Originally published Apr. 6, 2023 by TraderStef on CrushTheStreet (updated)
I explored the origin of the United States dollar and subsequent debasement in the first part of this series and then noted its weaponization by the Biden administration in response to the current geopolitical and financial crises that are accelerating a de-dollarization process. On a horizon that’s nearer than expected by plebeians programmed by bread and circuses and gaslighting by politicos and the legacy media are an implosion of the petrodollar hegemony and the dollar’s dominant role as a world reserve currency due to political expediency and turbocharged monetary policy that has hastened its demise. The recession taking hold in the U.S. and a decline in the dollar’s strength that adds fuel to the inflation monster can only make matters worse. Here is an excerpt from Part 1 (Twitter thread):
“Economic sanctions imposed upon Russia by Western nations that are supportive of NATO’s proxy war in Ukraine (Part XII / thread and XIII / thread) included the removal of certain financial transactions via SWIFT, which is unprecedented (compilation of all sanctions as of Mar. 2023). Those policies are spearheaded by the Biden administration, and they launched an escalatory phase of de-dollarization by the BRICS+ nations and an increasing bloc of countries that view the sanction regime and military-industrial complex as an existential threat to their sovereignty. Not only have sanctions backfired on Western economies and geopolitical diplomacy, but a new round of retaliatory sanctions is being implemented upon the collective West by Russia as cold-shoulder diplomacy towards the U.S. by nations friendly to Russia multiplies. To complicate matters, there’s a banking crisis (Part 1 / thread and Part 2 / thread) bubbling in the U.S. with a contagion that’s worsening and has dominated financial headlines since late last week. The recent spike in the accumulation of gold by foreign central banks makes total sense.” – TraderStef, Mar. 18
At least the New York Times published a pittance of truth in journalism when it acknowledged in January that Ukraine isn’t the RICO-free mob that the presstitute legacy media, White House, and majority of Congress insisted it was. After nearly a decade of published reports by mainstream media to the contrary that detailed corruption and genocide, Russia rolled across the Ukrainian border last year as a last resort to demilitarize, denazify, and root out the country’s fall from grace.
A Day Late And $113 Billion Short, New York Times Acknowledges Ukraine As A Broken And Corrupt Nation… “It’s apparently safe now to make the obvious point that Ukraine is run by fiends and so maybe dumping American taxpayer dollars on the corrupt little nation without any strings attached was a little hasty.” – The Federalist, Jan. 24
Tucker Carlson piled on more personal risk to his life and career last night by sounding the alarm over de-dollarization on national TV, chiding the Biden administration for pissing off the world, and reminding viewers that the war in Ukraine will likely be the last we’ll ever afford. Here’s the video for your viewing pleasure or red pill experience:
“The dollar’s reserve currency status is in jeopardy, as is the American standard of living that depends on it. The best move you can make to mitigate your personal loss is to divest of dollars and dollar denominated financial assets” – Peter Schiff, Apr. 6
“Gold is seen as the flip side of the dollar trend and of course, a key hedge against inflation… it is doing well compared to 5% rates available in overnight dollar deposits… What also may be at work in favor of gold are FX reserve management trends. The increasingly bipolar geopolitical world – exacerbated by the war in Ukraine – means that BRICS+ central banks will be keeping a greater share of their international reserves in gold. This is a structural positive for gold and a structural negative for the dollar, one to add to the cyclical negative of what should be a Fed easing cycle later this year.” – ING via FxStreet, Apr. 6
If you did not live through the Great Financial Crisis (GFC) firsthand, it’s growing more likely that we’re heading into a financial crisis that’s multiplied by innumerous factors. Another GFC déjà vu moment scrolled across my screen today, which is indicative of a credit crisis brewing on the heels of a budding banking crisis.
“APOLLO: ‘The credit crunch has started… A survey of 71 banks in the Dallas Fed district done after SVB went under shows a dramatic reversal in loan volumes… from March 21 to 29.” – Carl Quintanilla, Apr. 6
Commentary in the press and social media has a habit of creating a false dichotomy between the total domination of the global monetary system and the total abandonment of the dollar. A more likely scenario is that the dollar will weaken significantly but remain among the most used currencies. Take note that despite Britain’s pound sterling losing its reserve currency status in the 1930s, it did not disappear.
A weakened and less-used dollar will not completely destroy the currency or U.S. economy, but it will severely deteriorate the political position of the U.S. on the world stage. As other currencies are evolving and growing around the dollar’s former role, foreign governments and the private sector will find it easier to evade sanctions imposed by the U.S. and its allies. A world that’s less full of dollars means less demand for U.S. debt in the form of Treasuries and bonds. That will demand higher interest rates and will obstruct the ability to finance elective military actions with an inflated fiat currency, which was the idea behind Xi and Putin’s meeting in Moscow to bury Pax Americana. Senator Marco Rubio succinctly summed up the situation beyond Sean Hannity’s narrowminded view on Fox News when he said we need to wake up as countries ramp up their use of their own currencies for international trade. “We won’t be talking about sanctions in 5 years… because we won’t have the ability to sanction them.”
