06-18-2024, 09:01 PM
The Downfall of the Dollar and the Global Monetary Transition
By Gary D. Barnett
June 17, 2024
“I have good news and bad news. The good news is we will all soon be billionaires. The bad news is that by the time that day comes, the dollar will be so devalued that your billions may not purchase your weekly groceries.”
~ Jarod Kintz, A Memoir of Memories and Memes
There is a bit of important news that is being hidden, covered up, and ignored by most, especially by the controlled mainstream media. Yes, Saudi Arabia did fail to renew the ‘petrodollar’ deal struck with the U.S. decades ago, but what does that really mean, and why now? As I continually say, nothing is done by the State accidentally, nothing is a coincidence, as all is either planned far in advance, or a reaction to some agenda-driven plot. That is why it is imperative to believe nothing, and question everything concerning the State. It is no different with monetary policy, as currency domination is a mainstay of power and control, and the weaponization of the dollar will lead to dramatic changes in the power-play of nations.
It is obvious, although rarely understood by the economically ignorant, which are most of the masses today, that ‘money’ (currency) is still the dominant factor of governing control. In the face of constant political terror and war at every level being inflicted on societies, this is often forgotten, but why is it so misunderstood given that big banks, and banking entities, including all large ‘investment’ houses and the central banks, rule the world? The U.S. has held the top position concerning the control of commerce and trade due to its dollar hegemony, for at least the past 50 years, but things are changing, and the reasons are not limited to money printing and debt, as there is a much a more complicated conspiracy underlying this global monetary transition.
The talk of a one world governing system, a “great reset,” and a digitized world, have more to do with this assumed abandonment of the dollar as the single reserve currency, than is being discussed. While the U.S., due to its monetary position over the last many decades, has been threatening countries around the globe with sanctions, implementing and enforcing those sanctions; acts of war all, and protectionism to be sure, the strengthening of other economies have continued to expand. Add to this situation the massive monetary expansion in the U.S., with debt reaching unheard of limits, one must pause and consider all the options and intent of the most powerful players. Are they working independently or together in this effort to restructure all economic activity?
I think it assured at this point that the dollar is on its way out, and this will cause, whether in the very near term, or over the next few years, a dramatic change in the economic health of Americans, leading to more currency creation, higher interest rates, massive inflation causing a continuous rise in the prices of all goods and services, a dollar that will lose value at an alarming rate, and of course, this could lead to the inability of most to survive unscathed by this monetary carnage. In fact, it could cause extreme civil unrest, violence, and bring monumental chaos to the streets throughout the country. If (when) this happens, it will have been by design.
In addition, this transition will effect absolutely everyone, possibly with the exception of the very wealthy and super-rich, many of whom reside in the banking cartel system who are causing the economic pain. That leaves the peons on the chopping block of economic disaster, but then, what ruler or ruling class cares one iota about the cattle class of people? This fits in nicely with the depopulation and genocidal efforts being pursued with aggressive abandonment by the governing bodies around the world, all with little if any concern for any in the proletariat ranks.
What is the end goal of this plot against humanity? Why would U.S. ‘officials’ of the ruling cabal purposely seek to destroy the economy that made them wealthy beyond imagination? One has to think outside the box for a moment in order to understand the idea of intentional destruction in order to gain total control. We live in a world bent on globalization with technocratic rule by the few over the many. But the many, will likely be whittled down dramatically in order to become more manageable. This tactic also greatly benefits all those who will remain at the top of the power pyramid. Those positions are sought certainly by many in the U.S., but also include China, Russia, Israel, the U.K., much of Europe, and the rest of the BRIC’s nations as well. This seems to be a shift from West to East, but what if it is a coordinated effort by all the big players around the world to gain a seat at the table of ultimate power?
One major aspect of this plot, actually the main aspect, is the implementation of digital currencies managed from central banks and centralized economic centers, so as to obtain control over all assets. The digitization of all societies is key in any effort to not only gain total control, but to guarantee the sustaining of that system. Certainly mass surveillance is vitally important, but that is already well underway, as digitization of everything is sought by the most powerful. Once this system is more entrenched, the more difficult it will be to dismantle. Actually, once complete, and globally administered, it will be virtually impossible to erase.
If one listens carefully, it will become obvious that blame will rest on the many parts of this planned takeover of society, certain individuals or countries, and the big picture will be ignored. Currently, a few are concentrating on Saudi’s abandonment of the dollar, but do not be too quick to concentrate only on this single event, and look deeper into the abyss to find the truth. How many of these major players are working together? Will Saudi temporarily soften their position given lucrative incentives in the form of military protection, weapons, and other bribes meant to extend the status quo just long enough to build the world governing digital platforms? Yes, the dollar is pretty much finished, at least in time, but is the alternative sought the reasoning behind all the hyperbole?
The failure of the current governing systems in favor of a more widely concentrated and much more powerful system based on total compliance and control, are already baked into the cake. This should be brutally obvious at this stage of the game. It is now just a matter of putting all the pieces in place, so that a transition can occur with the least amount of pushback by the plebs. This requires a complete breakdown of the current system, which can be achieved through multiple ‘catastrophes’ happening all at once, driving the masses to beg for their own servitude in order to avoid starvation, lack of energy sources, communications breakdowns, threats of bioweapon releases, feigned medical ’emergencies, fake ‘viruses,’ economic devastation, manufactured weather anomalies, and every other type of false flag or generated crisis possible foisted on the people at once.
In the midst of all this chaotic hysteria lies the bogus and ludicrous presidential election insanity, taking place in just 5 months; an event that could shake this country into chaotic hell. Again ask yourselves; is this not meant to purposely tear apart this country in favor of bringing in the new global system of rule?
The incredible speed at which this country is sliding into complete dystopia is mind-boggling. Many seem to think things have calmed somewhat, and that new rulers promising the world, will deliver on some of their ‘propaganda;’ a pipe dream out of fantasy land to be sure. The only way out of this mess the people have voluntarily allowed to happen, is to eliminate the main problem. That problem is government in any form, regardless of the stupefying rhetoric being spewed by any and all in the mainstream and most of the alternative media.
Great pain and suffering are coming one way or another, but it would be best to eliminate the source and take the proverbial medicine now, instead of losing all hope for a better world at the hands of these wicked monsters who now control humanity through governmental systems that only exist to own and control all. Eliminate, exterminate, and abandon all forms of rule, or be prepared to die, leaving the very few left to serve their masters from their position as slaves to the State. This is what awaits those who accept rule, and shun freedom.
“Only a psychopath would ever think of doing these things, only a psychopath would dream of abusing other people in such a way, only a psychopath would treat people as less than human just for money. The shocking truth is, even though they now have most if not all of the money, they want still more, they want all of the money that you have left in your pockets, they want it all because they have no empathy with other people, with other creatures, they have no feeling for the world which they exploit, they have no love or sense of being or belonging for their souls are dead, dead to all things but greed and a desire to rule over others.”
