by Ramin Mazaheri for the Saker Blog
There is a lot of chatter about how the coronavirus economic overreaction and subsequent US bailouts will end the dollar’s reign as the global reserve currency – such wishful thinking is shortsighted and ignores even recent Western capitalist history.
Last November, in a then-boring but now-prescient 10-part series (I socialistically re-interpreted ex-Wall Streeter Nomi Prins’ book Collusion, which chronologically detailed the QE-spreading collusion between G20 central banks since 2008), I wrote the following in Part 3: QE paid for a foreign buying spree: developing countries hurt the most:
“Yet by flooding the world with trillions of dollars via QE the US was able to, paradoxically, maintain dollar dependence despite their crimes. The US dollar share of global reserves today is 62%, almost exactly what it was in 2008. Combined with the other source of the crisis – the euro – the two combine for 82% of global reserves. By comparison, the yuan – which so many predict is about to dethrone the dollar – is at below 2%; I wouldn’t hold my breath.”
But corona is different, right? Two percent and 62% will suddenly change places, right?
No, more QE is more of the same thing, and this is a “thing” which has worked exactly as designed; it is also a “thing” which is never broached in the Mainstream Media: “A way to create debt traps which increase Western control over their neo-imperial subjects. … Neoliberal-capitalism financial policies must be viewed as a neo-imperial tool, of course.”
People are acting as if Western neoliberalism hasn’t worked, LOL? It has worked spectacularly well… but only for their 1% and not for “the nation”, exactly as designed.
Many fine semi-dissident commentators apparently do not follow high finance, nor can they interpret their actions, even though high finance is the West’s vanguard party (thus the theme of my recent series – “bankocracy”); they often incorrectly focus on an easier-to-grasp storyline of nationalist competition, which (like racism, sexism or tribalism) simply cannot ultimately take precedence over class warfare.
I’m not being dogmatic – this simply provides the fullest explanation of economic events. Reject what socialists could call the “conspiracy” of the 1% via class warfare? Then you likely move on to absurd, unprovable “conspiracy theories” involving secret cults, elaborate handshakes, ritual sacrifice, etc.
This is the bottom line which (whom I will call) “dollar-demisers” simply do not understand: For better or for worse (certainly worse), the US and their greenback are still the gold standard when it comes to 1%er perceptions of a safe harbour in a crisis.
This will hold true in 2020 just as it did in 2008.
Many semi-dissident analysts unwittingly take a rather Trotskyist view that capitalism will eventually implode under the weight of its own contradictions. It won’t – some rats always find a way to survive a sinking ship, eh? Thus, open socialist combat is the only way to defeat modern Western capitalism, and also to satisfyingly explain what is going on in the Western Great Recession/Depression 2.
So maybe the yuan will become the dominant currency… but not in two months, nor two years – maybe two decades? That’s a big “maybe”. In my lifetime, I think.…
Until then, please believe me: Western globalisation/neoliberalism has a LOT of ammo, clout, clients, banks, real money, real gold, fake money and paper gold to keep their mighty dollar on top. Socialism teaches us: it is NOT just Americans who will deploy these weapons.
Just look at what high finance did when the corona crisis hit – journalism is just recent history
As soon as the lockdowns hit Western Europe you couldn’t buy a dollar from high finance. Why? Because people were panicking and wanted a safe haven (and had huge bills to pay) – they did not run to the yuan, but the greenback. The yuans ran to the greenback!
(Some Western commentators often act as if China doesn’t know what they are doing by being the second-biggest holder of US Treasuries – as if Beijing is somehow being suckered or something? Similarly, but from the other side of misunderstanding, Trotskyism faults China for playing along with capitalist-imperialists in order to strengthen Chinese socialism. Both views are absurd.)
As the corona overreaction progressed, and even as it became clear that a country with third-world inequality and gaping structural flaws was about to go on lockdown and impoverish half its populace within a season, this country’s currency did not drop in value as it should have – I am speaking of the US.
Fair? No. Reality? Proven. Predictable? Entirely.
Equally unprecedented during these March days was a historic run on physical gold, history’s nostalgic (not current) safe haven, which I would have bought if I could have found any (I actually did not even look, as I have no money). This was a major step in a vital historical trend – let’s call it “fiat regoldification” – but please note: here we are, still using fiat (paper) money. Please note #2: individual 1%ers are still buying (parking their assets) way more in dollars than they are in bars of gold, even if central banks have edged more towards gold than dollars only recently.