One example of where we’re headed is the inflation road we endured that’s far from over. Critters in the House Committee on Oversight and Accountability are finally raising eyebrows over a reckless depletion of the U.S. Strategic Petroleum Reserve (SPR). It was used to lower U.S. gas prices and attempt to hide energy policy failures and the diplomatic disaster surrounding Ukraine, which worsened an inevitable energy crisis and spiked inflation much higher than already baked in the cake. If Biden had not annihilated U.S. energy independence in less than two years and drained the SPR by half, recent actions by OPEC and Russia to reduce oil and gas production by millions of barrels per day would not be a supply or inflationary issue for us peasants. Does the Senate GOP have the chutzpah to tie the SPR reserve to the debt ceiling dilemma? Also, the price of crude oil would not have spiked this week and increased the cost to refill the SPR. The U.S. could previously rely on Saudi Arabia to counter OPEC decisions to limit oil production, but that’s no longer the case.
Gas Prices Poised to Rise as Dems Block Energy Bill… “Gas prices will likely begin rising immediately as Democrats block Republican efforts to increase domestic oil and gas energy production. OPEC+ announced Sunday a cut in oil production to the surprise of many… Last summer, regular gas prices set new records, surpassing $5 per gallon on average. Gas prices are already on the rise this year. Energy prices have soared since Joe Biden took office, in part because of Russia’s invasion of Ukraine but also because of Biden’s work to discourage domestic oil and gas investment and production.” – Political Insider, Apr. 4
Critics raise concerns about Strategic Petroleum Reserve’s decline… “To curb rising gas prices last summer, Biden released more than 200 million barrels from the U.S. stockpile, bringing the reserves to the lowest point since 1984… ‘By gutting vital fuel storage to lower short-term prices, the Biden Administration exposed the U.S. to future market volatility and increased supply dependence on adversarial nations instead of supporting an all-of-the-above energy approach to unleash American energy potential,’ House Oversight Republicans said in a letter to Energy Secretary Jennifer Granholm.” – Just The News, Apr. 5
China and Brazil recently finalized a huge trade deal in their own currencies that will completely ditch the dollar as an intermediary. A Russian politico announced last week that the BRICS nations are developing a “new currency.” That deal will deepen the greenback’s fall from grace and allow the top rival to U.S. economic hegemony to conduct massive trade and financial business directly using the Chinese yuan and Brazilian reais with the largest economy in Latin America. Also, Saudi Arabia embarked on a major shift toward the Shanghai Cooperation Organization (SCO).
Saudi Arabia Strengthens Relations With China Amid Strained U.S. Ties… “Riyadh is joining a Beijing-led political and security bloc; the two countries have also recently signed multibillion-dollar energy deals.” – WSJ, Mar. 29
Saudi Arabia Makes its Eurasian Shift… “Saudi Arabia’s recent reconciliations with Iran and Syria under Chinese-Russian guidance is perceived as a step toward reducing Riyadh’s dependence on the US, while also advancing Beijing and Moscow’s political and economic influence in West Asia… Against this backdrop, the Saudi decision to sign a Chinese-brokered deal with Iran without Washington’s involvement has been interpreted as a ‘middle-finger to Biden,’ in the words of former US State Department analyst Aaron David Miller. The Beijing Agreement was not only a positive development for China’s Belt and Road Initiative (BRI), but also for the Russian-led International North-South Transport Corridor (INSTC). Just as Moscow supports the BRI as a means of promoting multipolarity and decreasing US dominance, it has actively worked to advance the INSTC, which connects India by sea to Iran and then to northern Europe via Azerbaijan and Russia… On 29 March, 2023, Saudi Arabia announced its intention to become a dialogue partnerof the Shanghai Cooperation Organization (SCO), an institution founded by China to foster multilateral security and diplomatic coordination on regional issues in Eurasia.” – Geopolitics, Apr. 6
Prominent oil-producing countries are actively abandoning the U.S. dollar and ignoring Biden’s plea to boost oil production while he ignores abundant U.S. oil. This will not have a pretty end. It’s been known among financial circles since post-GFC that the dollar was to be guided through an “orderly decline.” George Soros uttered that sentiment in Oct. 2009 during an interview with the Financial Times. Here is the video in timestamp 1:56 to 8:09…
Also, consider this short video clip of the infamous NYFRB weekend meeting that failed to save Lehman Brothers from bankruptcy:
Let’s close up shop tonight with a stroll through Belgrade, Serbia, with views about de-dollarization acceleration and numerous references to published articles, and a brief on the “rainbow empire” from Donbas, Ukraine. Lastly, stack more gold and silver if you have the resources to do so. It’s about how many ounces you have. Take a few moments to review my latest gold and silver technical analysis published last weekend (thread).
De-dollarization, Saudi Arabia joins SCO, China & Brazil trade deal, UAE LNG in Yuan, NATO in Ukraine – Alex Christoforou w/The Duran, Mar. 30
The Rainbow Empire Is Alienating The Rest of The World – Gonzalo Lira, Apr. 6
Plan Your Trade, Trade Your Plan
Headline Collage Art by TraderStef
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