The coming end of Dollar Hegemony
Back in October a European diplomat had a warning for Washington.
“At the moment, sanctions are effective because of US financial dominance as the global reserve currency — forcing SWIFT out of Iran could incentivize China or Russia to establish their own SWIFT system, which is not in any of our interests,” the diplomat told the Washington Examiner.“What is going on with SWIFT could also be applied to Russia or China,” a European diplomat said. “And then what is going to happen to the financial system as a whole?”
The U.S. didn't listen, and immediately threatened to sanction the SWIFT banks if they didn't kick Iran out. SWIFT folded under the pressure, but that only triggered the next step.
Two days ago the EU set up a SWIFT alternative in order for EU companies to skirt U.S. sanctions.
Something even more important happened one day earlier.
A special financial mechanism aimed at maintaining trade ties between Switzerland and Iran is ready for implementation, according to Sharif Nezam-Mafi, the head of the countries’ joint chamber of commerce.He told IRNA news agency that the clearing house will be used to facilitate Iran’s oil transactions with its major Asian crude customers – namely India, China and South Korea.
The Swiss have created an alternative financial clearing house for the rest of the world, and no one is talking about it.
Russia had created their own SWIFT alternative months earlier.
Russia has already worked out a cooperation mechanism with Tehran and mentioned the possibility of direct transactions with Iranian companies, according to the MP.The Central Bank of Russia, which has developed the SPFS, said earlier that 416 Russian companies and government organizations had joined the system as of September. They include the Russian Federal Treasury and large state corporations, including Gazprom Neft, Rosneft, and others.
Russia expects to be locked out of the U.S.-dominated financial system forever, and are planning accordingly.
Russia's central bank is selling dollars in order to buy enormous amounts of gold.
Russia isn't alone. The dollar’s share of global central-bank reserves have fallen to the lowest level since 2013.
For now China's banks remain in the SWIFT system, but that doesn't mean that China isn't undermining Dollar Hegemony. They are just doing it on the demand side.
The exclusivity of the U.S. dollar as a vehicle for global crude oil trading is increasingly being challenged by other currencies...
The launch by the Chinese government in March of yuan-denominated oil futures trading on the Shanghai International Energy Exchange has reinforced the Chinese currency's presence in crude oil markets. The daily trade volume on the Shanghai market topped 500,000 contracts many times in December -- with each contract for 1,000 barrels of crude. Transactions have doubled over the past six months.Trading volumes for Shanghai's yuan-denominated oil futures have already overtaken those of the rival Dubai Mercantile Exchange and sometimes come close to those of North Sea Brent, an international crude oil benchmark.
Individually these actions don't mean much, but collectively they amount to a trend that was unimaginable just a decade ago.
The reasons for this trend date back to 2001, but Trump has put it into overdrive.
On one hand, Trump is imposing sanctions at a record pace.
On the other hand, we are dramatically cutting back on foreign aid.
US aid to countries fell from $50 billion in fiscal year 2016, $37 billion in 2017 to $7.7 billion so far in 2018. A world less tied to American largesse and generous trade tarrifs can more easily reject the “you are with us or against us” bullying doctrine of US presidents. In the carrot and stick approach that largely passes as American foreign policy, the stick loses power as the carrot vanishes.
Should it be a surprise that the nation with a bloated military and an understaffed diplomatic corps acts like a schoolyard bully?
The irony is that our financial imperialism is coming to an end, not because of left-wing opposition (which has been mostly neutered since the 1990's), but from the right-wing.
A point had to come where this policy collided with the self-interest of other nations, finally breaking through the public relations rhetoric of empire. Other countries are proceeding to de-dollarize and replace what U.S. diplomacy calls “internationalism” (meaning U.S. nationalism imposed on the rest of the world) with their own national self-interest.This trajectory could be seen 50 years ago (I described it in Super Imperialism [1972] and Global Fracture [1978].) It had to happen. But nobody thought that the end would come in quite the way that is happening. History has turned into comedy, or at least irony as its dialectical path unfolds.
For the past half-century, U.S. strategists, the State Department and National Endowment for Democracy (NED) worried that opposition to U.S. financial imperialism would come from left-wing parties. It therefore spent enormous resources manipulating parties that called themselves socialist (Tony Blair’s British Labour Party, France’s Socialist Party, Germany’s Social Democrats, etc.) to adopt neoliberal policies that were the diametric opposite to what social democracy meant a century ago. But U.S. political planners and Great Wurlitzer organists neglected the right wing, imagining that it would instinctively support U.S. thuggishness.