What also happened in March? Just like in 2008, the US immediately opened more “currency swaps” – loaning scores of billions of dollars to their main client states to satisfy dollar demand… and make them even more beholden to maintaining dollar supremacy.
And by the end of March the US announced (effectively) $6 trillion in new bailout money. Yet no dollar devaluation, still? Return back to that 62% figure: yes, dollar dominance didn’t increase significantly since 2008, but there was no stagnation because the total reserves held by all central banks has expanded by more than half since 2008.
The “dollar-demisers” just don’t get it – they must live in nationalist vacuums? Germany just announced $1 trillion, after all, right? (France finally announced theirs – just $120 billion… because the global 1%’s plan continues to be “strangle the French model”.) Many nations have announced a similar “devaluation” as well, and they didn’t benefit from the dollar’s perception of unrivalled stability to begin with. The US $6 trillion comes within this critical context. But now extend out your timeframe to 2008 – how much new money has been printed across the G20? In this global context of recent history $6 trillion isn’t much, certainly not enough to ruin the dollar.
But beyond the unshakable perception of stability, the dependance entrapment, and the global money printing bonanza, what’s the biggest reason why everyone is rushing to the dollar? Simple – everyone else’s debt and collateral sucks even harder than it did in 2008: Eurozone bonds, corporate bonds, mortgage/credit card/auto loan-backed securities, overinflated stocks, overinflated real estate, overinflated Da Vincis, Third World investments about to go bust, any-World investments about to go bust post-global corona lockdown – US bonds are still the best, safest place for the 1% to park their savings.
So – don’t get it twisted – the dollar is now stronger than ever in 2020.
Just check the dollar index – it’s up over 20% since 2008, even though they were the cause of the crisis, and for the reasons I listed. The dollar will only strengthen post-corona, as usual: it’s a crisis, after all.
You’re underestimating people, and you underestimate how much room the US has
Here’s the thing about people not understanding high finance – they also are too dismissive of them (like with China’s treasury-holding bankers): People mistakenly assume that US bankers are a bunch of rich-kid idiots, and that they do not realise that being viewed so positively by the rabid capitalists of the global 1% undoubtedly gives them unparalleled leverage. No – the US is well-aware that its money machine can go brrrrrr, to use the top meme on this subject, and the dollar will not crater.
So when Neel Kashkari goes on TV and says the Fed has an “infinite amount of cash” it is wrong to make fun of him – the focus should be on the fact that he is taken SOMEWHAT seriously despite making such an economically-illogical claim. He is taken seriously because that is HOW VERY much money the US can print before they imperil the dollar’s reserve currency dominance.
The dollar is used in 40% of the world’s debt, 80% of global payments and nearly 100% of its oil sales – again: the world’s rich want to use dollars. Again, China doesn’t even want to use their own currency – in the past two decades dollar-denominated debt has exploded, and this trend was led by China. And yet we should assume the yuan is on the cusp of replacing the dollar? This unwind will not, I’m sorry to say, happen at corona-speed.
How much room does the Fed have to inject? A lot, depressingly.
(So we’re clear: What is this injecting doing? It is assuming the bad debts/failed investments of multinational high finance dominated by NYC. That total is not some infinite, abstract, undefined mathematical variable. This is what the phrase “picking the winners” means. Nobody is holding a marker with “quadrillion” after the number. )
From $2 trillion in 2008, in late March it was suggested it could hit $10 trillion to stem the corona craziness. That won’t be enough – and the hidden “10-to-1” lever in the $450 billion section of the $2.2 trillion bailout implies that already – but the US probably has $20-30 trillion worth of room before difficulty sets in.
People will fly off the handle at that (mainly Austrians and Chicagoans), but they don’t seem to comprehend reality: the unparalleled demand, the importance of competitive context in currency wars, as well as the political reality that the US as well as their allies (capitalism is collusion) will use all their political and probably military tools to postpone the monetary/political/historical revolution which is fundamentally implied by the end of dollar dominance.
And there’s even more advantages, because bankers are not as dumb as you think.
First of all: duh, they aren’t going to inject it overnight. Did they inject their $4 (or $8) trillion since 2008 overnight? Of course not – the US colluded with other G20 nations for over a decade so that the QE machine could keep going “brrrrrrr” – just at different nodes, as Prins’ books an my series related. The Fed works with other G20 central banks, it must be recognised – nationalism does not supersede a class analysis.
