Sunday, October 27, 2013

Petro Dollar Recycling Undone: Suddenly Saudi Arabia is Anti-American (dollars)

Saudi Arabia is in the news recently, and it’s not good for America. The forty year agreement prescribing that America would protect Saudi Arabia, if Saudi Arabia would enforce that every ounce of Arab oil would be traded in dollars; seems to be waning. This could be the end of America’s dominance in world banking.

Back in 1971, Richard Nixon was desperate. He had inflation, deflation, stagflation and economic volatility day after day. He also had the Vietnam War that wouldn’t end. Nixon needed a way to redeem himself (extremely paranoid people need this desperately, and Nixon was extremely paranoid). In 1971, he imposed a Wage Price Freeze to no avail. America’s economy seemed like it was going to crash. When forces in an economy wobble, the wobble generally increases in speed. Then he came to his Waterloo in 1973: He needed to support both Saudi Arabia and Israel during the 1973 Yom Kippur War. He knew that his options were limited. If he supported Israel alone, the Arab Countries would cut-off his oil shipments, and his economy would grind to a halt.
Nixon, always the opportunist, seized the moment: He brokered a deal with the devil instead. He protected Saudi interests in turn for creating the dollar as the world’s only currency for petro dollars per Saudi Arabia’s request. This kicked-off wild economic speculation for the next forty years. Every president, since Nixon, had to enforce this policy. Thus, Every president, since Nixon, has received a two million dollar stipend from Saudi Arabia as they left office, as payment for protecting Saudi interests. And the dollar has remained the premier currency worldwide.

Enter: 2013.
The BRICS Nations (Brazil, Russia, India, China, and South Africa) recently persuaded Europe to join their confederation of anti-dollar states. If more nations sign-on, it will mean the end of Petro-Dollar Recycling, and the dollar. The last Bastion of the dollar is Saudi Arabia. If they change the current policies, the reign of the dollar will end.  

I have a friend in Israel that can’t cash American checks anymore. The situation looks grim. Congress just booted discussions about the budget three months down the road. My feeling is that the world won’t wait for three months to see if the American Congress will repair their system. World Leaders will terminate the dollar on their terms…and soon.
I don’t know when the dollar will crash. My book stated November 3, 2013 as the final day. I know that the Day of the Dollar’s Demise is close at hand. Beware!


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