The reality is that right-wing parties want to get elected, and a populist nationalism is today’s road to election victory in Europe and other countries just as it was for Donald Trump in 2016.
Trump’s agenda may really be to break up the American Empire, using the old Uncle Sucker isolationist rhetoric of half a century ago. He certainly is going for the Empire’s most vital organs.
In a perfect world, the American Empire would pull back voluntarily and peacefully and without a crisis.
But that is never going to happen because TPTB won't let it happen.
Instead the American Empire will end when with a financial crisis caused by a plunging dollar that makes our Empire unaffordable.
“I am always on the side of the revolutionists, because there never was a revolution unless there were some oppressive and intolerable conditions against which to revolute.”
- Mark Twain
Comments
This is why
it is so very important for people to start putting away as much of a savings as possible. It's equally, if not more important for those that can, to start growing as much as possible and establish collectives for your daily needs. Buy only what you need, not what you want.
When the dollar inevitably crashes, inflation will soar.
Regardless of the path in life I chose, I realize it's always forward, never straight.
Savings in inflation
Your savings will need to be liquid (for example, not real estate), because you cannot store everything you will need. It's risky to bet on a single commodity (for example, guns).
You can save in another currency, but that carries risk too (for example, Euros and Yen).
I would suggest using all of these methods, plus the oldest and most time tested of all - precious metals.
Wow, convincing, scary....
Have you any advice, links to how to plan more specifically against this? Maybe another post like this? Asking for the slow kid in the back, he's shy.
My record is mixed
I correctly predicted the commodity boom of the 2000's, and the 2007 housing bust.
But I completely failed on predicting the QE-driven post-2008 boom. I underestimated the CB's.
So please keep in mind that I could be wrong.
First of all, empires collapse all the time without societies going full Mad Max, so don't buy into the "canned food and guns" crowd.
Even if they are right you can't really plan for that.
What is more likely is brief hyperinflation (think early 90's Russia, 2001 Argentina).
As for investments, a house is always good. A house with fertile land and water is better.
Investment houses when real estate prices are historically high is very questionable.
I have a small bond fund with a mix of foreign sovereign currencies. It hasn't done anything in many years, but if the dollar falls...
Precious metals don't get the credit they deserve.
I bought gold in 2002-2003 at $300 an ounce. It's now at $1300. It's gone up 9% in the last 3 months.
PM's are the anti-dollar, in that they move in the opposite direction (usually).
You can buy PM's in an ETF (like GLD, etc.).
Silver price is volatile, but it's cheap, easy to buy and is the traditional currency for regular folks. It doesn't hurt to have several dozen ounces of physical silver.
That's all I can think of for now.
Thanks
I've seen some of the shows where people hunt for gold in yard sales and storage lockers, and do chem. tests on % of PM. That and buying small gold bars in display rack packaging. Just all seems kind of sketchy. Do have some silver, scrap coins, though.
Do you see, or do others see this as a one or the other type of thing? Trump won't always be there, and the wealthy prob. see this as another opportunity in having 2 competing systems to play both sides and profit. Watching the EU and it's missteps and growing pains, the competition to the dollar won't be all gravy. But I don't know enough. It's kind of like trying to anticipate what life will be like under climate change.
Not to add injury to injury, but
I hear that in the event of a nuclear attack, one thing you definitely don't want to have near you is elemental gold.
In my most Dystopian nightmares, where stupid people are eliminated from society (OK, we're talking deep dark stuff here), it's because they hoarded gold.
Revisit your chemistry! It could save your life!
(Kidding/not kidding)
“We may not be able to change the system, but we can make the system irrelevant in our lives and in the lives of those around us.”—John Beckett
I think Pat Frank was the first writer to use that trope
in Alas, Babylon (1959). Interestingly, it's the least dystopic novel in its class, with the main characters getting a fantastic series of lucky breaks (and no one had heard of "nuclear winter" yet). But even so it's a very disturbing read - the more so for things that have NOT changed (and in some cases have only gotten worse, e.g. Just-In-Time shipping).
Incidentally, we now know that the longest-lived radioisotope of gold has a half-life of 186 days - the rest have much shorter half-lives, some measured in seconds or less.
There is no justice. There can be no peace.
You're right, Thanks!
I think that is where I got it. I remember reading that book.
So I can keep my jewelry then, yay! (LOL)(edit) Still not a good thing.