Secondly, it’s crucial to recall that the global 1% forced first Japan then the Eurozone (the biggest competitors of the US, at least until the 2008 crisis & response allowed China to rise so high) to take on austerity, bailouts and multiple Lost Decades which made their debt-to-GDP ratios explode. So this bringing down of the competition is only giving US Treasuries more leeway and power. Modern capitalism IS always international collusion – this didn’t start in 2008.
Of all the major Western economies only Germany and South Korea have good debt-to-GDP ratios, but Washington the global 1% have simple solutions to force them to increase their debt in order to protect THEIR dollar: Korean reunification, and an end to German strangulation of the Eurozone. If you don’t think they would force to protect THEIR dollar, then you fatally overrate the power of nationalism.
This 1%er collusion is what so many good commentators just can’t see because they reject the class struggle. This is why they are rather absurdly expecting to use only yuan – or maybe euro or yen or loonies – by next Tuesday. The reality is that a socialist victory against predatory capitalists is long, hard and unyielding – this provides great inspiration and creativity when accepted. It does hurt your job opportunities in journalism, though. But many journalists and analysts are happy with just complaining.
So the corona bailouts are NOT going to end global dollar dominance, for all the reasons I’ve listed.
QE provokes inflation, but do you understand inflation? I mean, REALLY?
Corona’s “Great Lockdown” is sure to provoke falls in subservient currencies, but it won’t cause the dollar to double in value, either. That won’t be permitted:
A weak dollar hurts the average American but it certainly helps the sectors of society supported by the 1%: export-driven corporations, debtors (banks) and landlords (rentier exploiters). I explained this in my “bankocracy” series – Part 5: Understanding the West’s obsession with inflation. The 1% only cares about inflation which hurts their investments – they could not care less about rises in the price of bread, metro tokens, rent, etc. This is precisely why the MSM keeps saying how inflation is low… when 99% of their readers think, “No it isn’t.”
Due to this widespread misunderstanding/misinformation regarding inflation, many commentators confuse a rise in domestic prices for key goods with the international strength of the dollar. The former is a domestic concern – domestic inflation will be a result of money-printing. Domestically the dollar has lost an estimated 80% of purchasing power since Nixon went off the gold standard. However, the latter is an international concern and – while no one stays at the top of the hill forever – the US dollar is (of course!) protecting and re-protecting itself via international 1%er collusion to stay there as long as possible regardless of the effect on the average US consumer. What “1%er patriotism” are you talking about, and in the age of globalisation, too?!
Yes, rents and food will go up: No, the dollar will not stop being the international reserve currency. Yes, because you won’t openly support socialism you suffer under a bundle of unjust contradictions and cognitive dissonances.
Again, a class analysis provides a fuller explanation of corona-related high finance machinations than does an analysis based around mere nationalism.
But many of you older readers can, sadly, take this to your graves: the dollar’s dominance is unquestioned and will be defended by the international 1%, just as it has been since 2008, and just as it has been since it ascended the bloody capitalist heap. The 1% has never known eras, epochs, patriotisms, etc., and certainly not since the rise of industrial capitalism.
The problem is not QE, nor is it the “dollar system” – it is the entire system of values encapsulated by “capitalism-imperialism” and undoubtedly in “capitalism with Western characteristics”.
You can find the odd article like Pandemic proves there is only one world reserve currency, but this article gave the real reasons why; only a socialist microscope can reveal the core economic truth.
I could be wrong – and so could that article – about 20-30 more years of dollar dominance. Maybe the corona overreaction will set off a Great Depression so unmanageable that a socialist revolution occurs quite soon? That’s the only possible way the dollar is dethroned earlier.
(Of course, according to logic, any uprising which is not openly pro-socialist – and is thus pro-capitalist – cannot be a “revolution” at all. The development of post-corona “coups” would produce regimes which would – at best – still certainly collaborate with the dollar for national benefit.)
The West has no solution – wants no solution – wants only more of all this capitalist-imperialist chaos for the 99%… and thus corona immediately kicked off the “solution” of QE Infinity. No Western nation’s 1% is going to stop colluding to make that continue.
So keep your yuan under your mattress – infinity won’t end next Tuesday. I hope you find this article useful in your leftist struggle!
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Corona contrarianism? How about some corona common sense? Here is my list of articles published regarding the corona crisis, and I hope you will find them useful in your leftist struggle!