~ Arun D. Ellis, Corpalism
https://www.lewrockwell.com/2024/06/gary...ransition/
Saudi Arabia Drifts Away from Washington and the Dollar
By Ryan McMaken
June 17, 2024
Earlier this week, those of us who follow news about the US dollar’s global status noticed numerous claims that the US-Saudi petrodollar agreement had “expired” and that the Saudis would now sell oil for many currencies other than dollars. Some versions of the story even claimed the Chinese yuan would replace the dollar.
The reports appear to have originated either in India or in publications that cater to crypto investors. Fervor over the story was large enough that economist Paul Donovan at UBS felt the need to clarify that there have not actually been any big, new developments in Saudi-US currency relations.
It now seems clear that these reports of an alleged formal petrodollar “contract” did indeed get several key facts wrong. First of all, the Saudis’ turn toward embracing currencies other than dollars is not new. Moreover, there is no known formal treaty or contract between the US and Saudi Arabia—least of all one with an expiration date.
One could reasonably argue, however, that these reports of the decline of the petrodollar are only wrong in their particulars. The reports do reflect a real-world trend, however, and that’s likely why the stories about the end of petrodollar may seem plausible to many. The Kingdom of Saudi Araba (KSA) has been increasingly moving further away from the US orbit in recent years, and this is reflected in an increased willingness to settle oil deals in non-dollar currencies. There are also other indications that the Saudis are more and more willing to embrace Washington’s adversaries—such as China and Iran and Russia—in spite of Washington’s objections. While short run changes may seem minor, the current trend in US-Saudi relations points to an overall and significant decline in US global influence.
What Is a Petrodollar?
So, what is this petrodollar “deal” that is under threat? It’s an informal deal—dating from 1974—between the US and Saudi Arabia under which the Saudis agree to sell oil only for dollars. The deal also stipulates that the Saudis will invest their excess dollars in US Treasurys. Why does this deal exist? From the American perspective, the deal helps to prop up the US dollar. It is not a coincidence that the deal dates form the early 1970s in the wake of the 1971 Nixon Shock and the closing of the gold window. Moreover, the deal maintains a ready market for ever-growing amounts of US Treasurys as federal deficit spending continually grows.
When the Americans conceived of the petrodollar arrangement, the KSA was the largest oil-producing country and a dollars-only trade ensured continued prestige for the dollar. For the Saudis, this close relationship brings certain implied security guarantees from Washington. That is, the Saudi regime knows that so long as it remains an important component of dollar policy, the US will intervene militarily, if necessary, to ensure the continued existence of the Saudi state.
New Threats to the Petrodollar System
Over time, however, geopolitical realities evolve and Saudi willingness to engage in non-dollar oil trades finally became a publicly-stated policy of the KSA regime in January 2023. As we reported here at mises.org last year, the Saudi finance minister stated that “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal.” At the time, this was indeed a new development, and it was the end of a multi-year period during which there were persistent rumors that the Saudis would move away from the dollar. In 2019, for example, Arab News reported that Riyadh “has rejected the suggestion that it is considering selling oil in currencies other than the traditional US dollar.” By 2023, things had apparently changed.
Further changes in Saudi policy continued throughout the year. In mid-2023 the Saudis began to import record levels of fuel oil from Russia, further solidifying trade relations between the two countries. Given how Washington has attempted to cut Russia out of the dollar economy, growing trade between the Russians and the Saudis further drives a need for trade in currencies other than dollars. Then, in November of 2023, The KSA and Beijing signed a currency swap agreement designed to “expand the use of local currencies”—i..e, non-dollar currencies.
Breaking Free of the US Axis
Taken by themselves, these developments might seem like no big deal. After all, the Saudi riyal currency is still pegged to the dollar—for now. Taken in the larger context, however, these recent developments illustrate how the Saudis are moving away from the established monetary and geopolitical order that the US has imposed on nearly the entire world since the end of the Cold War.
In March of 2023, the Saudis participated in a China-brokered deal to re-establish diplomatic relations with Iran. The KSA had long been at odds with the Iranian regime as the two states vied for dominance in the Persian Gulf region. Naturally, Washington has encouraged the Saudis to help the US isolate Iran. Although the US publicly praised the China-brokered deal when it became public, the deal is clearly a blow to US influence in the region. Moreover, if there is any doubt that Washington privately disapproves, we need look no further than the fact the Israeli regime opposed the deal.
Six months later, a September 2023 report from the foreign policy think-tank Stimson concluded that Saudi movements away from the dollar were not mere bluffs from Riyadh. They were, rather, part of a larger diplomatic effort by the Saudis to gain more flexibility in dealing with major global powers like the Chinese and the Russians. Or, as the authors put it, the “Saudis are demonstrating that they have other options in the new multipolar world order.”
From the Saudi perspective, the US has provoked Riyadh’s disenchantment with its American “partner.” US criticism of the Saudi regime over the Jamal Khashoggi murder and the Saudi blockade of Qatar have not been forgotten in Riyadh. Moreover, some members of the US Congress continue to publicly raise uncomfortable questions about the Saudi regime’s connections to the 9/11 attacks. The fact that the Washington foreign-policy establishment mostly looks the other way on frequent human rights abuses in Saudi Arabia—while selling immense amounts of arms to the Saudi regime—is not enough to keep the Saudi regime complacent.
Other recent developments suggest this trend isn’t going away. For example, after receiving an invitation to the G-7 summit for the first time ever, the Saudi regime declined the invitation with Crown Prince Mohammad bin Salman claiming that he had to personally oversee Hajj pilgrimage activities in Mecca. Days later, the Crown Prince was nonetheless sure to send his foreign minister to Nizhny Novgorod in Russia for this week’s BRICS summit.
High-level personnel in Riyadh can apparently make time for BRICS—which Saudi Arabia has been invited to join, and which has become a de facto anti-US bloc—but not for the G-7.
The cooling relationship between Riyadh and Washington does not prove there will be an immediate and major change to the dollar economy or to the US’s continued dominance in the Middle East. The trend is nonetheless continued evidence of an ongoing relative decline in US control over global currency markets and the geopolitical order.
https://www.lewrockwell.com/2024/06/ryan...he-dollar/
Russia’s View on Gold
Published in Vedomosti, the Moscow business paper in December 2022, Glazyev’s views are very relevant today given Russia’s presidency of BRICS. There follows a translation of his article.
By Alasdair Macleod
June 18, 2024
It is now eighteen months since Sergei Glazyev, Commissioner for Integration and Macroeconomics within the Eurasian Economic Commission, disclosed his views on gold and its economic value. Undoubtedly, his opinion carries weight not only with President Putin to whom he is very close, but he also influenced Russian proposals for a new trade settlement currency for BRICS which failed to make the Johannesburg agenda last August.
