'The phrase petrodollar warfare refers to a hypothesis that one of the driving forces of United States foreign policy over recent decades[when?] has been the status of the United States dollar as the world's dominant reserve currency and as the currency in which oil is priced. #The hypothesis: Most oil sales throughout the world are denominated in United States dollars (USD).[1] According to proponents of the petrodollar warfare hypothesis, because most countries rely on oil imports, they are forced to maintain large stockpiles of dollars in order to continue imports. This creates a consistent demand for USDs and upwards pressure on the USD's value, regardless of economic conditions in the United States. This in turn allegedly allows the US government to gain revenues through seignorage and by issuing bonds at lower interest rates than they otherwise would be able to. As a result the U.S. government can run higher budget deficits at a more sustainable level than can most other countries. A stronger USD also means that goods imported into the United States are relatively cheap. Political enemies of the United States therefore have some interest in seeing oil denominated in euros or other currencies. -- In 2000, Iraq converted all its oil transactions under the Oil for Food program to euros. When U.S. invaded Iraq in 2003, it returned oil sales from the euro to the USD. The Government of the Islamic Republic of Iran takes this theory as fact. As retaliation to this policy seen as neoimperialism, Iran has made an effort to create its own Iranian Oil Bourse which has sold oil in Gold, Euros, Dollars, and Japanese Yen since its opening. The theory is supported historically by Iranian intellectuals as a move made by the American elites after World War II with the Bretton Woods Act, taking away Gold backing from the Pound Sterling and discreetly starting the eventual pegging of Gulf Arab Oil producers' currencies after Britain gave them independence in 1961 and 1971. These countries were further secured militarily after the Gulf War in 1990. This pegging of the currencies along with the exchanges being exclusively in USD in only two places, the IPE in London and NYMEX in New York City, has given the United States a near monopoly, with growing economies such as India and China waiting in line for orders. Critics say this revolutionary move by Iran in creating a rival market may also be one of the reasons for the ongoing energy-related US competition with Iran.'

'The war rhetoric from Washington towards Iran is again being ramped up - just ahead of the second round of high-level international talks on the country's nuclear program. US military top brass claim they would need just three weeks to defeat Iran's armed forces.' -- Let the dollar circulate

'Every year India spends $12 billion on purchasing oil from Iran, but now it is using gold instead of dollars. India might not be alone; China has suggested it would jump on board with India. New Delhi and Beijing account for 40 percent of the Iranian oil exports.' -- Competition is a sin!

Ingo Bischoff at 03:14 PM -- 'The USD, as exclusive "world reserve currency", is like writing checks which are never cashed. If a competing currency can cut into or replace the USD for paying oil bills, the "USD checks" would be presented for payment. That is the reason the U.S. military makes sure that nothing happens to the Saudis, and nothing happens to the free flow of oil out of the Persian Gulf. It's all about securing the value of the USD. As to Russia and China, they have the democraphic and natural resources to compete with the U.S. as an industrial economy. What they don't have, is a currency which can match the USD in value. Having gold to "back" a currency means nothing, unless the currency is redeemable. Would Russia or China create a "redeemable" currency? There is doubt whether China or Russia would accept Anglo-American monetary superiority voluntarily. A hot war to resolve the problem, is unlikely. Therefore, the fight is on the political level, primarily by turning the U.S. into a complete and openly controlled and managed economy ala Russia and China. In the meantime, the U.S. has been involved in Afghanistan to prevent the construction of an Iranian pipeline into China, and a Russian pipeline into the Indian Ocean. The Obama administration is a friend of the FED central banking crowd which determines the quantity of USDs. However, they are an ardent foe of the American oil majors which decide the "value" of the USD in connection with the Saudis and their fix of the oil price. The present presidential election must be understood in this context. NATO has evolved into a enforcement arm to assist the U.S. in securing the value of the USD. The trouble with the EURO must be seen in context of Europe having to support the value of the USD.'

'More rounds of ammunition were fired off in the global currency wars today, as six of the world's central banks including the Federal Reserve, Bank of England, and the European Central Bank coordinate to get cheap dollars to starving European banks. Meanwhile, across the pacific, China is cutting its reserve requirements by 50 basis points for the first time in nearly 3 years, a sign that the world's second largest economy and biggest exporter is now reversing its policy of trying to curb inflation and loan growth. We are joined by James G. Rickards, author of Currency Wars to discuss these issues, as well as the growth in gold buying and gold repatriation by foreign central banks, the world over. We also speak to Jim Rickards about the role he thinks the IMF and its global SDR will play in the years to come, and if the latest bailout 600 billion euro Italian bailout rumor may be just the opportunity for the IMF to step up as a player in the global currency war.' -- One paper currency to rule them all, One paper currency to find them, One paper currency to bring them all and in the darkness bind them.

Exporting inflation through the carry trade: '...if the money exits the economy via the carry trade, it will severely weaken both nations’ currencies and re-enter the economy through the back door of import-price inflation. For the proponents of QE, the lack of massive inflation is used as a justification for continuation of the policy. For those who are arguing for a return to gold, they can see that somehow, at some point in time, the massive expansion of the monetary base in QE countries must eventually see a rise in inflation. For the latter, they are not always clear in their understanding/explanation of why massive inflation has not taken place. However, their instinct that QE must eventually have a price is correct. Furthermore, the price is already being paid around the world as easy money has flooded into other economies. That in turn is creating distortions in markets, and those distortions will ripple back towards the countries that caused the problem in the first place.'