Capitalist-imperialist West stays home over corona – they grew a conscience? – March 22, 2020
Corona meds in every pot & a People’s QE: the Trumpian populism they hoped for? – March 23, 2020
A day’s diary from a US CEO during the Corona crisis (satire) March 23, 2020
MSNBC: Chicago price gouging up 9,000% & the sports-journalization of US media – March 25, 2020
Tough times need vanguard parties – are ‘social media users’ the West’s? – March 26, 2020
If Germany rejects Corona bonds they must quit the Eurozone – March 30, 2020
Landlord class: Waive or donate rent-profits now or fear the Cultural Revolution – March 31, 2020
Corona repeating 9/11 & Y2K hysterias? Both saw huge economic overreactions – April 1, 2020
(A Soviet?) Superman: Red Son – the new socialist film to watch on lockdown – April 2, 2020
Corona rewrites capitalist bust-chronology & proves: It’s the nation-state, stupid – April 3, 2020
Condensing the data leaves no doubt: Fear corona-economy more than the virus – April 5, 2020
‘We’re Going Wrong’: The West’s middling, middle-class corona response – April 10, 2020
Why does the UK have an ‘army’ of volunteers but the US has a shortage? – April 12, 2020
No buybacks allowed or dared? Then wave goodbye to Western stock market gains – April 13, 2020
Pity the lives of post-corona Millennials… if they don’t openly push socialism – April 14, 2020
Ramin Mazaheri is the chief correspondent in Paris for Press TV and has lived in France since 2009. He has been a daily newspaper reporter in the US, and has reported from Iran, Cuba, Egypt, Tunisia, South Korea and elsewhere. He is the author of the books ‘I’ll Ruin Everything You Are: Ending Western Propaganda on Red China’ and the upcoming ‘Socialism’s Ignored Success: Iranian Islamic Socialism’.
If America’s Dollar Dictatorship (as former Iranian President Mahmoud Ahmadinejad called it) will only strengthen, how do you explain Vladimir Putin’s comment in Nov. 2019 that “US Dollar Will Collapse Soon.”
US Dollar Will Collapse Soon
http://www.informationclearinghouse.info/52560.htm
Do you know something that Putin does not?
Also, the recent Russian-OPEC+ kerfluffle was about ending American PetroDollar imperialism and not just deciding the price of oil:
Russia’s Exit from OPEC+: How Moscow Is Killing the Petrodollar
https://www.stalkerzone.org/russias-exit-from-opec-how-moscow-is-killing-the-petrodollar/
Putin is merely advertising for a much-needed development.
If he sincerely thinks the US dollar will collapse soon, then I do know something he does not.
And that is because I use a socialist class analysis for the machinations of international high finance, and not a merely nationalist lens.
Thank-you, Ramin, for the explanation.
I have been wondering for a while now, how the USD keeps staying strong.
Hope you are keeping well/sane in these crazy times!
I see, the dollar is invulnerable and a safe haven in a time of turbulence. The best place to put your money, therefore is into US Bonds. Well doing the calculations US 10 Year Treasuries at the present time are producing a yield of 0.6%, the US rate of inflation is 1.5%. This means a negative -0.9% yield. No thanks I think I’d rather put some of my money in gold. The present dollar price of gold is $1713.08. Apart from the usual ups and downs this has been an appreciation of the metal from a low of US$14.00 in 1972. You might also consider the fact that Central Banks around the world have being buying and hoarding gold as a hedge against dollar movements and as a ongoing process of de-dollarisation. We are living in very strange times when investors put their cash into assets which yield negative returns. The fiat–dollar bugs seem to imagine that the dollar is in mafia terms, a ‘made’ currency, indestructable and a permanent prop in the Anglo-Zionist empire. It isn’t. Nothing in the world is permanent. What was it that Voltaire said about currencies, ‘Fiat currency always eventually returns to its intrinsic value–zero. Tell me I’m wrong.
If I had money I’d put it in gold, too – it is a better investment for profit. But investment for maximum profit and investment for stability are two different things.
For years investors have bought bonds at outright negative rates – paying for the privilege to hold a bond – because they see it as less risky than other investments. Risk is maximised in a crisis like today or in 2008, thus the dollar demand. In any era investors aren’t going to invest in just anything simply because they have the money to do so. Also, banks often charge big fees to hold huge amounts of money, so negative-interest rate bonds can cost them less than those fees. And the bond itself could rise in value, thus offsetting the negative interest rate.
I did mention that central banks have been buying more gold, but also that gold reserves surpassed treasury reserves only recently. It’s a trend, but to act like the dollar isn’t essentially treated like gold globally – still – is simply an enormous exaggeration of that trend.
