Saturday , 18 November 2017


Watch Out! Russia & China Stripping USD of Its Dominant Role in World Trade

Before China and Russia can boot the U.S. military out of Asia and Eastern Europe, they have to strip the dollar of its dominant role in world trade, especially of Middle Eastern oil and that’s exactly what they’re trying to do. [Let me explain.] Words: 816

So says John Rubino (www.dollarcollapse.com) in edited excerpts from his original article* entitled China, Russia, and the End of the Petrodollar.

 Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

Rubino goes on to say, in part:

If you’re an up-and-coming superpower wannabe with dreams of dominating your neighbors and intimidating everyone else your ambition is understandable; rising nations always join the “great game”, both for their own enrichment and in defense against other big players.

If you’re Russia or China, though, there’s something in your way: the old superpower, the U.S., has the world’s reserve currency, which allows it to run an untouchable military empire basically for free, simply by creating otherwise-worthless pieces of paper and/or their electronic equivalent. Russia and China can’t do that, and would see their currencies and by extension their economies collapse if they tried.

See this excerpt from an excellent longer piece by Economic Collapse Blog’s Michael Snyder:

China And Russia Are Ruthlessly Cutting The Legs Out From Under The U.S. Dollar

China and Russia are not the “buddies” of the United States.  The truth is that they are both ruthless competitors of the United States and leaders from both nations have been calling for a new global currency for years.

They don’t like that the United States has a built-in advantage of having the reserve currency of the world, and over the past several years both countries have been busy making international agreements that seek to chip away at that advantage.

Just the other day, China and Germany agreed to start conducting an increasing amount of trade with each other in their own currencies.

You would think that a major currency agreement between the 2nd and 4th largest economies on the face of the planet would make headlines all over the United States. Instead, the silence in the U.S. media was deafening.

However, the truth is that both Russia and China have been making deals like this all over the globe in recent years.  I detailed 11 more major agreements like the one that China and Germany just made in this article: “11 International Agreements That Are Nails In The Coffin Of The Petrodollar”.

A few of the things that will likely happen when the petrodollar dies….

  • Oil will cost a lot more.
  • Everything will cost a lot more.
  • There will be a lot less foreign demand for U.S. government debt.
  • Interest rates on U.S. government debt will rise.
  • Interest rates on just about everything in the U.S. economy will rise.

So enjoy going to “the dollar store” while you can. It will turn into the “five and ten dollar store” soon enough.

China & Russia Are Accumulating Gold

Snyder goes on to note that both China and Russia are accumulating gold, which will protect them from the coming currency crisis and give the ruble and yuan greater legitimacy in global trade. In Jim Rickards’ book Currency Wars, he tells the story of financial war games conducted by the U.S. military, in which one of the scenarios was a Russian gold-backed currency that challenged the dollar. We’re apparently not far from that plan becoming feasible.

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The Future of the Petrodollar is in Jeopardy

The U.S. spends a big chunk of its $700 billion a year defense budget on dominating the Middle East in order to force the trading of oil in dollars. Let that trade be diversified into several currencies and the demand for petrodollars goes way down. Central banks and global corporations will sell part of their dollar holdings, sending the dollar’s exchange rate into a tailspin. This in turn will make it harder for the U.S. to finance its military empire/welfare state.

The Impact on America

The net result: America becomes Spain, no longer able to simply whip out the monetary credit card to cover its overspending. We’ll have to live within our means, cutting maybe $3 trillion a year in government largesse (including the growth in unfunded entitlements liabilities).

Cuts on this scale can’t be accomplished smoothly, as Europe is discovering so in this scenario the coming decade will be even messier than the last one, with “Occupy” movements shutting down cities and every election producing incumbent massacres. A combination of higher prices for necessities and lower wages will demote much of the middle class to “working poor.”

Conclusion

China and Russia will reap the rewards of stronger currencies, and will divide (or share) control over their part of the world.

It’s hard to know who to feel sorrier for, Americans who thought they could depend on government programs for a middle class lifestyle, or the neighbors of China and Russia who will see the relatively light hand of the American empire replaced with something far more atavistic.

*Source of original article: http://dollarcollapse.com/dollar-5/china-russia-and-the-end-of-the-petrodollar/

Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Related Articles:

1. 2012: The Beginning of the END for the U.S. “Petrodollar”!

dollar

A major portion of the U.S. dollar’s valuation stems from its lock on the oil industry and if it loses its position as the global reserve currency the value of the dollar will decline and gold will rise. Iran’s migration to a non-dollar based international trade system is the testing of the waters of a non-USD regime…transition to a world in which the U.S. Dollar suddenly finds itself irrelvant. [Let me explain.] Words: 1200

2. Video: India to Pay for Iranian Crude Oil in Gold Instead of Dollars

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The EU has delivered on its threat to ban the import of crude oil from Iran, in response to its nuclear programme. The latest round of sanctions prohibits any new oil contracts, while allowing for existing deals to run until July but Tehran is apparently finding ways to keep business pumping. Reports say Iran will keep supplying one of its biggest customers – India – but will get payment in gold instead of dollars. Video* length: 02:37 minutes.

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6. Is There a Viable Alternative to the Dollar as the Reserve Currency?

Within the recent retracement of the U.S. currency there has been endless speculation about the future role of the dollar as the world’s primary reserve currency. Moreover, there has even been conjecture that the dollar will no longer exist at some point in the near future but any case made for the vulnerability of the dollar falls short when it comes to naming alternatives. Words: 631

7. What Would USD Collapse Mean for the World?

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I came to the conclusion several years ago that it was just a matter of time before the world realized that the relative functionality of the U.S. dollar was about to go belly up – to collapse – and that that time happened to coincide with that fateful date all the prophecies are going crazy about – 2012! Words: 881

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Today, more than 60% of all foreign currency reserves in the world are in U.S. dollars – but there are big changes on the horizon…Some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade…[and this shift] is going to have massive implications for the U.S. economy. [Let me explain what is underway.] Words: 1583

9. BRICS Plan to Abandon U.S. Dollar Will Hurt U.S. and Help Gold

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10. IMF Proposing New World Currency to Replace U.S. Dollar and Other National Currencies!

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