"The next time there's a Lehman-style crisis the bailout will not come from The Fed, it will not come from the ECB, it'll come from the IMF in the form of SDRs."

'For astute observers of recent history, we have seen what happens when people like Saddam Hussein or Libya's Muammar Gaddafi threaten to create gold backed currencies or international trade (in particular, oil) that could be settled not in US dollars – but gold. These people have very short life expectancies, to say the least. And here we have the little dictator from Venezuela coming along and demanding the repatriation of his country's gold from the Bank of England at that. This is really not going to go over very well with the powers that be, to say the least. The international oil-game has long been a significant piece to maintaining dollar dominance. Having nations go their own way and seek alternative means to settling that trade would be devastating to the dollar. Once again, neither Iraq nor Libya will see that happen – at least not now. Will Chavez get away with this plan? Or will he face a newfound Western attack unleashed, already in place to unfold when needed?'

'In response to the US dollar's declining value some citizens and states are making moves to mint their own alternative currencies. At least one has been convicted on counterfeiting charges and labeled a domestic terrorist by the US attorney. More are still trying to get their currencies circulating. With the Fed talking about more quantitative easing and the country facing trillions of dollars in mounting debt - who is terrorizing the US economy and dollar?' -- Competition is a sin!

'Dominant Social Theme: US politicians have got to act responsibly. Free-Market Analysis: The problem with this article is that it spins the theme that central planning works and that America's "wise leaders" need to do a better job of managing their country. Well ... they cannot. Central planning doesn't work. Regulatory democracy doesn't work. Socialism doesn't work. And fraudulent fiat- money-based monetary systems do not last. Russia and China are both members of the IMF, and as such, will likely be pushing hard for a new global reserve currency – one that will undoubtedly be managed by the IMF. This is not about America narrowly escaping a default on its debt and its politicians' weakness at addressing the debt ceiling sooner, this is about a collective attempt by Money Power to consolidate the world's monetary system under one roof and replace the US dollar as the world's reserve currency. This is about power consolidation and a final push towards a new world order.'

'The Arab Awakening is truly a regional if not global phenomenon. Of course, we have our own name for it: The Internet Reformation. The world will never be the same. The world's economy, when you come down to it, is a product of American military force. Use the dollar to buy oil or else ... But if the US and Saudi Arabia cannot control the spiraling disaster in Yemen, the next stop on the revolutionary train is Bahrain. And after that ... Saudi Arabia. And THIS time, events may not be easily salvageable. The Internet has educated the Arab world about its history. ...the elites chose to propagate a central banking economy in order to chase after world government, and now they are in danger of an eroding dollar reserve, which could eventually result in the creation of an entirely new (and uncontrollable) currency. Anyway, if Saudi Arabia falls, the dominoes may simply keep tumbling. Who pays any attention to funny little countries like Yemen anyway?'

'The City of London has a big problem. Once you have fallen back on the immoveable rigor of brute force you have to make sure that people understand that you will not back down. Not now. Not ever. If people cannot be frightened into supporting one-world-government (the point of it all) by fear-based memes, then they must be panicked into supporting it via military power. They must be made to feel that they have no other choice. But what if the biggest war – the most important war of the past 100 years – is also the war that you are evidently and obviously LOSING? What then? Well, if you are the top honcho of the Pentagon or Hillary Clinton, you will do ANYTHING to make sure your pending defeat does not become common knowledge and tabloid fodder. No, you cannot admit it! No how, no way! It will lead to a chain reaction, or so you fear. If people begin to understand that the entire Western world HAS LOST ITS MOST IMPORTANT WAR TO A BUNCH OF GOAT-HERDERS AND POPPY GROWERS ... what then?'

'Dominant Social Theme: Supporting the glorious Arab Spring is important. -- There are five countries that we count as successfully destabilized by the West (America in particular). They are Afghanistan, Iraq, Tunisia, Egypt and the Ivory Coast. The money shows where the West wants to go. ...there is a sudden scramble to bankroll efforts to steer these destabilized countries in the "right" direction. This is the stated goal then – regulatory democracies not Islamic republics. It is a predictable dominant social theme. Destabilizations have taken place and the citizenry has been freed! We do not put it past Western elites to be playing an even more subtle game. It is possible that Saudi Arabia is supposed to be destabilized to usher in a non-dollar, global currency. It is possible that the creation of a string of Islamic republics is still the ultimate goal (the better to support the "war on terror"). It is even possible that general chaos and regional war is the preferable outcome.'

'"If Gaddafi had an intent to try to re-price his oil or whatever else the country was selling on the global market and accept something else as a currency or maybe launch a gold dinar currency, any move such as that would certainly not be welcomed by the power elite today, who are responsible for controlling the world's central banks," says Anthony Wile, founder and Chief Editor of the Daily Bell. "So yes, that would certainly be something that would cause his immediate dismissal and the need for other reasons to be brought forward from moving him from power." And it has happened before. In 2000, Saddam Hussein announced Iraqi oil would be traded in euros, not dollars. Some say sanctions and an invasion followed because the Americans were desperate to prevent OPEC from transferring oil trading in all its member countries to the euro. A gold dinar would have had serious consequences for the world financial system...'

