[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Sign-in] [Mail] [Setup] [Help]
Status: Not Logged In; Sign In
|
World News See other World News Articles Title: US Dollar Defaults On Petro Dollar And RU Banking Obligations by globalintelhub Currency Central Holdings Inc. — 4/21/2022 — Knoxville, TN — For the first time since 1971 the US has defaulted on it’s banking obligations and the Petro Dollar system marking ‘peak Dollar.’ While only a handful of public figures have a handle on the situation, we are concerned that the White House is spreading dangerous misinformation on how Currency Markets work so we’d like to explain key points on the nuts and bolts of the soft default and what it means for the future of global currency markets. Safe Haven Default – The US Fed seized $800 Bn + in Russian and affiliated assets. If you are an investor not from the United States, you are going to think twice about keeping your funds in ‘safe’ USA. There are tons of alternatives such as Singapore, Switzerland, Dubai, Cayman Islands, to name a few. To say it differently, the ‘flight to safety’ is no longer ‘buy Dollars’ – it doesn’t matter what is going to replace the USD, it’s important that it’s being replaced. Petro Dollar Default – By sanctioning the world’s largest oil producer, Russia demanded payments for Oil in Rubles, making the new global go to Currency for Oil – Rubles. In parallel, Russia pegged the Ruble to Gold, making the Ruble backed by Oil and Gold. Most BRICs either followed suit or agreed to trade Oil in Yuan or Rubles. The Biden administration’s blocking US Oil production was not helpful, nor was the signaling by US leaders they will fight inflation with more inflation. China agreed to settle Oil in Rubles or Yuan for it’s thirsty manufacturing base, setting a strong non-USD precedent. SWIFT shift to SPFS-CIPS – The Russian ban on SWIFT forced those banned to seek alternatives. Both Russia and China had SWIFT alternatives that they’ve been developing for many years such as the CIPS system [3] and Singapore based Nium [4]. Shift to Yuan – Before the events surrounding the Russia-Ukraine conflict, China was perceived as a toxic house of cards. That has drastically changed with Billions flooding into the Yuan not only from Russia but from partners of Russia who will happily settle their transactions in Yuan, and see China as a less aggressive, more understanding Superpower (as China is on the receiving end of US Hegemony). Abandoned World Reserve Status – During crisis, the Fed supplies Dollars as needed via swap agreements and the US Government supplies aid through various NGOs and DC controlled entities like the IMF, World Bank, etc. The actions against Russia are unprecedented. While the US has played global military superpower, it has always kept funds of the enemy safe in US hands whether the enemy was Adolf Hitler or Saddam Hussein. In fact, the Federal Reserve Bank even melted Nazi gold and rebranded it – talk about white glove service. It kept the war going, not to mention the billions in funding provided by US bankers to fund the other side (the Nazis) often times directly to Hitler himself. [5] Hypersonics – The US Dollar is not ‘backed by nothing’ as many claim, it’s actually backed by bombs – or in other words, US Military Superiority. The Navy protects trade routes, Space Force protects communications, etc. Russia used a Hypersonic missile to take out a secret NATO base inside Ukraine [6]. The message sent to the West was obvious- Hypersonic missiles have no defense or warning, and because they are so fast you don’t even need to arm them (with nukes for example). While the US is not officially involved in the war (although many Americans have been seen fighting the Russians in Ukraine) this is a victory for the kinetic war by Russia. Using Hypersonic weapons Russia could take out the US Navy, military bases, in a relatively short time period. Of course, the US can respond by ‘making Moscow glass’ but that’s not the point. War is a chess game, and US Military Superiority has made the US Dollar reign supreme since the British handed the torch to the Americans generations ago. US Foreign Policy is 80% Hubris and 20% Technological Superiority – that Superiority that’s left is in Space. The one place the US has a massive advantage over both Russia and China is Space. Anyhow, the context here is the fate of the US Dollar world reserve currency. BRICS / OPEC seeking alternatives – Now that many are forced to convert to Ruble or Yuan to buy Oil, many are seeking alternative payment networks. This is not a one way street – Russia imposed capital controls and Russian nationals took about 30 days to setup companies in Kazakhstan, China, Hong Kong, Singapore, and other places circumventing the rules. This further as flooded alternative centers to capital (other than NY/London) and these places are literally flooded with new business. US Net Importer – Since 80% of goods are manufactured in China et al, US economic actors need to pay for the same materials in with their hyperinflated dollars. In other words, the value of the US Dollar decreasing in value can be seen at the pump and at the grocery store. So having made all these points why is the US Dollar index up? Because all the currencies in the index are backed by the US Dollar, and the US Dollar is exporting hyperinflation. Let’s discuss a few economic scenarios. The US Dollar is being devalued – and this can be seen in the cost of raw commodity based products and services, i.e. food and energy (guns and butter). Metals markets are totally manipulated so don’t use a Gold argument to back your way out of this. The US Dollar was devalued by a straight 25% – 30% instantaneous move. Poster Comment: My forecast is that when the stock market declines and we have another round of inflation, foreigners will sell US stocks and bonds and buy commodities. That will push us into Hyperinflation. Iran has missiles more than twice as fast as ours. That is because the DOD is more concerned with stealing money by the trillions than with protecting Americans. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 1.
#1. To: Horse (#0)
THAT is not true. Not yet, at least. What Russia has done is backed gold with the ruble, instead of the reverse. The Russian CB will pay 5000 rubles for each gram of gold, but they are not giving away 1 gram o gold for each 5000 rubles paid in. That does have the economic effect for the dollar by placing a floor on the dollar price of gold via the ruble, though depends on the dollar value of the ruble. If the ruble can be made to gain value via pricing of oil in rubles, then that could raise the floor value of gold in dollars, and cause headaches for the US that way, but for Russia, that's a work in progress.
There are no replies to Comment # 1. End Trace Mode for Comment # 1.
Top • Page Up • Full Thread • Page Down • Bottom/Latest |
||
|
[Home]
[Headlines]
[Latest Articles]
[Latest Comments]
[Post]
[Sign-in]
[Mail]
[Setup]
[Help]
|
||