Nov 26, 2010
The United States maintains its ability to print endless amounts of money by keeping the dollar as the worlds reserve currency. Countries trade in U.S. dollars and most of the worlds oil is purchased with it. Because the dollar is the global reserve currency countries buy our treasury bonds which keeps our bankrupt government afloat.
If the U.S. dollar stopped being the reserve currency then the United States government would no longer be able to borrow endless amounts of cash and the value of the dollar would drop creating hyperinflation in America.
When Saddam Hussein threatened to start selling Iraqi oil in euros the United States invaded and destroyed his country. The same can be argued for our current conflict with Iran. It has nothing to do with development of nuclear weapons but is designed to stop Iran from trading oil in Russian ruble’s.
China and Russia just dropped the U.S. dollar as the reserve currency used to trade between the countries. Not only that, but China has agreed to directly trade in rubles for Russian oil and natural gas. Russia is the number two producer of oil in the world. Unless stopped this arrangement will quickly spread to other countries in the region severely threatening the U.S. dollar.
St. Petersburg, Russia – China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.
Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.
“About trade settlement, we have decided to use our own currencies,” Putin said at a joint news conference with Wen in St. Petersburg.
The current saber rattling on the Korean peninsula has nothing to do with North Korea developing nuclear weapons or the recent border skirmish with South Korea. The conflict is about China and Russia dropping the U.S. dollar.
The United States is demanding China restrain North Korea and is sending the George Washington Carrier Group into the Yellow Sea to make the point. If the United States attacks North Korea, China would be forced to defend its communist trading partner and ally. This would quickly escalate into a global conflict. Is China willing to commit to that course of action or will they back down and restore the U.S. dollar as their reserve currency.
To survive the United States must maintain the U.S. dollar as the unquestionable global reserve currency. In 2010 the United States government spent 1.2 trillion dollars on just it’s military and homeland security budgets. That was borrowed money raised from selling Treasury bonds to countries around the world…especially China.
Globalization and offshoring of American jobs has destroyed the U.S. tax base. Without that reserve currency status it will be impossible for the United States to raise the money necessary to maintain it’s vast military let alone take care of any domestic problems.
If the United States can no longer borrow to fund its excesses the government programs propping up the stocks markets will collapse. Unemployment will skyrocket as the government quickly downsizes and millions of Americans who depend on social safety-net programs such as food stamps start to starve.
Black Friday Riots The Norm As Essential Supplies Become Scares
As China ends its exports to the U.S. store shelves go bare and riots break out over food and toilet paper. Witness the Black Friday chaos for a limited supply of toys if you want to see how the American public will react to a limited supply of food!
Everyone should be stockpiling food and develop essential gardening skills. It’s simple and your best hedge against hyperinflation and food shortages. A three year supply of food is worth it’s weight in gold when the grocery shelves are stripped bare.
The American economy cannot recover…you must be prepared.