Ramin
do you know what’s the cheapest way to buy real gold (a few ounces only)?
Thanks
Its doubtful that western central banks have been buying(or holding) any gold that can be tested or audited. They have plenty of gold covered tungstun that used to manipulate the paper mkts, but that is it.
I think the bigger problem is if enough citizens get “fed up” with the lack of income, they just might band together and put a hurting on the enforcement division of gvt, once you strain the ability of the gvt to control its citizens and then wack a hornets nest, then the congress might come to its senses or moore likely lose its mind in a vain attempt to find a solution to that problem.
There really are no solutions to the misery the human race is about to experience soon if this virus isnt curbed in short order, once the conveniences are eliminated, so is the patience of most people who once desperate, will do anything to exact consequences of extended gvt corruption.
I hope that’s possible but somehow find it hard to imagine
I watched an interesting interview yesterday with Greenwald and an English psychiatrist (I think) – his Ted Talk show was one of the most watched: this is his book
https://www.amazon.com/Lost-Connections-Uncovering-Depression-Unexpected/dp/163286830X/ref=tmm_hrd_swatch_0?_encoding=UTF8&qid=1586983804&sr=8-1&fbclid=IwAR3jc_Db7ERkLX8JViZcUaD46mMY2K0N0-tKvWrdJK1g1Xk_-QiAe5B8o38
he basically said that research has shown that most Americans (surveyed) when asked how many friends they have that they could turn to in need – give NONE as their reply. Decades ago it used to be around 5.
Also I thin 40% of Americans surveyed agree with the statement: Nobody knows me well.
With such population where most people have no meaningful friendships, who feel so isolated, no meaningful aggregation is possible I am afraid.
I hope I am wrong but my personal experience of living all across the Modern Day MORDOR that is USSA matches the study described above.
I have seen very little mercy and good faith in American people towards anyone
I can imagine that to be true among younger people, who have turned into cyber-hermits, not just in America, but every other place I’ve been to recently. Among my oldest relatives, 80s and over, the five trusted friends rule seems to exist still in America and Canada. Younger than that, I cannot say, not being in America. 60s and older stay in touch mostly by e-mail, and value family relationships. There are several I feel I could turn to, depending on how intrusive I meant by that, but I have one unusually cohesive branch of my extended family, of which I am quite proud. The other three branches of second cousins turned inward decades ago and are mutually hostile. The divide, where people started shutting themselves away from society in Japan is roughly in their 40s, and from what I observed in Indonesia, in their 20s, after their parents skimped on nutrition to make sure they all had smartphones.
Dollar will rule and rule for long, long time.
But not for 20 or 30 years, more likely longer than 50 years
Mr. Ramin Mazaheri is right.
Only way to any country to protect itself is probably to have low debt, and huge gold and money reserves.
And to be self sufficient in food and energy and to have very strong Army, Navy and Air force to be able to defend itself.
To end dollar global dominance … almost impossible. Only by some revolution in USA and West that will not happen ever.
Or by some global war which USA and NATO would lose.
Otherwise NO – unfortunately.
”Only way to any country to protect itself is probably to have low debt, and huge gold and money reserves.
And to be self sufficient in food and energy and to have very strong Army, Navy and Air force to be able to defend itself.”
Well that pretty much describes Russia and China whose development would seem to be unstoppable. Per contra, the US decline also seems unstoppable. Look at where it was in 1945, and look where it is now. The US is sustained not by any magic of the dollar, but by the fact that its vassal states in Europe and the middle east are required to recycle their surplus dollars back into the US by purchasing US Treasuries which will never be paid. In short the rest of the world is subsidising the US. And it can only do this because its vassals continual to treat the dollar as having a real value and letting the US get away with this ‘exorbitant privilege’. The dollar is not a special currency it is not backed by anything – other than aircraft carriers. But these are somewhat vulnerable.
Then of course there is the Triffin Dilemma which means that sooner or later the world will stop using the dollar as a means of payment and that some other international currency will take its place.
You still have to be able to export enough to compete globally, and yes russia is doing this starting with oil, a big one, now if they were to be able to increase the size of their food exports, and convince country’s to abandon the sanctions trade issue, the table could be set for an exchange rates war that would take the percentages and reverse that momentum in a hurry, its the only way.
China being the second largest holder of US debt (Treasuries) with more than a trillon US$ makes you want to re-think the assertion that it’s only vassal states that have been subsidizing the US free ride for so long.