'"If Gaddafi had an intent to try to re-price his oil or whatever else the country was selling on the global market and accept something else as a currency or maybe launch a gold dinar currency, any move such as that would certainly not be welcomed by the power elite today, who are responsible for controlling the world's central banks," says Anthony Wile, founder and Chief Editor of the Daily Bell. "So yes, that would certainly be something that would cause his immediate dismissal and the need for other reasons to be brought forward from moving him from power." And it has happened before.'

'"If Gaddafi had an intent to try to re-price his oil or whatever else the country was selling on the global market and accept something else as a currency or maybe launch a gold dinar currency, any move such as that would certainly not be welcomed by the power elite today, who are responsible for controlling the world's central banks," says Anthony Wile, founder and Chief Editor of the Daily Bell. "So yes, that would certainly be something that would cause his immediate dismissal and the need for other reasons to be brought forward from moving him from power." And it has happened before. In 2000, Saddam Hussein announced Iraqi oil would be traded in euros, not dollars. Some say sanctions and an invasion followed because the Americans were desperate to prevent OPEC from transferring oil trading in all its member countries to the euro. A gold dinar would have had serious consequences for the world financial system...'

'...in a modern economy, anyone can save in anything. Retiring in 2030? You can put your entire retirement portfolio in 2030 pork-belly futures. If you don't want to spend your entire old age gnawing on pork bellies, you can trade these for other goods. So it's clear why the whole world needs one standard for Internet packets. It's also clear why it might want one standard for payments. It's not as clear why it needs a standard commodity (or security) of saving. Probably the easiest way to understand monetary standardization is to consider only the problem of restandardization: selecting a new standard when the existing standard collapses...finding the most overvalued good...this will become the standard trade: money, which is the bubble that never has to pop.' -- Hyperinflation: 'The new purchasing power comes from the exploding portfolios of gold's "early adopters." ...the broader global economy (still on the dollar standard for most prices) experiences a gold-driven wealth effect.'

'Dominant Social Theme: Get rid of the dollar and all will be well. An "expert" says so. -- The idea of course is that if Western elites can create something closer to a one-world currency, global government itself becomes a considerably more realistic proposition. The ramifications of course are profound. But there is no way to accomplish such a move without launching a huge promotional effort. The larger populations especially of the West must get used to the idea of a new currency and thus, almost every day (or week) we hear of a new initiative aimed at weakening or otherwise "broadening" the dollar reserve system and eventually replacing it. Of course, those involved aren't simply going to come out one day and announce that the new world order demands a new currency and therefore policies have been put in place to undermine the dollar (and perhaps the euro as well, new as it is). No, it will be done, as so much is these days, furtively.' -- Same piss, new bottle.

'The Anglo-American power elite is desperately trying to whip Africa in shape so it can take its turn in line as the next China... Western elites need a continent-sized evolutionary capitalist environment on which to lay off US Treasuries. The first nation to play this role was Japan, which absorbed almost US$1 trillion in Treasuries in return for having fairly open access to the US market to sell goods and services. The money that Japan shipped to American shores mostly funded American military might that in turn provided security to Japan and much of the rest of the world. With the willing help of China's elite families and communist political structure, China took Japan's place. But now China is gradually succumbing to the same price inflation that laid Japan low. China will have to raise rates again and again, and this will have an effect on its ability to produce the kind of easily disposable consumer goods that the West demands and purchases in quantity.'

'Today in the Middle East, either by stupidity or design, the Federal Reserve's perpetuation of the dollar and treasury debt Ponzi schemes is now dependent on the survival of a few dictatorial regimes staying in power in the Persian Gulf while surrounded by spreading freedom revolutions [initially foreign intelligence-engineered for regime change]. This is the most dangerous region in the world and the focal point for conflict between Iran and America, the freedom revolution and authoritarian regimes, Sunni and Shiite, Israel and the Arab world, vast oil resources and the oil needs of the West and China, and where the decision will be made to price oil in depreciating dollars or in other currency alternatives. Of all the conflicts and threats in the region, the question as to whether oil continues to be priced in dollars and the dollar remains the world's reserve currency for now and the risk of a US dollar and debt collapse are the greatest threats facing America and the West.'

'The revolutionary mood has been spreading across the Middle East and North Africa for almost three months. Syria is the latest country where people are marching to voice their anger. For them, it's about the freedom to speak out. Five people have reportedly been killed after security forces fired on hundreds of demonstrators in the southern city of Daraa. The crackdown was launched after multiple protests sprung-up, defying a ban on marches. In Yemen, at least 45 people died and dozens of others injured after snipers allegedly opened fire on workers who staged a walkout in an anti-government protest in the capital. In Bahrain, the army demolished the 'pearl monument' which had become a symbol of a month-long Shi'ite uprising against the Sunni monarchy. But the foreign interference in these countries is noticeably thin on the ground, compared to the focus being given to Libya right now.'

'The globalists have used the Libyan uprising to considerable advantage. The US has made a pretense of reluctance to get involved with the fighting and thus reinforced the idea that the UN itself is in charge of Western warfare. The power elite, wants to preserve the dollar/oil reserve conversion but at the same time it seems intent on general global destabilization. The "war on terror" becomes infinitely more feasible when there are actual Islamic states to focus on beyond Iran or the ephemeral al-Qaeda. Domestic authoritarianism is driven by perceived "enemies," and there is no doubt that Western powers are pursuing domestic civil rights crackdowns with a vengeance. These Western-inspired color revolutions are evolving in ways that are both predictable and unpredictable. But one thing is for certain; they are not what they seem. Where they are headed, and how they will ultimately change the geopolitical context remains uncertain. (Though increased chaos seems a given.)'