“We may not be able to change the system, but we can make the system irrelevant in our lives and in the lives of those around us.”—John Beckett
Precious metals
I don't see Kroger ever taking gold or silver as payment for food. Retailers will stick with fiat currency until it there is no more of it. That is what happens with fiat currencies. Our problem is using federal reserve notes as currency rather than using sovereign bills of credit.
If the shit gets so bad that it all begins to collapse, bills of credit will briefly come back (Lincoln's greenbacks were bills of credit not Treasury notes according to the Supreme Court in the legal tender cases and bills of credit are what preserved the union). The government will issue bills of credit to get over the crisis and then the banks will have Congress take them out of circulation again.
When the shit hits the fan like it did for Lincoln, bills of credit are the answer and they will return, perhaps even suggested by the banks, because even the banks benefit from an economy based on bills of credit because bills of credit prevent total collapse.
Have been buying silver for awhile now
turning US dollars into .999 fine silver rounds (the banks won't give any incentive to invest in $) savings. The idea is to have a negotiable coin to trade for goods. At present valuations, one ounce is about $ 15. Foreseeable futures will keep value, no matter what the dollar does. It is a semi-precious metal, used also for industrial applications (as opposed to paper). A good value, easily converted. Also smart for the small investor. The up-charge from spot (market) prices the mints / dealers charge is minimal ($100 order) with the economy houses. Going to need a fall-back when the fed fails. Good Luck
sorry but the post is wrong
even though I have tried to fix it.
up charge from mint / dealers less than $1 / ounce
free shipping for orders over $100
having a lot of trouble with postings here lately (my open threads included)
not sure if it is on my end? but frustrating anyway
Consider this, QMS
In 1964 a silver quarter (the last year silver coins were minted) bought one gallon of gasoline.
Today, that same silver quarter will buy..........one gallon of gasoline.
What this shows is prices are not going up. The value of fiat money is going down.
Food for thought.
Neither Russia nor China is our enemy.
Neither Iran nor Venezuela are threatening America.
Cuba is a dead horse, stop beating it.
understood
There is no printed value on silver rounds. It is one ounce .999 fine silver. Not 25 cents or a dollar. Its value is relative to trade value at the time of trade. I received a $5 silver certificate once in change. Good luck getting $5 (current market) silver from that note from the issuing body (fed).
I've read
A pinch of gold dust could buy a loaf of bread in Sumerian times.
The same is true today.
I don't know if that is true, but I believe it.
I remember reading that the global supply of gold increases at roughly the same pace as the real global economy.
The only exception is when Spain conquered the New World. This caused PM prices to collapse, but it was obviously a one time thing.
The price of silver fell a lot in the 1870's, when 1) Nevada's Comstock went into production, and 2) silver was demonetized by pressure from Wall Street (this cause deflation, and the Free Silver movement).
Just look at the price of PM's when a currency melts down.
I don't know how much
a pinch of gold weighs. But gold is about $1200 an ounce.
Thats about 1200 loaves of Langendorf.
Can one get 1200 pinches out of an ounce of gold?
Dunno.
Another tidbit though. The price of gold collapsed after Spain plundered the Americas and flooded the market of the old world with it.
Neither Russia nor China is our enemy.
Neither Iran nor Venezuela are threatening America.
Cuba is a dead horse, stop beating it.
1200 loaves of bread
produced in bulk would be about the value of an ounce of gold. Flooding the market is no longer an issue. We sent pallets of US$ to Iraq. Didn't change the conquest. Flooding the world with reduced value paper does not increase its value. The point is, economies are selling US Treasuries to buy metals. That should tell you something. World markets are establishing work arounds to US sanctions. This indicates a devaluation of the US$. Hard currency is more valuable than paper.
Exactly all paper is useless
dollar bills, stocks, ETF's all
useless.
Coins are good, from what I understand a nickel(.05c)
is the best coin to have, it's worth more than (0.05c)
cuz of it's content.
Composed of 75% copper and 25% nickel, the piece has been issued since 1866.
I never knew that the term "Never Again" only pertained to
those born Jewish
"Antisemite used to be someone who didn't like Jews
now it's someone who Jews don't like"
Heard from Margaret Kimberley
Actually not.
You are not going to go to the gas station and buy anything with silver or gold. Retail stores and stations are not equipped to take it. What are they going to do with it? Trade it to someone else who is not equipped to take it?
Fiat money is all retail systems are equipped to take.