The big kicker that your missing is that China is a U$ vassal state, albeit an unofficial one that hides behind their phony “Socialism with Chinese characteristics” (No serious Marxist-Leninist would describe a country with Stock Exchanges, Sweatshops, and Billionaires, as Socialist, LOL) and engages in a fake wrestling routine with the U$ (i.e. building useless air bases on corral reefs, and occasionally threatening to invade Taiwan, while the CCP allows Taiwan-based Foxcomm to run horrid Sweatshop/Slave Factories in China, LOL), while continuing to function as a Sweatshop for Wall Street/Silicon Valley, and following the dictates of the U$-led World Order/Government (supporting UN Security Council sanctions against the Socialist DPRK, and cutting of mos of its Oil Exports from Iran).
Agree with Ramin, very good article! BTW (as usual). I think for the dollar to stop being the main reserve currency, this could only happen after a major military defeat of the US like for instance against China or Russia, but then if this ever happens maybe none of us will be left either.
Very good article, Ramin ! I really appreciated your logic of putting together the reasons, causes and effect regarding the overall political and economical realities of this world we live in. I also think that the 2008 crisis has been an eye opener for those who were still reluctant to that collaboration you mention so well in your article.
With regard to socialism, well, that is a term which makes many to shake their heads, moreover today than in the past. What we are witnessing today with this “thing” going on in hyperactive way, the nationalist approach seems to be the only solution out of the crisis for many. Interesting to hear politicians pedaling on this while accepting the same cooperation in money printing like their 1% masters are doing, hence proving their servitude to the overall capitalistic system. Thank you !
Ramin, you only scratch the surface here.
The current system is set up to benefit a few rich, that can be proved by looking at income distribution.
How long the system is going to last is a different matter.
How do you know that the west has enough gold to continue another decade?
Few years back Germany wanted its gold back that was stored in the US. You would think that organizing a transport would be a matter of weeks at most.
It took way longer and different bars were delivered.
Ronan Manly looked at general numbers and stated that end of 2019 London has 8326 t stored. Foreign central banks own some 5373 t of that, the ETF’s own 1895 tons.
That leaves a “float” of maximum 1057 tons.
This could be owned by someone who does not want to sell or be available for sale.
Comex in USA has 287 tons in storage, the most part of it is owned by someone and not necessry for sale.
In April 68 tons are supposed to be delivered at the COMEX.
Market price for a ton of gold is now 55 million $ per ton. For regular people out of reach but if trillions of dollars are created in weeks
someone may take some of it and mop up the available gold.
In a way China did that quietly during the last two decades or so.
Speaking about China, there is an unusual price differnce between price quoted in Shanghai and London for the last few weeks.
Shanghai has fairly consistently lower prices since the corona-shutdown.
This is quite unusual and could be interpreted as a short squeeze in the western market.
On the kitco.com website you can find the data, just convert to same units.
Until now all predictions that the world will end and that gold will explode in price did not come true so just wait and see.
The numbers indicate that in times of panic gold could be the achilles heel of the dollar.
Yes and some of that “German” Gold which now sits in the USA has Greek assay marks on it – since Germany invaded Greece and took all its gold during WW2… had Greece been able to keep its own gold, it would not have had the crisis of recent years…
I just figured out where the 4 trillion or so bailout dollars are coming from as I looked at me 401K. (No need to make the money out of pure vapor, and thus bring on an inflation.) Yep, the returns went flat. Afterall the Fed’ cut the interest rates. Thus all interest bearing accounts around the world are suddenly paying less; some funds are even going negative. So, less money to all them retired people, as well as those planning to retire one day. More money to shove into the stock market, where the sharks in turn bleed the money out as the market is going down. I must admit; pretty slick.
They are trying to get us to voluntarily loot our own pension funds here in Australia to cover the costs of our government forcing us to stop working. Meanwhile the big 4 banks get billions of money that we the tax payers have to pick up.
This is exactly what my thoughts are about dollar and it’s dominance. In 2008, when “economy” crashed I thought that everyone will rush for gold which to my surprise did not happen. Contrary to my belief, everyone run for dollars. This puzzled me for a long time, until I realized that filthy rich all over the world are the ones who prop the dollar value. Imagine person who has a lots of apples. Of course he will do anything to prop the value of apples and keep it that way. Simple as that. Gold is heavy, hard to transport and cannot be easily hidden in case you have to split a second …
Tough to hear but Ramin may be correct. But really, who, especially China and Russia, wants it to fall fast. A slow degradation is probably better for stability. Besides which country wants the poll position. Better to race along in the leaders draft.