'...forget the talking head experts on cable, as the real story is not about Libya but rather about Bahrain and Saudi Arabia and the danger the color revolutions present to Anglo-American interests in the Middle East and the continued world reserve status of the US dollar. What happens now in Libya is anyone's guess because it has served its purpose well and the delays provided the time necessary for Saudi Arabia and the Gulf council to invade tiny, insignificant Bahrain. The nation's only importance is the opportunity for use as an Iranian bridge to Saudi oil. The small island nation produces little oil, but like the major oil producing regions of Saudi Arabia, it is home to a regional Shiite majority which could ally with Iran. Washington and London, controlled by Anglo-American elite financial interests have decreed that the color revolutions must end at the edge of the Sunni/Shiite oil producing regions. -- Remember, it's all about the dollar...'

"If the Japanese can't tap into their rainy day [dollar] fund when it's pouring out – what good is it; when can they ever tap into it?"

'Here's what you won't hear discussed on CNN or FOX or in the pages of the NY Times, etc.: The US dollar, priced in oil, became necessary for ALL nations to maintain as a reserve currency. That is if they wanted to buy any oil—as dollars were what the Saudis and the rest of the OPEC members would accept. This created the effect of an ever-growing demand for dollars. And like any Ponzi scheme, you need an ever-expanding base of demand, or else it crumbles, which they all eventually do. So, under the guise of spreading their new religion, democracy, Western elites have brought various developing countries under the control of non-elected world government agencies. If it were just about the oil supply, why wouldn't the US open up their vast oil resources in the mid-west? The answer is because it isn't really about oil at all. It is about maintaining the global oil trade in the fraudulent US dollar so that the 20th century game of wealth redistribution and mind manipulation can continue.'

'Russia is imposing sanctions against Colonel Gaddafi's regime, banning the exports of weapons and military equipment. It's part of mounting pressure for action against Libya, following fresh clashes between rebels and the government. Anthony Wile – founder and chief editor of online newspaper The Daily Bell told RT that the opposition in Libya is far from united.' -- "[The 'rebels'] are going to get help whether they like it or not and some would say that help is what has been driving this 'revolution' to begin with."

'We think that Western central banking policies may have deliberately introduced raging price inflation in developed and developing countries. We believe the sudden advent of food scarcity (to be followed by water scarcity) may be no accident either. All these factors are controllable via money power and we it would seem to us, arguably anyway, that this controlled – and expanding – chaos is meant to be. In America, Barack Obama has added trillions to the national debt and made George Bush's profligacy look almost modest by comparison. Again, we believe that this may be a deliberate destabilization of the nation's fiscal and monetary situation. Homeland Security's authoritarian depredations are acting as deliberate incitements as well. ...we would not put it past this shadowy cabal to purposefully begin to destabilize the euro as they have evidently destabilized the dollar. Far-fetched? Sure. But no more than many other events occurring in the world today.'

'The current monetary system is not correct, but replacing it with a hard money system would be a devastating blow to all those who cannot provide reciprocal value to others on an ethically fair basis. The US standard of living would have to be lost under a real money system. We really need to figure out how to provide more wealth to more people through a more ethical arrangement than the projection of force.' -- Got Goldmines?

"Art is whatever you can get away with." -- Andy Warhol

'“The physical market has now completely diverged from the paper market. The only way to fight it, and it can’t be done in the US, but it can over here in England (the Asians can), is to buy the foreign exchange transaction which is gold versus dollar, silver versus dollar. So essentially what you are doing is shorting... The point of all of these purchases is to eventually convert them to physical gold, or physical silver, 100% of them.” “If these guys converted all of their spot to physical, there would be a massive default today. No one in the US understands that, the Asians are laughing at these guys. It’s a way to unload billions and billions of dollars into the market. Looking at the futures market gives you a totally false impression of what is going on, this is going to totally blow up.” “... at some point these buyers will say, ‘I’m indexed, but I actually want to get all of this physical gold and silver now.’ When that happens, the game is over.”'

'Is there a recovery? Do you feel it, dear reader? Deep down in 'dem bones? We don't. We've explained the reasons why in dozens of articles: The fiat meltdown of 2008 was a meltdown of MONEY caused by the Internet's ability to expose the truth of a fraudulent central banking controlled monetary system and the power elite who benefit from the process of wealth redistribution. It was not caused by "faulty" economies specifically. It is the system itself that collapsed and at the base of it all is the myth of the mighty US dollar. What "melted down" in 2008, as we've long observed, was a 100-year-old central banking system. The mainstream Anglo-American media won't comment on this of course. We're still reading articles attributing the meltdown to the removal of Glass-Steagal or the mispricing of sub-prime mortgages. No, the same thing happened in 2008 that happened in 1929. The system collapsed. But this is the mother-of-all-collapses. It is the Big Bang of Black Swan events.'

'It is true, as we have maintained in the past, that the dollar will be hard to dislodge as the world's reserve currency so long as the Middle East continues to demand dollars for oil – and as the US is the world's leading military power, with a predominant strategic base in the Middle East, it is hard to see how that state of affairs will be upended. And yet ... as we have asked recently, what if the Anglosphere itself wants to dislodge the dollar? What if it does have strong relationships with China (and Russia) – and much of the apparent tension is so much shadow play? We asked these questions after the failure of the US to impose its will on the G20 regarding the dollar-yuan relationship. ...we will even make the argument (in support of this article's hypothesis) that the various yuan swaps are designed not only to destabilize the dollar (thus creating a demand for a new currency like the IMF's hypothetical bancor) but are providing building blocks as well.'