I'm diversifing
like crazy. Farmable land. Silver and gold. Chinese yuans. Ammo. Seeds.Foodstuffs like rice, beans, dried potatoes and veggies. Non perishables like toothpaste, tp, bar soap, candles and wicks, batteries, ect.
A little bit of each every month with whatever is left over after bills.
Stupid to keep it in a bank, IMHO.
Neither Russia nor China is our enemy.
Neither Iran nor Venezuela are threatening America.
Cuba is a dead horse, stop beating it.
@earthling1 If the world gets so bad,
If the world gets so bad, that storing these things becomes necessary in order to survive, there will be utter chaos, lawlessness and anarchy. You will probably be killed trying to hold on to them.
i tend to agree with you on this.
if i were to "stock up" on ammo, the size of my inventory would be exactly one bullet.
well, okay, that's a clever thing to say, but realistically, probably wouldn't hurt to own a deer rifle and a hundred rounds, being as how i live in the middle of deer country and could rely on the local fauna for some extra calories in desperate times.
on the other hand, having some useful commodities put away might see a person through, not a complete social collapse, but a temporary disruption of markets. don't forget that during the depression, americans starved to death. we have no idea how many, because the government was not inclined to count, or in fact, even admit the fact of it.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
I keep enough ammo
of the calipers of my weapons plus ample amounts of the more popular 9mm and shotgun shells to use as barter.
I keep more shotgun shells in "game loads" for small game like rabbits and game birds.
Big hunting rifles are prolly not a good idea as big game like deer and elk will disappear fast.
Call me crazy but I truly believe ammo will become a valuable currency if and when shtf.
The same with pre-1964 silver coins, which have a known silver content and will be more useful for small purchases. In a collapse a gold coin would be worth a house. Maybe.
Neither Russia nor China is our enemy.
Neither Iran nor Venezuela are threatening America.
Cuba is a dead horse, stop beating it.
i don't know that you're crazy, but i don't find life
to be a particularly compelling experience even under conditions of relative security and civilization. i'm certainly not going to hang around the universe if our collective existence is reduced to a savage and lawless competition to subsist.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
Russia is getting prepared for this very scenario
by reducing foreign debt, buying gold, producing/purchasing locally, and the biggest one of all, investing in programs of social uplift (public transportation, inexpensive internet connectivity, health & welfare targeted towards families, production of non-GMO food crops, free education from K to college and trade schools) rather than in war mongering and sowing chaos in every corner of the globe.
Discussion about some of these factors here:
[video:https://www.youtube.com/watch?v=uMcF8dSeDRc]
Here's anther interesting discussion:
[video:https://www.youtube.com/watch?v=6SuX47jF-GM]
Seen a graphic the other day
showing the New Silk Road not just connecting China, Russia, Europe, and Africa, but a planned tunnel under the Bering Sea connecting it to Alaska and the rest of North and South America.
Quite ambitious.
Just a few stupid oligarches in the way.
Neither Russia nor China is our enemy.
Neither Iran nor Venezuela are threatening America.
Cuba is a dead horse, stop beating it.
The largest prizes
are rail, road, internet and air interconnections between China, Russia, Eurasia, ASEAN, Africa and Europe. A rail connection between Asia and North America would have to be constructed and paid for by China and Russia and would mainly benefit North America. In any event, the US is no longer a world leader in the technologies required and is financially tapped out. BTW, China is now building railcars for major US cities.
[video:https://www.youtube.com/watch?v=WaxuyK4kcpM]
Seeing the pictures of the trains
makes me imagine what this country could look like if it hadn't wasted all its money on resources grabs. The resources profits should at least be shared with the American people since they paid for it. Which brings up another point. Why don't the oil, gas and mineral companies have to pay for their wars instead of us and hire their own goons to go fight for it? How long ago was it that Smedley told us the truth about his career?
Which AIPAC/MIC/pharma/bank bought politician are you going to vote for? Don’t be surprised when nothing changes.
Seems like the stimulus had funding for high speed rail
for the states but it was rejected by Republicans in those states .
http://articles.latimes.com/2009/feb/14/nation/na-stimulus-rail14
A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.
The money was used instead
...for high-speed rail guns.
____________________
The political system is what it is because the People are who they are. — Plato
one of walkers proudest moments
man, i bet tommy thompson hates him for that.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
If the shoe was on the other foot
the plan would have been rejected by the Democrats.
True, dat.
A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.
I was a Brakeman on Canadian Pacific Rlwy
In the 70's but left in the 80's so that's my background but even then when talking with some engineers as we went down the tracks (sometimes the subject doesn't matter, it is to help keep him awake) they talked about what they read about the equipment other Countries had in comparison to Canada.