Published in Vedomosti, the Moscow business paper on 27 December 2022, Glazyev’s views are very relevant today given Russia’s presidency of BRICS which commenced on 1 January. We should regard it as the background behind the formulation of a new BRICS and SCO trade settlement currency which will almost certainly make the agenda at the major BRICS meeting scheduled for 22—24 October in Kazan. Glazyev clearly understands the importance of securing the rouble’s value to gold, which is bound to inform his thinking with respect to the trade settlement currency proposal. I shall be writing about this and other geopolitical factors for my Substack subscribers later this week.
There follows an English translation of Glazyev’s article in its entirety.
Golden rouble 3
A severe sanctions blockade created the necessary prerequisites for the reversal of Russian foreign trade by 180 degrees. The main foreign economic partners were the countries – members of the EAEU, China, India, Iran, Turkey, the United Arab Emirates, etc. And with each of these countries, the Russian Federation has a surplus in the trade balance. According to a preliminary assessment by the Bank of Russia, in January – September 2022 it strengthened to $ 198.4 billion, which is $ 123.1 billion more compared to the same period last year. This surplus was taken out of the country (while half went to pay off the external debts of Russian companies with their replacement with internal rouble lending) and is reflected in the balance of payments line item “net capital exports”.
In friendly countries, there is a process of de-dollarization, and the share of settlements in soft currencies is growing. In September, Russia became the third country in the world in terms of the use of the renminbi in international settlements. According to the Central Bank, in recent months, the trade in the renminbi accounts for up to 26% of foreign exchange transactions in the Russian Federation. The yuan/roubles pair on the Moscow Exchange has repeatedly overtaken the dollar and euros in terms of daily trading. When used in foreign trade calculations of the Russian Federation, renminbi, rial, etc. and the presence of a trade surplus, the result is the accumulation of multibillion dollar cash balance equivalents on the accounts of Russian exporters in soft currencies in banks of the above partner countries.
The accumulation of funds in soft currencies will further increase. But since this money is also subject to exchange rate and possible sanctions risks, there is a need to sterilize its excess mass. The best way is to buy non-sanctioned gold in China, the United Arab Emirates, Turkey, possibly Iran and other countries for local currencies. Gold purchased by the Russian Central Bank can be stored in gold and foreign exchange reserves, within certain limits in central banks of friendly countries, and can be used for intercountry settlements, currency swaps, and clearing operations. Part of the gold can be repatriated to Russia.
Russia’s transition in relations with friendly countries to trade in national currencies is a true tactical solution, but not strategic. If pricing continues in dollars on Western exchanges and trade flows are insured by English companies, then there is no real isolation from the western “curve mirror” derivative pricing systems.
In conditions of unprecedented sanctions pressure, the task of Russia is not to learn how to play according to the “curve rules” of the West, but to build transparent and mutually beneficial rules of the game with friendly countries, create your own pricing, exchange trading, and investment systems. And gold can be a unique tool to combat Western sanctions if you recalculate the prices of all major international goods (oil and gas, food and fertilizers, metals, and solid minerals). The fixation of the price of oil in gold at the level of 2 barrels for 1g will give a 2-fold increase in the price of gold in dollars, Zoltan Pozar calculated the strategist at Credit Suisse. This would be an adequate response to the “price ceilings” that the West introduces, — a solid foundation. And India and China can take the place of global commodity traders instead of Glencore or Trafigura.
Gold (along with silver) for millennia was the core of the global financial system, an honest measure of the value of paper money and assets. Now the gold standard is considered an anachronism. It was cancelled in its final form half a century ago (the United States announced the temporary closing of the golden window, adopted in 1944 in Bretton Woods) tying the dollar to oil. But the era of the petrodollar is ending. Russia, together with its eastern and southern partners, has a unique chance to jump from a sinking ship of a dollar-centred debt economy, ensuring its own development and mutual trade in accumulated and extracted strategic resources.
Gold played an important role in both industrialization and the post-war refusal of the USSR to join the dollar standard. By signing the Bretton Woods Agreements, the USSR did not ratify them, determining the binding of the rouble not to the dollar (which was a condition for participation in the Marshall Plan), but to gold and to “the entire property of the country”. “Golden rouble 2.0” ensured a rapid economic recovery after the war, allowed the implementation of nuclear and missile projects. Reformer Khrushchev cancelled the binding of the rouble to gold, carrying out a monetary reform in 1961 with the actual devaluation of the rouble by 2.5 times and its pegging to the dollar, having formed the conditions for the subsequent transformation of the country into a raw materials appendage of the Western financial system.
Now the conditions for “Golden Rouble 3.0” have objectively developed.
The sanctions imposed against Russia boomeranged on the western economy. The geopolitical instability they provoked, rising prices for energy and other resources, inflation and other negative factors put strong pressure on the global economy, in particular the global financial market. In 2023, all these circumstances will objectively affect the change in the stereotypes of investment policy in the world – from risky investments in complex financial instruments to invest in traditional assets, primarily in gold. According to Saxo Bank analysts, in 2023 increased demand for this metal will lead to it price rising to $3000. As a result, there is a real opportunity in the very near future to significantly increase reserves due to the increase in physical volumes of gold, and revaluation of its value.
Large gold reserves allow Russia to pursue a sovereign financial policy and minimize dependence on external lenders. The amount of reserves affects the country’s reputation, its credit rating and investment attractiveness. Large reserves allow you to plan the state budget for a long time, buying off many economic and political risks. In 1998, the lack of sufficient international reserves became one of the causes of the crisis, which ended in default for Russia. Now our country already has large gold and foreign exchange reserves, being fifth in the world (after China, Japan, Switzerland and India) and ahead of the United States. But this is not enough.
In China, which ranks first in gold production, there is a legislative ban on the export of all mined gold. According to the Shanghai Gold Exchange, over the past 15 years customers have taken delivery of 23,000 tons in physical form. India is considered the world champion in gold accumulation. Over the past quarter century, gold has been flowing from West to East through the main hubs (London, Switzerland, Turkey, the United Arab Emirates, and others) with a capacity of 2000 – 3000 tons per year. Did the western Central Banks’ official gold reserves remain in their storage facilities? Or has it all gone through swaps and leasing? The West will never say, and Fort Knox’s audit will not.
Over the past 20 years, gold mining in Russia has almost doubled, while in the United States has almost decreased by half. By dismantling real wealth, the United States has lost its competence and interest in the production and processing of strategic resources (gold and uranium, etc.). The printing press funds the purchase of everything they want.