Who will build the roads?!?!

'Does the Western power elite actually intend to aggravate the current crisis? Is it ready for the troubles that will certainly arise from such a development? Does it have agreements in place with China for a deepening New World Order? ...we will end this article by concluding as we have before that we see significant cracks in the elite's ability to operate efficiently. We think it perfectly feasible that the Internet's truth-telling has caused Western elites to speed up whatever plans were laid in advance, but that this has not necessarily guaranteed success. On every front, we see trouble for Western elites, anyway. Scarcity memes are not believed anymore, financial systems are failing, central banks are held in increasing disrepute and even NATO's serial wars are misfiring. It could be, therefore, that the hegemony of King Dollar is maintained for a longer rather than shorter time as reality forces Western elites to take a step back even though their preference is to move forward.'

'The consumers of last resort.'

'Paul Craig Roberts: "The Treasury was able to unload a lot of debt thanks to "the Greek crisis," which the New York banksters and hedge funds multiplied into "the euro crisis." The financial press served as a financing arm for the US Treasury by creating panic about European debt and the euro. Central banks and individuals who had taken refuge from the dollar in euros were panicked out of their euros, and they rushed into dollars by purchasing US Treasury debt." -- We tend to use Occam's Razor when it comes to such analyses. The simplest explanation is best. Europe DOES have a sovereign debt crisis. The numbers seem fairly clear. We tend to doubt, too, that the entire world's financial markets could be organized to do the bidding of the US Treasury or the big European banks. Elite control doesn't seem to work that way. Sometimes an elite retreat is just that. ...the elite – which evidently and obviously is behind the EU – has a problem on its hands that it may not be able to solve.'

"The US had been borrowing against the growth of the illegal/criminal/terror economy [as the terrorists increasingly demanded more laundered dollars] so it was actually borrowing against the growth of its own 'enemies'. The Patriot Act was in reality a money laundering legislation. The Patriot Act completely changed how money flowed from one country to another country and simply shifted the epicenter of this [money laundering] activity from the US to Europe. How did the US fund its wars in Iraq and Afghanistan [since the money laundering was no longer going on inside the US economy and so the government wasn't benefiting from seigniorage]? It sold government bonds in the international markets [and cut interest rates from 6% to 1.2%]. This is the time we find the bubble of subprime inflating. That is the link we find between terrorism and the economic crisis. The country that paid $4tr to bankroll the wars was China."

'Beware of the bait being laid in front of you. Goldman Sachs is very much analogous to a queen in the chess game being played by the ownership class—the richest pools of private capital controlled by multi-generational wealthy families that hover above countries via the central banking system. It has been one of the most potent pieces on the board for many years, its most recent attack being on the entire nation of Greece. But as the endgame comes into view, perhaps the most brilliant play to reach checkmate is now the queen sacrifice. The Great Global Restructuring: What is the end game? The ownership class is attempting to restructure the world under a new financial system. We have had a global currency for a long time—the US dollar—but it has run its course. The ownership class needs a new debt-based currency and banking structure to maintain control as they pump the capital engine through the 21st century.'

'In "Black Gold Stranglehold," Corsi and Smith expose the fraudulent science and irresponsible politics that have been sold to American people in order to enslave them. #The value of the dollar and its effect on terrorism: Osama bin Laden's "war against America was fueled by his belief that the U.S. has stolen the oil of Muslim countries. At the core of the issue is bin Laden's perception that America has paid for oil, a hard commodity, with paper dollars that are no longer backed as they once were by the hard commodity of gold." #How high the price of oil?: "Today, the U.S. oil industry is sitting on a quantity of oil reserves that has never been higher. Still, we have built no new refineries, and the refineries in operation are producing at or near capacity. The picture that emerges is one of industry conglomerates simply sitting on large reserves and waiting for oil prices to go even higher. At some point, increased gasoline prices become an inevitable drag on the economy."'

'Lindsey Williams talks about his first hand knowledge of Alaskan oil reserves larger than any on earth. And he talks about how the oil companies and U.S. government won't send it through the pipeline for U.S. citizens to use.' -- Artificial supply shortage/price inflation scheme to prop up the dollar and defend against supply from cheaper sources. Iran cited as wanting to sell their oil in euros (as did Iraq).

Quadrillion Cotton-Candy Derivative Debt Ponzi. Daddy, what did YOU do in the Greater Depression? I LOL'd. -- 'Max Keiser and co-host, Stacy Herbert, look at the scandals behind Goldman Sachs' fictional exchange rate swaps and whether these same fictional derivatives could have been sold to China, where the PLA is calling for an economic punch against the US with a Treasury dump. Keiser also talks to the Reverend John Strain, the man behind Save Our Savers, a new campaign in the UK to force governments to stop writing policy to encourage speculation.'

