dollar that is traded against for usage. Take away that link and the entire dollar-centric FX regime as we know it will collapse.

Our politicians will talk of "debt" in terms the little people can understand and relate to, but which are completely irrelevant to the larger default ahead. It is preposterous to talk of other countries (and NATO) owing us their fair share of "millions" denominated in our own dollars, especially when we are issuing trillions to cover systemic (derivative) losses.

Still, if the world would accept it, the show could go on long past my lifetime and yours. The world will not. Derivative cyber-warfare may soon make its mark toward global systemic change.


  1. "as we know it will collapse" Yeah. Another and FOA too, "knew"... For anyone who sold gold stocks in 2014 and 2015 in order to buy "physical", opportunity cost is staggering... Thank god I kept "some" gold and silver stocks "for the kick"... FOFOA's advice has been less than stellar, and his apostles seem to not realize that the IMFS may take several years to go down. Sorry for the rant, but I - right now - would be SO MUCH better off had I never discovered FOFOA's blog that it's painful to endure. :-) If gold is not revalued in the next few years, this will have been my biggest blunder. (And I'm the only one to blame.)

    1. Another and FOA were wrong because they didn't know America had become a criminal state.


    2. Anonymous,

      It's going to happen sooner than you think.

    3. VITW -- If you liked that fiction, you will love this one:

      Not saying it won't happen some day... but thinking it must happen "soon" can be dangerous to your financial health.

    4. Anonymous,

      I'm old, and I can tell from your limited time horizon that you are young. My grandfather was born in Oklahoma in 1885. He always said, "Paper ain't money." If you have ever been to a third world country, you might have some idea what the United States was like during the Great Depression, and what it's going to be like again in a few months. So stack up bundles of federal reserve notes if you want, they will always be useful for starting campfires.Good luck with your financial health, you're going to need it.

    5. Holding physical gold is not for everyone. I wish you all the best.

  2. Each successive commercial empire has abused their "exorbitant privilege" in order to mollify their various constituencies with bread and/or circuses, which inevitably leads to a debased currency and the loss of purchasing power of the "Giants" most liquid asset (currency). It appears that the SDR and the issuance of "SDR denominated bonds" is an attempt to create a alternate vehicle for liquid assets separate from any particular nation before the inevitable collapse of the separate individual national fiat currencies which are currently being used for world trade.

    1. The world hedges its bets accordingly ;0)