Gold production, which today barely occupies 1% of Russia’s GDP, may well grow (due to the growth of both production and relative oil prices) to 2%—3% GDP and become the basis for the rapid growth of the entire commodity sector (30% of GDP) and the balance of foreign trade, which so far relies on the fiat currencies and the risks of devaluation and insufficient currency convertibility. Instead, Russia will be able to increase gold production from its three large, already commissioned fields from 330 tons to 500 tons, becoming a world leader in this strategic industry. Bonus: we get a strong rouble, strong budget and — in implementing the advanced development strategy, a strong economy.
https://www.lewrockwell.com/2024/06/alas...w-on-gold/
The Truth About What Is Happening To The Petrodollar
June 18, 2024 by Michael
This month, rumors about the petrodollar have spread like wildfire all over the Internet. Some of what is being said is true, and some of what is being said is false. When other sources were reporting on “the death of the petrodollar”, I was asked why I was not writing about it. Well, the truth is that I was not writing about it because the petrodollar is not dead. It is certainly in trouble, but it is not dead. Today, most oil continues to be sold in U.S. dollars, and most global trade continues to be conducted in U.S. dollars. But that could change as other countries lose faith in our currency. In particular, we will want to carefully watch what the BRICS nations choose to do. 45 percent of the world’s inhabitants live in the BRICS nations, and they have been implementing strategies that are designed to promote their own currencies and reduce dependence on the U.S. dollar. As U.S. relations with leading BRICS nations continue to deteriorate, I would expect that trend to accelerate.
So I am not optimistic about the future of the petrodollar at all.
But what some other sources reported about the petrodollar earlier this month was simply not accurate.
Let me start at the beginning. According to Investopedia, petrodollars are “simply U.S. dollars accepted as payment by an oil exporter”…
Petrodollars are oil export revenues denominated in U.S. dollars. Petrodollars are not a distinct currency; they are simply U.S. dollars accepted as payment by an oil exporter.
Global crude oil exports averaged approximately 88.4 million barrels per day in 2020. That pace would generate annual global petrodollar supply of more than $3.2 trillion a year, assuming an average price of $100 per barrel.
Petrodollars are the primary source of revenue and wealth for many members of the Organization of Petroleum Exporting Countries (OPEC) as well as non-OPEC oil and gas exporters including Russia, Qatar, and Norway.
The fact that so many other countries all over the globe use the U.S. dollar to buy and sell oil is a major advantage to us.
Earlier this month, there was a flood of reports that the “50 year petrodollar agreement” between the United States and Saudi Arabia had expired and that the petrodollar was now dead.
But that wasn’t true.
As Peter C. Earle has accurately pointed out, there never was a formal treaty, there never was a formal expiration date, and Saudi Arabia has been trading oil for other currencies for a very long time…
Last week several reports suggested the termination of a US-Saudi petrodollar agreement, and speculated a Saudi Arabian move to sell oil on world markets in various currencies, including the Chinese yuan. The accounts were rife with inaccuracies: the Saudis’ have transacted in non-dollar currencies for decades, and there has never been a formal treaty, much less with a specified expiration date, governing the loose arrangement that has come to be called the ‘petrodollar system.’
Unfortunately, many of the false reports went viral, and Google searches for “petrodollar” spiked to unprecedented levels…
Almost immediately, Google searches for the term “petrodollar” spiked to the highest level on record dating back to 2004, according to Google Trends data.
But as speculation about an imminent end to the U.S. dollar’s global dominance intensified, several Wall Street and foreign-policy experts emerged to point out a fatal flaw in this logic: The agreement itself never existed.
At least, not in the way it was being described in the posts that had gone viral on social media.
This is why I take my time and do my research before I report something.
It is so easy to be wrong, but it takes real work to develop a reputation for accuracy.
According to UBS Global Wealth Management chief economist Paul Donovan, the false story about the expiration of the petrodollar agreement “seems to have started in the crypto world”…
Paul Donovan, the chief economist at UBS Global Wealth Management, in a blog post said that the story had gained unexpected traction, serving as yet another example of the dangers of “confirmation bias.”
“The story seems to have started in the crypto world. Many crypto speculators desperately want to believe in the dollar’s demise,” said Donovan.
It is true that a “Joint Commission on Economic Cooperation” was established in 1974.
Originally it was only supposed to last for five years, but it was “repeatedly extended”…
The agreement referred to by Donovan is the United States-Saudi Arabian Joint Commission on Economic Cooperation. It was formally established on June 8, 1974, by a joint statement issued and signed by Henry Kissinger, the U.S. secretary of state at the time, and Prince Fahd, the second deputy prime minister (and later king and prime minister) of Saudi Arabia, according to a report found on the Government Accountability Office’s website.
The agreement, as initially envisioned, was intended to last five years, although it was repeatedly extended. The rationale for such a deal was pretty straightforward: Coming on the heels of the 1973 OPEC oil embargo, both the U.S. and Saudi Arabia were eager to flesh out a more formal arrangement that would ensure each side got more of what it wanted from the other.
At that time, the U.S. and Saudi Arabia very much needed one another.
Today, circumstances are quite different.
The U.S. is now much less dependent on foreign oil, and the Chinese have become one of the primary purchasers of oil from the Middle East.
Over time, more oil will be bought and sold in other currencies, but for the moment it is pretty much business as usual…
Oil has always traded in non-dollar currencies. In January 2023, Saudi indicated it was happy to negotiate oil sales in other currencies. The possibility changes little for financial markets. Saudi Arabia’s riyal remains pegged to the dollar, and its stock of financial assets are dollar focused. The dollar’s reserve status depends on how money is stored, not how transactions are denominated.
However, as I noted earlier in this article, we need to keep a very close eye on what the BRICS nations are doing.
Saudi Arabia has been deepening relationships with China, Russia and India, and that is definitely bad news for the U.S. dollar…
Owing to the US and Western Europe’s increasingly entangled alliances, and its own efforts to diversify away from dependence upon energy exports, Saudi Arabia has been increasing its diplomatic and economic engagements with China, Iran, Russia, nations considered primary US foreign policy adversaries. Recent moves toward accepting non-dollar currencies reflects broader geopolitical shifts away from US currency hegemony.
Of course the truth is that if we want to find the biggest enemy of the U.S. dollar all we need to do is to look at ourselves.
The rest of the world is rapidly losing faith in our currency because of what are own leaders are doing to it.
The U.S. dollar is no longer a stable currency. We are creating, borrowing and spending trillions upon trillions of dollars, and if we continue to act with such extreme irresponsibility everyone else will eventually be forced to switch to new reserve currencies.
According to USdebtclock.org, our national debt will hit 46 trillion dollars on this day in 2028 if we continue to borrow money at the rate we are right now.
That is madness.
We are literally committing economic suicide, but most of the U.S. population is not interested in such warnings.
They just want our leaders to keep flooding the system with more money so that the party can continue.
