They’ve always gone hand in hand, worldwide. Oil is bought with greenbacks and the dollar rules the world’s economy.
That could soon change…
A year ago, almost to the day, China announced that any nation in the world could buy, sell or trade crude oil using the gold-backed Chinese Yuan. China also struck deals with Russia and the United Arab Emirates to trade with those countries in their currencies.
Unheard of – until now.
According to former Koch oil industry analyst and KCC commenter, Robertoe Anderson, “If Saudi Arabia chooses to sell oil in a currency other than the US dollar; most of the rest of the oil producing countries in the Middle East would surely do the same rather quickly.”
Robertoe knows a thing or two about oil. Unlike “rumored” newsletters no one seems to be able to find, 350 top oil executives subscribe to his.
Every hour of every day, we are spending $200 million dollars we don’t have. Seven days a week, 24 hours a day.
Allow me to put that in perspective:
- Gratuitous Sports Fact: the Sports Business Journal reported the SEC’s Tennessee Volunteers are more than $200 million in debt. Enormous compared to surpluses at other college programs; but just one hour’s spending for the US.
- Michael Jackson died $400 million in debt according to Billboard magazine; just two hours spending for the US.
- At $200 million an hour, in two months, we exceeded the combined annual profits of the 100 largest companies in the Fortune 500.
I just looked at our online, real time debt clock and it hit $16 trillion dollars Tuesday, headed towards $20 trillion by the time Obama leaves office.
First, it’s illegal for our government to just “print money,” but we have a loophole. It’s called the Federal Reserve – which, by the way, is no more “federal” than Federal Express, Federal brand shotgun shells or Federal-Mogul.
The Fed plays a little game; it slips money to mega banks using a trick called the “US Treasury carry trade,” at interest rates approaching zero, who in turn use the cash to buy government debt.
Look it up, it’s a big reason why Bank of America and JP Morgan, among others, are full of fat cats.
Printing money can lead to skyrocketing inflation, but our tool to judge inflation rates, the Personal Consumption Deflator, shows its low and headed lower. The reason? Since 2009, when the Fed hired a third shift and started running the presses full time, inflation has rarely climbed above 2% a year.s
If that sounds fishy, the Fed also controls our equally phony baloney interest rates and has kept rates artificially low thanks to the Keynesians.
Adds Anderson, “Interest rates are going up; the dollar will be dropping and our drunken Congressmen spending is about to end.”
Therein lays the potential horror story.
Is there anything else the Fed does for us? Well, since the Fed was formed, the dollar has lost 96 percent of its purchasing power.
The more the world figures out our dirty little secret the more successful China may be in leading the effort to eliminate the dollar as the standard of the world. If that happens, the Great Depression may just be a blip on our financial radar screen.
We’ve been unique; we’re the only country in the world that doesn’t pay for its purchases or debts in a foreign currency. If a foreign country wants to buy oil from the Saudi’s, the oil is priced in dollars. They have to buy dollars first, and then buy the oil. We’re immune; whatever we want to buy we don’t have to acquire the money to pay for it, we don’t have to sell goods or services to get it; we PRINT IT!
If this continues our debts may no longer be able to be paid for in our own dollars or our creditors deeply discount the value of our freshly minted money to its true value.
This has never happened to us before and I think you need to be ready for this should it happen. This isn’t a prediction of doom and gloom, but show me how it can end any other way.
And I’d prefer you use facts, not blind allegiance to a system, person or party.