At that time there were a lot of engineers nearing retirement that had driven steam engines in their career and when I transferred from the 'mainland' for a six month period on Vancouver Island (running out of Victoria and Nanaimo) one engineer I rode with told me that steam trains had been running on the Island as late as the 1950s!
In fact I hired on CPR in the Kootenay Mountain area at Nelson and it wasn't until I transferred to the 'main line' in Vancouver that I saw how outdated the equipment I'd been working with was in comparison.
I sorta knew anyway we had outdated equipment because some of it was too obvious to even a newbie on the RR when the cabooses I get on need me to fill the lamps on the back of the caboose and our heat is from an oil burning stove, to name just one example from many. Plus we didn't have those electric signal posts you see along the tracks reading red, yellow or green, no we went with train orders granting us rights to operate between 'x' mile post to 'x' milepost.
Which meant when I first got on the engine I had a fist full of train orders to read out and before were approaching milepost 'x' I had to call the caboose to tell the caboose we would 'high ball'(not stop) that milepost as we had orders to go beyond that point. The crazy part (to me) was that there were NO other trains running in the mountains where we were, none, we were out there alone ,but rules are rules.They were operating in a different era from the past.
So when I transferred to Vancouver I felt I was in the new age of railroad operations, the engines were many times times quieter inside and on the caboose we had electric lights (no filling lanterns),heat, electric stove, fridge and we only had ONE train order giving us the right to proceed to our destination app 145 miles away up Fraser Canyon unless lights along the way sent us into a 'siding' to let an oncoming train pass.
This post has become to long ,I apologize, but I'll add this to it. I loved running on the trains in the Kootenay Mountain division but our high track speed was 30 to 40 mph and 15 mph on one run and as a brakeman you get paid 'by the mile' not by the hour.
So most new hires transfer out as soon as they have enough seniority to at least get on the 'spare board' (on call 24 hours to fill in for anyone 'booking off' for that run) in Vancouver and so I felt I was running on the latest and greatest equipment but railroaders there knew better and educated me on it.
Today I live about 25 miles from the Canadian border, 60 miles to Vancouver and when I go to Vancouver I leave here around 10:30 am and get into Vancouver close to noon.
thanks for sharing that.
not too long at all. you could probably write a whole book.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
Agree n/t
And to think many
people think right wing populism and Trump's election are solely due to racism.
Is that a complete sentence above? It does not sound right.
dfarrah
"too many" instead of "to many"
Otherwise it looks correct to me.
I've seen lots of changes. What doesn't change is people. Same old hairless apes.
No, I didn't intend
to use "too," but it fits well.
dfarrah
I read it backwards
"too many think" rather than "To think many ..."
Must have been too tired.
I've seen lots of changes. What doesn't change is people. Same old hairless apes.
It didn't sound right because
...you used the word "think" twice in the same sentence in two different ways.
But not only is it right, it is correct.
This topic, by the way, was and is the most censored topic at Daily Kos.
This is the first time I have seen it discussed in a normal way at c99.
____________________
The political system is what it is because the People are who they are. — Plato
Rabid intersectionality
has been elevated to the status of religion at DKos and to question it's precepts is tantamount to blasphemy. They behave like religious fundamentalists. If you don't espouse their 'truth' then you will be excommunicated. Currently, DKos appears to be doubling down for 2020 which may very well assist in helping Trump win a second term.
Some positive news is that many DKos Dems may be coming to their senses. The Alexa ratings shows DKos may shortly break through 5000 after the last dead cat bounce. The site now serves solely as a mouthpiece to "catapult the propaganda" as currently promulgated by the corporate MSM.
Yes. It's a sad thing to watch.
People should not assume their time at DailyKos is in any way related to what that channel has become.
After several years, I looked at it recently. I don't recognize it. It is deeply creepy. Like a haunted escape room.
____________________
The political system is what it is because the People are who they are. — Plato
A decade ago
I was proud to be a member of a progressive site like DKos. Now I am embarrassed to admit this. Many of us expats here in C99 fought long and hard in a futile attempt to halt it's downward slide into becoming a mouthpiece for the Deep State and MIC. The more I see what that site has become, the more I think the long running rumors that Moosetits is really a CIA asset are actually true.
It was a decent site
for a few years.
I suspected as soon as Kos started getting TV gigs that he would 'turn.' Now, IMO, it was all a ruse.
dfarrah