'The USDA—by manufacturing the data needed to keep supply and demand in balance—has ensured that agricultural commodities are incorrectly priced, which has lead to overconsumption and has guaranteed disaster next year when supplies run out. -- The world is blissful unaware that the greatest economic/financial/political crisis ever is a few months away. -- The true financial crisis begins when the world realizes that there are couple months food supply missing from 2010. The reaction will inventory building—hoarding—at all levels. Major food producing nation will export bans (India has already banned food exports). Producers, Middlemen, And Households will rush the acquire supplies. All this hoarding will worsen the crisis by throwing supply and demand further out of balance: export bans cut supply available on international market and inventory building increases demand. Food prices will more than double.' -- Messy.

'Japan won’t be the only country to dollarize. Get ready…the dollar love you are going to feast your eyes on will be the next Black Swan in and of itself. -- Dollarization is nothing new under the sun: just an extreme from of exchange-rate pegging that strips a state of its monetary authority but leaves unchanged its fiscal authority. At its essence, dollarization is just another riddle of globalization. In one way it centralizes power; in another, it devolves it. -- #Creditors initialize dollarization and make it nearly irreversible, because they anchor their claims independent of government intrusion, and well in advance of any potential inflation increases. #The world interest rates and asset prices will be even more tightly correlated going forward -- People decentralize away from localized nation-state influence, but the increased interconnection of all people and places dramatically reduces the variance of possible behaviors at the global scale.'

'With sovereign risk we are facing the second wave of derivative exposure. We will either see default or cooperation. If cooperation comes in a re-valuation of the dollar it will not be as most people expect. The trend is YEN Euro towards parity, then a reset of obligations leaving China as bag-holder along with oil suppliers.'

Stacy: "America has gone bonkers."

'When the British Empire was replaced by the American Empire as the new, dominant economy, the entire world was on a gold-standard – preventing the sort of insane accumulations of debt, and reckless money-printing which characterizes the global economy today. There has never been a scenario where the global economy has attempted a transition from fiat currencies back to a gold standard. Given that such transitions never go smoothly when even a single economy has made such a move, significant economic disruptions are a certainty. -- ...once such a transition was announced, the consequences would be obvious. Given a choice between holding “fiat” U.S. dollars - “backed” by nothing but a bankrupt U.S. economy – and gold-backed renminbi, we would witness an economic stampede of Biblical proportions.'

'China is willing to take whatever “hit” that it must on the dollars which it is holding (through currency swaps), because it is effectively “sterilizing” global trade from the cancerous effect of the biggest flood of greenbacks in history (and the horrific inflation they would cause). -- The second aspect of China's monetary campaign is to improve the “backing” of the renminbi through a “hard asset”: gold—instead of the worthless paper of Western bankers. Indeed, this is clearly the favorite means of China's government to rid itself of dollars—by swapping them for gold. Now, every time the anti-gold cabal drives down the price of gold a few percent, the Chinese government steps in, buys the cheap gold, and rids itself of unwanted dollars. -- With the renminbi taking over as “reserve currency” and with it rising in value against other currencies, suddenly the renminbi becomes the vehicle for all economies to rid themselves of U.S.-imported inflation (through the use of the dollar).'

'The search is on for a valid yardstick, a measure of monetary value that has not been (and cannot be) distorted by central banks’ firefighting and wrecking tactics. The search is on for the perfect hedge. What would be the ideal characteristics of such a numéraire? First, it would be in fixed physical supply. Second, it would be resistant to weather-related influences. Third, its ownership would be diffuse, rendering futile any attempt to restrict supply through a non-competitive structure. Fourth, it must be freely tradable. Fifth, there would be no futures or options markets attached to it: #1. Arable land with a dependable climate #2. Oil refining capacity #3. Electricity generating capacity #4. Water treatment capacity #5. Drinking water, bottled or piped #6. Coastal access, harbours and ports #7. Palladium/platinum/diamonds #8. Real estate in long-standing, distinctive locations #9. Antiques, fine art, stamps and coins #10. Commodities without futures and options markets'

Pimpocracy: How drugs [and war] money saved the global banking system. Strategic defaults as 'stealth stimulus'. New 'war on drugs' as subsidy to the military industrial complex. And more dollar death spiral.

'The move will give the hyper-rich club of oil exporters a petro-currency of their own, greatly increasing their influence in the global exchange and capital markets and potentially displacing the US dollar as the pricing currency for oil contracts. Between them they amount to regional superpower with a GDP of $1.2 trillion (£739bn), some 40pc of the world’s proven oil reserves, and financial clout equal to that of China. Saudi Arabia, Kuwait, Bahrain, and Qatar are to launch the first phase next year, creating a Gulf Monetary Council that will evolve quickly into a full-fledged central bank. -- “The US dollar has failed. We need to delink,” said Nahed Taher, chief executive of Bahrain’s Gulf One Investment Bank.'

Proxy war: exporting the Afghan ethnic civil war to Pakistan to prevent a non-dollar resource corridor between Iran and India/China.

Peak Greater Fool? -- 'This morning there's a nasty rumor on the wire - that Japan may be intending to sell US Treasuries. Their purported reason for this, of course, would be to weaken the Yen. Selling Treasuries would have this effect since it would strengthen the dollar, and in a fiat monetary system all values are relative. Here's the problem: The first seller wins in these circumstances, since price is essentially "coupon x duration." If Japan starts selling in size rates on the long end will go materially higher. This will whack the daylights out of the cash price for these bonds. Who else has a lot of these things? China. Stampede risk here? Yep. Danger to our government's ability to finance its profligate spending? Uh huh.'