Unfortunately, I have this gnawing, nagging feeling that change will be in sudden, destructive black swans. There were many problems when Imperial Rome fell. Two thousand families owned most of the land, neo- fuedalism anyone?
Can we skip the neo- fuedalism and go right to socialism, doubtful.
As I understand it, American Dollar Hegemony is not actually based on the “solid fundamentals” (ha) of the United States economy.
If that were true, the Americans would have lost their jealously guarded Dollar Hegemony, as the US economy and financial system are a massive ponzi scheme. Indeed, the Federal Reserve has been desperately pumping money into the US financial system to delay its implosion–particularly since Sept. 2019 in the repo market.
No, American Dollar Hegemony is ultimately based on the American Empire and its war machine and the perception–though not necessarily the reality–that they are invincible.
Greed with Carolingian(Romano-Germanic) characteristics?
From what I’m seeing on the purchasing side of trade is that China, or really any producing country, really doesnt need to trade in anything except dollars or the euro, if doing business in Europe. They only need their personal currency to trade locally in country.
On the purchasing side I’m noticing a 20% increase in prices for manufactured goods, once a product sells out at the old price, if you want one today verses yesterday, prepare to pay a 20% increase in price.
And perhaps either Putin or maybe the translator did not add enough words to the so called death of the dollar, he might have or should have said the death of the dollar in American hands. What a shame it would be to have a world a wash in dollars and at the same time have so few Americans holding dollars, all a producing country has to do is raise its dollar price and in an instant, fewer dollars in American hands for the same goods they could have purchased before the onset of the virus.
Many of the things I stated in the past like if everyone came down with a disease that needed expensive treatment, the country would not be better off had it been able to spend that money in a more productive manner, say things that reduced the cost of living. And now we are looking at a second round of price inflation that if had not occurred, the extra money could have been used or spent in a more efficient manner.
Soon we (and even the gods) will not have much to show for our trillions of dollars of debt we have accumulated over the past few years, or precious time of wasted effort. And naturally in the future we will wonder just where did it all go wrong, well, a slow death by a thousand cuts, for the mostly useless work having need be done in the front end of the curve, one doesn’t get back at the end of the curve when it will be needed most.
So don’t get mad at the space gods or let your soul confuse you, they know this wasted precious time and effort not toward their benefit, is lost and gone forever.
resistance is futile….the dollar is invincible….the FED is invincible….the US military is invincible…the Petrodollar is invincible….the 1% are invincible….sheer freaking hubris….oh yeah and trotsky too
Synonyms for invincible indestructible bulletproof impassable impregnable indomitable invulnerable irresistible unassailable unbeatable untouchable insuperable inviolable unattackable unconquerable undefeatable unsurmountable
The dollar supremacy was the outcome of WWII ,so I think it would take an event of a similar magnitude to stumble it down.Not likely to happen….for now.I always tought the needed change should arise within the US itself ,but then again I realize how helpless US citizens are .Maybe a comet falling to the right spot would help .
Maybe with all those dollars they’ll buy another planet.
We’re gonna need one VERY soon.
I can’t understand why any nation would keep the $ as a reserve currency. It is a military weapon against nations and individuals who will not fall into line with the empire. Maybe with the reduction in oil demand the $ will not be needed and will finally be dethroned. Also with as much money the empire is spending on the corona virus it seems the PTB know its over and are purposely spending it into oblivion.
As long as the EU backs the US dollar (i.e. banking system) and as long as ME oil exporting countries are “tied” to nothing will change. Change comes only if this sort of banking system falls as it feeds USA’s Ponzi scheme.
It too has to do with “belief in the invincible USA empire”.
If USA is more and more beaten – militarily, science, commerce – than as any empire it is prone to downfall. History tells us.
The Chinese and Russians are playing for time, producing and accumulating productive capacity, infrastructure and investing in their people’s labor capacity to produce . . . wealth.
War is an utterly wasteful enterprise that it is best avoided. This frustrates those of us who have watched and been mentally entrained by too many Hollywood depictions of conflict and what seems to us to be the natural violent righteous triumph of the good guys. It seems boring to watch the build up of productive capacity bridge by bridge, high speed rail by high speed rail, but to states that have endured wars within their own territories in recent living memory nothing is worse than war than slavery. And warding off slavery requires a communal effort to build the community’s wealth. The US conducts looting expeditions because it is not organized to produce wealth or communal health. Its war model and the inability of the dominant neocons to do anything else but to double down on their failures will eventually bring the financialized west down. The neocons do not have a reverse gear.