Yes, the party will continue for a little while longer, but once the lights are finally turned off nobody will ever be able to turn them back on again.
http://theeconomiccollapseblog.com/the-t...trodollar/
By Gary D. Barnett
June 17, 2024
“I have good news and bad news. The good news is we will all soon be billionaires. The bad news is that by the time that day comes, the dollar will be so devalued that your billions may not purchase your weekly groceries.”
~ Jarod Kintz, A Memoir of Memories and Memes
There is a bit of important news that is being hidden, covered up, and ignored by most, especially by the controlled mainstream media. Yes, Saudi Arabia did fail to renew the ‘petrodollar’ deal struck with the U.S. decades ago, but what does that really mean, and why now? As I continually say, nothing is done by the State accidentally, nothing is a coincidence, as all is either planned far in advance, or a reaction to some agenda-driven plot. That is why it is imperative to believe nothing, and question everything concerning the State. It is no different with monetary policy, as currency domination is a mainstay of power and control, and the weaponization of the dollar will lead to dramatic changes in the power-play of nations.
It is obvious, although rarely understood by the economically ignorant, which are most of the masses today, that ‘money’ (currency) is still the dominant factor of governing control. In the face of constant political terror and war at every level being inflicted on societies, this is often forgotten, but why is it so misunderstood given that big banks, and banking entities, including all large ‘investment’ houses and the central banks, rule the world? The U.S. has held the top position concerning the control of commerce and trade due to its dollar hegemony, for at least the past 50 years, but things are changing, and the reasons are not limited to money printing and debt, as there is a much a more complicated conspiracy underlying this global monetary transition.
The talk of a one world governing system, a “great reset,” and a digitized world, have more to do with this assumed abandonment of the dollar as the single reserve currency, than is being discussed. While the U.S., due to its monetary position over the last many decades, has been threatening countries around the globe with sanctions, implementing and enforcing those sanctions; acts of war all, and protectionism to be sure, the strengthening of other economies have continued to expand. Add to this situation the massive monetary expansion in the U.S., with debt reaching unheard of limits, one must pause and consider all the options and intent of the most powerful players. Are they working independently or together in this effort to restructure all economic activity?
I think it assured at this point that the dollar is on its way out, and this will cause, whether in the very near term, or over the next few years, a dramatic change in the economic health of Americans, leading to more currency creation, higher interest rates, massive inflation causing a continuous rise in the prices of all goods and services, a dollar that will lose value at an alarming rate, and of course, this could lead to the inability of most to survive unscathed by this monetary carnage. In fact, it could cause extreme civil unrest, violence, and bring monumental chaos to the streets throughout the country. If (when) this happens, it will have been by design.
In addition, this transition will effect absolutely everyone, possibly with the exception of the very wealthy and super-rich, many of whom reside in the banking cartel system who are causing the economic pain. That leaves the peons on the chopping block of economic disaster, but then, what ruler or ruling class cares one iota about the cattle class of people? This fits in nicely with the depopulation and genocidal efforts being pursued with aggressive abandonment by the governing bodies around the world, all with little if any concern for any in the proletariat ranks.
What is the end goal of this plot against humanity? Why would U.S. ‘officials’ of the ruling cabal purposely seek to destroy the economy that made them wealthy beyond imagination? One has to think outside the box for a moment in order to understand the idea of intentional destruction in order to gain total control. We live in a world bent on globalization with technocratic rule by the few over the many. But the many, will likely be whittled down dramatically in order to become more manageable. This tactic also greatly benefits all those who will remain at the top of the power pyramid. Those positions are sought certainly by many in the U.S., but also include China, Russia, Israel, the U.K., much of Europe, and the rest of the BRIC’s nations as well. This seems to be a shift from West to East, but what if it is a coordinated effort by all the big players around the world to gain a seat at the table of ultimate power?
One major aspect of this plot, actually the main aspect, is the implementation of digital currencies managed from central banks and centralized economic centers, so as to obtain control over all assets. The digitization of all societies is key in any effort to not only gain total control, but to guarantee the sustaining of that system. Certainly mass surveillance is vitally important, but that is already well underway, as digitization of everything is sought by the most powerful. Once this system is more entrenched, the more difficult it will be to dismantle. Actually, once complete, and globally administered, it will be virtually impossible to erase.
If one listens carefully, it will become obvious that blame will rest on the many parts of this planned takeover of society, certain individuals or countries, and the big picture will be ignored. Currently, a few are concentrating on Saudi’s abandonment of the dollar, but do not be too quick to concentrate only on this single event, and look deeper into the abyss to find the truth. How many of these major players are working together? Will Saudi temporarily soften their position given lucrative incentives in the form of military protection, weapons, and other bribes meant to extend the status quo just long enough to build the world governing digital platforms? Yes, the dollar is pretty much finished, at least in time, but is the alternative sought the reasoning behind all the hyperbole?
The failure of the current governing systems in favor of a more widely concentrated and much more powerful system based on total compliance and control, are already baked into the cake. This should be brutally obvious at this stage of the game. It is now just a matter of putting all the pieces in place, so that a transition can occur with the least amount of pushback by the plebs. This requires a complete breakdown of the current system, which can be achieved through multiple ‘catastrophes’ happening all at once, driving the masses to beg for their own servitude in order to avoid starvation, lack of energy sources, communications breakdowns, threats of bioweapon releases, feigned medical ’emergencies, fake ‘viruses,’ economic devastation, manufactured weather anomalies, and every other type of false flag or generated crisis possible foisted on the people at once.
In the midst of all this chaotic hysteria lies the bogus and ludicrous presidential election insanity, taking place in just 5 months; an event that could shake this country into chaotic hell. Again ask yourselves; is this not meant to purposely tear apart this country in favor of bringing in the new global system of rule?
The incredible speed at which this country is sliding into complete dystopia is mind-boggling. Many seem to think things have calmed somewhat, and that new rulers promising the world, will deliver on some of their ‘propaganda;’ a pipe dream out of fantasy land to be sure. The only way out of this mess the people have voluntarily allowed to happen, is to eliminate the main problem. That problem is government in any form, regardless of the stupefying rhetoric being spewed by any and all in the mainstream and most of the alternative media.
Great pain and suffering are coming one way or another, but it would be best to eliminate the source and take the proverbial medicine now, instead of losing all hope for a better world at the hands of these wicked monsters who now control humanity through governmental systems that only exist to own and control all. Eliminate, exterminate, and abandon all forms of rule, or be prepared to die, leaving the very few left to serve their masters from their position as slaves to the State. This is what awaits those who accept rule, and shun freedom.
“Only a psychopath would ever think of doing these things, only a psychopath would dream of abusing other people in such a way, only a psychopath would treat people as less than human just for money. The shocking truth is, even though they now have most if not all of the money, they want still more, they want all of the money that you have left in your pockets, they want it all because they have no empathy with other people, with other creatures, they have no feeling for the world which they exploit, they have no love or sense of being or belonging for their souls are dead, dead to all things but greed and a desire to rule over others.”