Notes on 1–4. On the dollar: "There's a demand for a global currency that's outside the global speculation system." -- On 'global solutions': "What you're watching is a fundamental reengineering of how the world is governed, it's intentional and it's planned." -- On 'cap and trade': "You have a system that allows the most polluting to continue to pollute and get a *get out jail free* card by making life miserable for people who have the lowest footprint." -- On climate change: "There's so much disinformation." -- On global government: "Are we going to have democracy or be part of system where invisible forces control top-down through unbelievably complex systems a lot of which are being engineered by using the environmental issues and environmental community—in most respects they're unknowing about it."

Short the dollar on credit by buying gold. (Disclaimer: Not intended as financial advice, but advocated for central bank-killing righteousness.)

ORLY?

13:12: "'Cash 4 Clunkers' was a Chinese program because China wouldn't take US dollars for their exports; we had to send them a bunch of metal and steel for them to give any type of credit to the US. A lot of people don't know that."

'...Mr. Medvedev called for China, Russia and India to “build an increasingly multipolar world order.” What this means in plain English is: We have reached our limit in subsidizing the United States’ military encirclement of Eurasia while also allowing the US to appropriate our exports, companies, stocks and real estate in exchange for paper money of questionable worth. As matters stand, they see the United States as a lawless nation, financially as well as militarily. How else to characterize a nation that holds out a set of laws for others – on war, debt repayment and treatment of prisoners – but ignores them itself? America has become a deadbeat – and indeed, a militarily aggressive one as it seeks to hold onto the unique power it once earned by economic means. The problem is how to constrain its behavior. -- US officials wanted to attend the Yekaterinburg meeting as observers. They were told No. It is a word that Americans will hear much more in the future.'

"From a game theory point of view, it makes sense for the US to declare default earlier than later." -- Predicts UK government raid on safety deposit boxes to fill a £110bn spending shortfall.

'#When the global economy truly recovers oil will skyrocket up to or beyond the $150 where it was in late 2008. If the dollar is indeed still "overvalued" and going to 40 as many technicians predict, oil will likely reach $300 a barrel. This will in turn drive gasoline prices north of $6, heating oil will reach $7-8/gallon, and diesel will be commensurate with heating oil. #This will in turn decimate the trucking industry. Now you know why Buffett bought BNI. Many things he may be, but dumb isn't one of them. Trucks will of course remain for terminal-to-door deliveries but for long-haul they will simply be uneconomic. Those who currently are employed in this business will lose their jobs. All of them. #The middle class will be decimated. Those who live in suburbia, who are primarily middle-class Americans, will find themselves faced with commute costs that are double or more what they pay now.'

'The Reserve Bank of India (RBI) may have sold US Treasuries to fund its gold purchase from the International Monetary Fund. Last week, RBI purchased 200 tonnes of IMF gold for $6.7 billion, increasing the share of gold in its reserves by 250 basis points. “This purchase suggests that the Indian monetary authorities are seeking to change the composition of their foreign reserve holdings, most likely diversifying away from US Treasury securities,” said Nikhilesh Bhattacharya, an economist with the research arm of ratings firm Moody’s in a report. He added that the move was prudent as India needed liquid assets as a buffer against sudden, destabilising capital outflows.'

Roubini: "[O]ne day this bubble will burst, leading to the biggest co-ordinated asset bust ever: if factors lead the dollar to reverse and suddenly appreciate – as was seen in previous reversals, such as the yen-funded carry trade – the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments." -- ...dollar unwind risks are based on both a short squeeze as well as another unsecured/FX swap market implosion, most likely in some form of vicious circle.'

LOL. 'Deposits are insured.' Eggs rot in their shells.

Terrible audio, so here's the choice snippet: "...you wonder to yourself when you're reading about the Dutch tullip craze or the Salem witch [wise] trials, you wonder how is it that people could be so stupid. Well, you don't have to wonder, we're living through it right now! We know how people can be so stupid because they're being that stupid all around us! And I'm sure that when people write in history books about this time period, people are going to read in awe about this mass delusion where the whole world somehow thinks they have to prop up the US dollar; that somehow every economy feels that they owe their success to selling products to a group of people that can't afford to pay for them." -- It's the protection racket, stupid!

'...had the Fed not stepped in, the rest of the world would have simply collapsed as the $6.5 trillion dollar funding gap closed in on itself, causing a indiscriminate selling off of all dollar denominated assets. -- BIS: "In providing US dollars on a global scale, the Federal Reserve effectively engaged in international lending of last resort." ...the Fed's printing press single handedly guaranteed the way of life for the UK, the Eurozone and Switzerland with unlimited funding! -- ...the trade de jour is once again the dollar funding one, although unlike before when the Yen was the carry currency of choice, this time it is the dollar itself, positioning banks for the double whammy of not just a dollar funding shock, but one coupled with a potential massive and historic short squeeze. If and when an exogenous event occurs, not even $6.5 trillion in Fed swap lines will be sufficient to bail out the world economy.' -- *backs away from the computer* !!!

'The deal to support the shutdown of the Petro-Dollar contract between the US and Saudis represents the latest big piece to the Comprehensive Chinese Plan. Note the Yuan Swap facility to aid global trade (check Brazil). Note the transition to the Yuan in the Chinese banking deposits. Note the ASEAN emergency fund in Yuan accounts. Note the announced dishonor of OTC derivative contracts with a declared Stop Loss. Note the accumulation of gold by the Chinese central bank and permission for citizens to save in gold also. The Chinese have embarked on a comprehensive plan that escapes Western financial media analysts. This latest development is a climax step that changes gears of the transition. -- The urgent message is clear. The first nations to discard the USDollar and embrace even an IMF global currency basket, will emerge as the next leaders. The basket is a Straw Man transition device toward global gold-backed currencies, of which there will be at least three eventually.'

Creditor nations are issuing denials because they don't want to talk down their dollar holdings. Oil-backed currencies are the new black(gold).

'The US, as the country, is economically and militarily powerful enough to declare that it no longer honours its debt and its currency. Effectively the dollar could be written off as a currency. As around two thirds of world reserves are held in dollar they will be written off. The US will have no debt. Along this action, the US will introduce a “new dollar”. Any international debt will be negotiable. Some nations on which the US depends (like critical suppliers of commodities, e.g. crude oil) may get a favourable treatment. Other nations on which the US does not depend and especially those that may be perceived as prospective threat, rival or with conflicting interests may just get nothing. As a result they will be weakened. In a "true" spirit of globalisation, the US will unload the costs of coming out of this crisis onto the rest of the world. ...there is a long standing tradition in the US business culture of going bankrupt...' -- Well, they did default in 1971.

'Beijing does not need to raise money abroad since it has $2 trillion (£1.26 trillion) in reserves. The sole purpose is to prepare the way for the emergence of the yuan as a full-fledged global currency. "It's the tolling of the bell," said Michael Power from Investec Asset Management. "We are only beginning to grasp the enormity and historical significance of what has happened." -- ...this is more than a dollar problem. It is a mismatch between the old guard – US, Europe, Japan – and the new powers that require stronger currencies to reflect their dynamism and growing wealth. The longer this goes on, the more havoc it will cause to the global economy. The new order may look like the 1920s, with four or five global currencies as regional anchors – the yuan, rupee, euro, real – and the dollar first among equals but not hegemon. The US will be better for it.'

On the dollar carry trade and dollar's reserve status.

'Expect thunderous denials.'

"They don't want to finance America's wars anymore." -- Constitution time.

'In the most profound financial change in recent Middle East history, Gulf Arabs are planning—along with China, Russia, Japan and France—to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. -- The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. -- The current deadline for the currency transition is 2018.' -- !!!

Video: Jim Rickards on the unwinding of the dollar ponzi scheme and the new ponzi startup with SDRs.

'Zimbabwe's wily street hawkers have finally found a use for the worthless $100 trillion banknotes that were issued here in January. They sell the bizarre banknotes as souvenirs to foreign tourists for $2 each.' -- Hehe. -- 'The dollarization (and rand-ization and pula-ization) of the Zimbabwean economy has finally slain the dragon of hyperinflation, providing the first fragile signs of hope for a devastated country. While the junking of the Zimbabwean dollar was a blow to the ego and power of Zimbabwe's bloated central bank, the radical move to adopt foreign currencies is still one of the fastest ways to kick-start any economy that is ruined by inflation and money-printing excesses.' -- Another customer for dollar specflation. Crazy days.

'The US$ exchange rates will be heavily subdued, with any rebounds totally smothered, resulting in a relentless Gold rise with gusto. -- The coordinated and systematic ruin of major currencies, through monetizations, through vast federal deficits, through sustained near 0% official rates, and through chronically insolvent national bank systems, will assure that the Gold asset will be a favorite for the USDollar Carry Trade for at least a couple years, maybe more. Furthermore, installation of the USDollar Carry Trade will assure that No Exit Strategy will be available to the USFed also. Wall Street firms will participate in this free lunch carry trade, just like all others. Wall Street will not permit a USFed rate hike to firm the US$ exchange rate. Talk about a strong perverse factor behind the USDollar. The USFed will justify its decision not to hike rates, not to halt money creation, all the while discussing theoretically an Exit Strategy. Try not to laugh too hard!'

On specflation and the casino gulag.

'My argument was that China would, as soon as a $US rout looked realistic, sell hard and fast into the market, and seek to recover as much value from the $US holdings before hitting the bottom. In the economic aftershock, China will still be left with significant holdings of US assets. In some respects, these will be of little value. However, my speculation is that this would provide a vital element in China's bid for economic ascendancy. In particular, they could use their new found economic strength to go on a shopping trip in which they would seek to purchase leading US companies, and in particular companies with leading edge technologies. The economic position of the US government will be so dire that they will seek any form of an infusion of capital and overseas currency into the country, and will not be in a position to block any Chinese moves on US companies, In this scenario, China might be able to jump up the technology ladder at a rate that would otherwise be impossible.'

'The US dollar IS our debt to each other and to the world. The US dollar is backed by all the goods and services WITHIN the United States. Legal tender laws say it is so. The dollar currently buys many things outside of the United States, but there is no law that says it always will. The only law protecting dollar holders all over the world says that their dollars can be exchanged INSIDE the US. So when Ben Bernanke issued $500 billion in swaps to 14 different foreign central banks in 2008, each one of those dollars became a new claim against us, the US. It is here in the US that those dollars are legal tender. No where else. No where else in the world is anyone required by law to accept those dollars for real goods and services. -- [Though there's acceptance by agreement i.e., Bretton Woods or by threat of force eg. Iraq] -- When new dollars are created through the credit system, they are backed by expanding asset values and by the debtor's promise to work them off.'