~ Arun D. Ellis, Corpalism
https://www.lewrockwell.com/2024/06/gary...ransition/
Saudi Arabia Drifts Away from Washington and the Dollar
By Ryan McMaken
June 17, 2024
Earlier this week, those of us who follow news about the US dollar’s global status noticed numerous claims that the US-Saudi petrodollar agreement had “expired” and that the Saudis would now sell oil for many currencies other than dollars. Some versions of the story even claimed the Chinese yuan would replace the dollar.
The reports appear to have originated either in India or in publications that cater to crypto investors. Fervor over the story was large enough that economist Paul Donovan at UBS felt the need to clarify that there have not actually been any big, new developments in Saudi-US currency relations.
It now seems clear that these reports of an alleged formal petrodollar “contract” did indeed get several key facts wrong. First of all, the Saudis’ turn toward embracing currencies other than dollars is not new. Moreover, there is no known formal treaty or contract between the US and Saudi Arabia—least of all one with an expiration date.
One could reasonably argue, however, that these reports of the decline of the petrodollar are only wrong in their particulars. The reports do reflect a real-world trend, however, and that’s likely why the stories about the end of petrodollar may seem plausible to many. The Kingdom of Saudi Araba (KSA) has been increasingly moving further away from the US orbit in recent years, and this is reflected in an increased willingness to settle oil deals in non-dollar currencies. There are also other indications that the Saudis are more and more willing to embrace Washington’s adversaries—such as China and Iran and Russia—in spite of Washington’s objections. While short run changes may seem minor, the current trend in US-Saudi relations points to an overall and significant decline in US global influence.
What Is a Petrodollar?
So, what is this petrodollar “deal” that is under threat? It’s an informal deal—dating from 1974—between the US and Saudi Arabia under which the Saudis agree to sell oil only for dollars. The deal also stipulates that the Saudis will invest their excess dollars in US Treasurys. Why does this deal exist? From the American perspective, the deal helps to prop up the US dollar. It is not a coincidence that the deal dates form the early 1970s in the wake of the 1971 Nixon Shock and the closing of the gold window. Moreover, the deal maintains a ready market for ever-growing amounts of US Treasurys as federal deficit spending continually grows.
When the Americans conceived of the petrodollar arrangement, the KSA was the largest oil-producing country and a dollars-only trade ensured continued prestige for the dollar. For the Saudis, this close relationship brings certain implied security guarantees from Washington. That is, the Saudi regime knows that so long as it remains an important component of dollar policy, the US will intervene militarily, if necessary, to ensure the continued existence of the Saudi state.
New Threats to the Petrodollar System
Over time, however, geopolitical realities evolve and Saudi willingness to engage in non-dollar oil trades finally became a publicly-stated policy of the KSA regime in January 2023. As we reported here at mises.org last year, the Saudi finance minister stated that “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal.” At the time, this was indeed a new development, and it was the end of a multi-year period during which there were persistent rumors that the Saudis would move away from the dollar. In 2019, for example, Arab News reported that Riyadh “has rejected the suggestion that it is considering selling oil in currencies other than the traditional US dollar.” By 2023, things had apparently changed.
Further changes in Saudi policy continued throughout the year. In mid-2023 the Saudis began to import record levels of fuel oil from Russia, further solidifying trade relations between the two countries. Given how Washington has attempted to cut Russia out of the dollar economy, growing trade between the Russians and the Saudis further drives a need for trade in currencies other than dollars. Then, in November of 2023, The KSA and Beijing signed a currency swap agreement designed to “expand the use of local currencies”—i..e, non-dollar currencies.
Breaking Free of the US Axis
Taken by themselves, these developments might seem like no big deal. After all, the Saudi riyal currency is still pegged to the dollar—for now. Taken in the larger context, however, these recent developments illustrate how the Saudis are moving away from the established monetary and geopolitical order that the US has imposed on nearly the entire world since the end of the Cold War.
In March of 2023, the Saudis participated in a China-brokered deal to re-establish diplomatic relations with Iran. The KSA had long been at odds with the Iranian regime as the two states vied for dominance in the Persian Gulf region. Naturally, Washington has encouraged the Saudis to help the US isolate Iran. Although the US publicly praised the China-brokered deal when it became public, the deal is clearly a blow to US influence in the region. Moreover, if there is any doubt that Washington privately disapproves, we need look no further than the fact the Israeli regime opposed the deal.
Six months later, a September 2023 report from the foreign policy think-tank Stimson concluded that Saudi movements away from the dollar were not mere bluffs from Riyadh. They were, rather, part of a larger diplomatic effort by the Saudis to gain more flexibility in dealing with major global powers like the Chinese and the Russians. Or, as the authors put it, the “Saudis are demonstrating that they have other options in the new multipolar world order.”
From the Saudi perspective, the US has provoked Riyadh’s disenchantment with its American “partner.” US criticism of the Saudi regime over the Jamal Khashoggi murder and the Saudi blockade of Qatar have not been forgotten in Riyadh. Moreover, some members of the US Congress continue to publicly raise uncomfortable questions about the Saudi regime’s connections to the 9/11 attacks. The fact that the Washington foreign-policy establishment mostly looks the other way on frequent human rights abuses in Saudi Arabia—while selling immense amounts of arms to the Saudi regime—is not enough to keep the Saudi regime complacent.
Other recent developments suggest this trend isn’t going away. For example, after receiving an invitation to the G-7 summit for the first time ever, the Saudi regime declined the invitation with Crown Prince Mohammad bin Salman claiming that he had to personally oversee Hajj pilgrimage activities in Mecca. Days later, the Crown Prince was nonetheless sure to send his foreign minister to Nizhny Novgorod in Russia for this week’s BRICS summit.
High-level personnel in Riyadh can apparently make time for BRICS—which Saudi Arabia has been invited to join, and which has become a de facto anti-US bloc—but not for the G-7.
The cooling relationship between Riyadh and Washington does not prove there will be an immediate and major change to the dollar economy or to the US’s continued dominance in the Middle East. The trend is nonetheless continued evidence of an ongoing relative decline in US control over global currency markets and the geopolitical order.
https://www.lewrockwell.com/2024/06/ryan...he-dollar/
Russia’s View on Gold
Published in Vedomosti, the Moscow business paper in December 2022, Glazyev’s views are very relevant today given Russia’s presidency of BRICS. There follows a translation of his article.
By Alasdair Macleod
June 18, 2024
It is now eighteen months since Sergei Glazyev, Commissioner for Integration and Macroeconomics within the Eurasian Economic Commission, disclosed his views on gold and its economic value. Undoubtedly, his opinion carries weight not only with President Putin to whom he is very close, but he also influenced Russian proposals for a new trade settlement currency for BRICS which failed to make the Johannesburg agenda last August.
Published in Vedomosti, the Moscow business paper on 27 December 2022, Glazyev’s views are very relevant today given Russia’s presidency of BRICS which commenced on 1 January. We should regard it as the background behind the formulation of a new BRICS and SCO trade settlement currency which will almost certainly make the agenda at the major BRICS meeting scheduled for 22—24 October in Kazan. Glazyev clearly understands the importance of securing the rouble’s value to gold, which is bound to inform his thinking with respect to the trade settlement currency proposal. I shall be writing about this and other geopolitical factors for my Substack subscribers later this week.
There follows an English translation of Glazyev’s article in its entirety.
Golden rouble 3
A severe sanctions blockade created the necessary prerequisites for the reversal of Russian foreign trade by 180 degrees. The main foreign economic partners were the countries – members of the EAEU, China, India, Iran, Turkey, the United Arab Emirates, etc. And with each of these countries, the Russian Federation has a surplus in the trade balance. According to a preliminary assessment by the Bank of Russia, in January – September 2022 it strengthened to $ 198.4 billion, which is $ 123.1 billion more compared to the same period last year. This surplus was taken out of the country (while half went to pay off the external debts of Russian companies with their replacement with internal rouble lending) and is reflected in the balance of payments line item “net capital exports”.
In friendly countries, there is a process of de-dollarization, and the share of settlements in soft currencies is growing. In September, Russia became the third country in the world in terms of the use of the renminbi in international settlements. According to the Central Bank, in recent months, the trade in the renminbi accounts for up to 26% of foreign exchange transactions in the Russian Federation. The yuan/roubles pair on the Moscow Exchange has repeatedly overtaken the dollar and euros in terms of daily trading. When used in foreign trade calculations of the Russian Federation, renminbi, rial, etc. and the presence of a trade surplus, the result is the accumulation of multibillion dollar cash balance equivalents on the accounts of Russian exporters in soft currencies in banks of the above partner countries.
The accumulation of funds in soft currencies will further increase. But since this money is also subject to exchange rate and possible sanctions risks, there is a need to sterilize its excess mass. The best way is to buy non-sanctioned gold in China, the United Arab Emirates, Turkey, possibly Iran and other countries for local currencies. Gold purchased by the Russian Central Bank can be stored in gold and foreign exchange reserves, within certain limits in central banks of friendly countries, and can be used for intercountry settlements, currency swaps, and clearing operations. Part of the gold can be repatriated to Russia.
Russia’s transition in relations with friendly countries to trade in national currencies is a true tactical solution, but not strategic. If pricing continues in dollars on Western exchanges and trade flows are insured by English companies, then there is no real isolation from the western “curve mirror” derivative pricing systems.
In conditions of unprecedented sanctions pressure, the task of Russia is not to learn how to play according to the “curve rules” of the West, but to build transparent and mutually beneficial rules of the game with friendly countries, create your own pricing, exchange trading, and investment systems. And gold can be a unique tool to combat Western sanctions if you recalculate the prices of all major international goods (oil and gas, food and fertilizers, metals, and solid minerals). The fixation of the price of oil in gold at the level of 2 barrels for 1g will give a 2-fold increase in the price of gold in dollars, Zoltan Pozar calculated the strategist at Credit Suisse. This would be an adequate response to the “price ceilings” that the West introduces, — a solid foundation. And India and China can take the place of global commodity traders instead of Glencore or Trafigura.
Gold (along with silver) for millennia was the core of the global financial system, an honest measure of the value of paper money and assets. Now the gold standard is considered an anachronism. It was cancelled in its final form half a century ago (the United States announced the temporary closing of the golden window, adopted in 1944 in Bretton Woods) tying the dollar to oil. But the era of the petrodollar is ending. Russia, together with its eastern and southern partners, has a unique chance to jump from a sinking ship of a dollar-centred debt economy, ensuring its own development and mutual trade in accumulated and extracted strategic resources.
Gold played an important role in both industrialization and the post-war refusal of the USSR to join the dollar standard. By signing the Bretton Woods Agreements, the USSR did not ratify them, determining the binding of the rouble not to the dollar (which was a condition for participation in the Marshall Plan), but to gold and to “the entire property of the country”. “Golden rouble 2.0” ensured a rapid economic recovery after the war, allowed the implementation of nuclear and missile projects. Reformer Khrushchev cancelled the binding of the rouble to gold, carrying out a monetary reform in 1961 with the actual devaluation of the rouble by 2.5 times and its pegging to the dollar, having formed the conditions for the subsequent transformation of the country into a raw materials appendage of the Western financial system.
Now the conditions for “Golden Rouble 3.0” have objectively developed.
The sanctions imposed against Russia boomeranged on the western economy. The geopolitical instability they provoked, rising prices for energy and other resources, inflation and other negative factors put strong pressure on the global economy, in particular the global financial market. In 2023, all these circumstances will objectively affect the change in the stereotypes of investment policy in the world – from risky investments in complex financial instruments to invest in traditional assets, primarily in gold. According to Saxo Bank analysts, in 2023 increased demand for this metal will lead to it price rising to $3000. As a result, there is a real opportunity in the very near future to significantly increase reserves due to the increase in physical volumes of gold, and revaluation of its value.
Large gold reserves allow Russia to pursue a sovereign financial policy and minimize dependence on external lenders. The amount of reserves affects the country’s reputation, its credit rating and investment attractiveness. Large reserves allow you to plan the state budget for a long time, buying off many economic and political risks. In 1998, the lack of sufficient international reserves became one of the causes of the crisis, which ended in default for Russia. Now our country already has large gold and foreign exchange reserves, being fifth in the world (after China, Japan, Switzerland and India) and ahead of the United States. But this is not enough.
In China, which ranks first in gold production, there is a legislative ban on the export of all mined gold. According to the Shanghai Gold Exchange, over the past 15 years customers have taken delivery of 23,000 tons in physical form. India is considered the world champion in gold accumulation. Over the past quarter century, gold has been flowing from West to East through the main hubs (London, Switzerland, Turkey, the United Arab Emirates, and others) with a capacity of 2000 – 3000 tons per year. Did the western Central Banks’ official gold reserves remain in their storage facilities? Or has it all gone through swaps and leasing? The West will never say, and Fort Knox’s audit will not.
Over the past 20 years, gold mining in Russia has almost doubled, while in the United States has almost decreased by half. By dismantling real wealth, the United States has lost its competence and interest in the production and processing of strategic resources (gold and uranium, etc.). The printing press funds the purchase of everything they want.
Gold production, which today barely occupies 1% of Russia’s GDP, may well grow (due to the growth of both production and relative oil prices) to 2%—3% GDP and become the basis for the rapid growth of the entire commodity sector (30% of GDP) and the balance of foreign trade, which so far relies on the fiat currencies and the risks of devaluation and insufficient currency convertibility. Instead, Russia will be able to increase gold production from its three large, already commissioned fields from 330 tons to 500 tons, becoming a world leader in this strategic industry. Bonus: we get a strong rouble, strong budget and — in implementing the advanced development strategy, a strong economy.
https://www.lewrockwell.com/2024/06/alas...w-on-gold/
The Truth About What Is Happening To The Petrodollar
June 18, 2024 by Michael
This month, rumors about the petrodollar have spread like wildfire all over the Internet. Some of what is being said is true, and some of what is being said is false. When other sources were reporting on “the death of the petrodollar”, I was asked why I was not writing about it. Well, the truth is that I was not writing about it because the petrodollar is not dead. It is certainly in trouble, but it is not dead. Today, most oil continues to be sold in U.S. dollars, and most global trade continues to be conducted in U.S. dollars. But that could change as other countries lose faith in our currency. In particular, we will want to carefully watch what the BRICS nations choose to do. 45 percent of the world’s inhabitants live in the BRICS nations, and they have been implementing strategies that are designed to promote their own currencies and reduce dependence on the U.S. dollar. As U.S. relations with leading BRICS nations continue to deteriorate, I would expect that trend to accelerate.
So I am not optimistic about the future of the petrodollar at all.
But what some other sources reported about the petrodollar earlier this month was simply not accurate.
Let me start at the beginning. According to Investopedia, petrodollars are “simply U.S. dollars accepted as payment by an oil exporter”…
Petrodollars are oil export revenues denominated in U.S. dollars. Petrodollars are not a distinct currency; they are simply U.S. dollars accepted as payment by an oil exporter.
Global crude oil exports averaged approximately 88.4 million barrels per day in 2020. That pace would generate annual global petrodollar supply of more than $3.2 trillion a year, assuming an average price of $100 per barrel.
Petrodollars are the primary source of revenue and wealth for many members of the Organization of Petroleum Exporting Countries (OPEC) as well as non-OPEC oil and gas exporters including Russia, Qatar, and Norway.
The fact that so many other countries all over the globe use the U.S. dollar to buy and sell oil is a major advantage to us.
Earlier this month, there was a flood of reports that the “50 year petrodollar agreement” between the United States and Saudi Arabia had expired and that the petrodollar was now dead.
But that wasn’t true.
As Peter C. Earle has accurately pointed out, there never was a formal treaty, there never was a formal expiration date, and Saudi Arabia has been trading oil for other currencies for a very long time…
Last week several reports suggested the termination of a US-Saudi petrodollar agreement, and speculated a Saudi Arabian move to sell oil on world markets in various currencies, including the Chinese yuan. The accounts were rife with inaccuracies: the Saudis’ have transacted in non-dollar currencies for decades, and there has never been a formal treaty, much less with a specified expiration date, governing the loose arrangement that has come to be called the ‘petrodollar system.’
Unfortunately, many of the false reports went viral, and Google searches for “petrodollar” spiked to unprecedented levels…
Almost immediately, Google searches for the term “petrodollar” spiked to the highest level on record dating back to 2004, according to Google Trends data.
But as speculation about an imminent end to the U.S. dollar’s global dominance intensified, several Wall Street and foreign-policy experts emerged to point out a fatal flaw in this logic: The agreement itself never existed.
At least, not in the way it was being described in the posts that had gone viral on social media.
This is why I take my time and do my research before I report something.
It is so easy to be wrong, but it takes real work to develop a reputation for accuracy.
According to UBS Global Wealth Management chief economist Paul Donovan, the false story about the expiration of the petrodollar agreement “seems to have started in the crypto world”…
Paul Donovan, the chief economist at UBS Global Wealth Management, in a blog post said that the story had gained unexpected traction, serving as yet another example of the dangers of “confirmation bias.”
“The story seems to have started in the crypto world. Many crypto speculators desperately want to believe in the dollar’s demise,” said Donovan.
It is true that a “Joint Commission on Economic Cooperation” was established in 1974.
Originally it was only supposed to last for five years, but it was “repeatedly extended”…
The agreement referred to by Donovan is the United States-Saudi Arabian Joint Commission on Economic Cooperation. It was formally established on June 8, 1974, by a joint statement issued and signed by Henry Kissinger, the U.S. secretary of state at the time, and Prince Fahd, the second deputy prime minister (and later king and prime minister) of Saudi Arabia, according to a report found on the Government Accountability Office’s website.
The agreement, as initially envisioned, was intended to last five years, although it was repeatedly extended. The rationale for such a deal was pretty straightforward: Coming on the heels of the 1973 OPEC oil embargo, both the U.S. and Saudi Arabia were eager to flesh out a more formal arrangement that would ensure each side got more of what it wanted from the other.
At that time, the U.S. and Saudi Arabia very much needed one another.
Today, circumstances are quite different.
The U.S. is now much less dependent on foreign oil, and the Chinese have become one of the primary purchasers of oil from the Middle East.
Over time, more oil will be bought and sold in other currencies, but for the moment it is pretty much business as usual…
Oil has always traded in non-dollar currencies. In January 2023, Saudi indicated it was happy to negotiate oil sales in other currencies. The possibility changes little for financial markets. Saudi Arabia’s riyal remains pegged to the dollar, and its stock of financial assets are dollar focused. The dollar’s reserve status depends on how money is stored, not how transactions are denominated.
However, as I noted earlier in this article, we need to keep a very close eye on what the BRICS nations are doing.
Saudi Arabia has been deepening relationships with China, Russia and India, and that is definitely bad news for the U.S. dollar…
Owing to the US and Western Europe’s increasingly entangled alliances, and its own efforts to diversify away from dependence upon energy exports, Saudi Arabia has been increasing its diplomatic and economic engagements with China, Iran, Russia, nations considered primary US foreign policy adversaries. Recent moves toward accepting non-dollar currencies reflects broader geopolitical shifts away from US currency hegemony.
Of course the truth is that if we want to find the biggest enemy of the U.S. dollar all we need to do is to look at ourselves.
The rest of the world is rapidly losing faith in our currency because of what are own leaders are doing to it.
The U.S. dollar is no longer a stable currency. We are creating, borrowing and spending trillions upon trillions of dollars, and if we continue to act with such extreme irresponsibility everyone else will eventually be forced to switch to new reserve currencies.
According to USdebtclock.org, our national debt will hit 46 trillion dollars on this day in 2028 if we continue to borrow money at the rate we are right now.
That is madness.
We are literally committing economic suicide, but most of the U.S. population is not interested in such warnings.
They just want our leaders to keep flooding the system with more money so that the party can continue.
Yes, the party will continue for a little while longer, but once the lights are finally turned off nobody will ever be able to turn them back on again.
http://theeconomiccollapseblog.com/the-t...trodollar/