Both Russia and China are accumulating gold. Not because they intend to back their currencies with it, but because certifiable and trustworthy stores of physical gold can play a role as security for trade. Think gold-trade certificates. That calls for trading systems backed by satellite networks and the ability to defend these assets and the homeland. We don’t buy fire insurance each year and then bemoan the fact that we didn’t collect on it. Gold is a type of insurance, but it is not a store of . . . wealth.
The author describes correctly why the $US rises in value: holders of capital seek safe harbors and the US, in spite of its hegemonic depredations, still enjoys their confidence. Seems counterintuitive, eh?! Yes, it’s a confidence game. Today the US markets are capable of efficiently handling foreign exchange, repos (a form of overnight lending) and the movement of liquidity in the trillions daily. Daily. No other market can perform that function today and likely for years to come. Today the US enjoys the confidence of big capital.
We may well be experiencing 9/11 2.0 with this novel version of a virus known to exist for 50+ years at least. Various national labs have been fiddling with it for years. Each year death refuses yet another holiday to reap hundreds of thousands of so-called flu deaths worldwide, not to mention the deaths daily of thousands of children from bad water, hundreds of thousands of people annually in the US alone from treatment by allopaths and infections in health facilities, to name a few ordinary occurrences.
This year the rascals seem to have devised a way to panic citizens over circumstances that occur one way or another every year, but to which our minds are not directed. Now the stage appears to be set for a display in daylight of what it means to lose both financial freedom and civil liberties while the financial cabal runs the table in amounts that make 2008 look merely like a trailer for the main feature in the 2020s.
I suggest we need to entertain personal paradigms that foster much more than what benefits us as mere bioforms. We can outlast the rascals and settle on actions in response by entertaining perspectives about such topics as the $US and its seemingly baffling continued desirability that the author addressed so well. The world continually produces paradox and irony, including the counterintuitive notion that the $US will reign supreme for yet another season.
Right on Ramin! Now, I hope we can all go up to a higher vantage point and see the even bigger picture…
http://nietzsche.holtof.com/reader/friedrich-nietzsche/daybreak/aphorism-206-quote_c431e9fbb.html
The dominant culture (capitalist or socialist biased variant, dollar-denominated or not) of continuing economic growth, N’s “wanting above all to produce as much as possible and to become as rich as possible” still has a bit longer to go before undeniable earth resource and sink scarcities force it to go into degrowth/steady-state mode, and force us all to re-assess our values. Whatever evolves out of this process, it may be a bit more “socialistic” (egalitarian) or just as easily a bit more “capitalistic” (fascist). There is even the possibility that renewable tech transitions will be achieved in time for the scarcities to be assuaged, maybe even altogether averted, and for all of us to be converted into the industrious, highly domesticated ants needed to keep the technoplex operating. Too complex to predict all of this, but it sure does seem correct to argue that the death of the dollar, as Twain would say, is being greatly exaggerated. The death of the dollar at this point would also mean that the whole system has collapsed…not there yet…just a little corona virus and another depression maybe.
I think what we have here is a type of monetary mysticism. Ah the magic green paper which will outlast every empire and civilization since God put it there and where it will remain in perpetuity. Do we have to keep going back to the Labour theory of value?
Whisper it quietly but in fact the only real money is gold which is going up in price. This is in spite of massive manipulation in the Comex futures market to keep the price of gold down. The US has a reputed to have 8,000 tonnes and the EU some 10,000 tonnes, Russian and Chinese are not made public – you might also add that Russia has sold off its US Treasuries and China has stopped buying them also.
When the central banks prints money and gives it to CEOs who then buy stocks markets are said to be booming and everyone is said to be richer. In point of fact what is happening isn’t growth it is asset price inflation in both stocks and property. Come the correction and all those ersatz values come tumbling down. There was not increase in wealth, it went as soon as it came. Investors began to wonder what had happened to their new found ‘wealth and riches’ – well it was never there in the first place. It was what Marx termed ‘fictitious capital’ a temporary increase in paper value not real productive value.
Any defined medium can act as money, provided believe it to be so. Cowrie shells, feathers, provided people believe them to be money. But when confidence goes and when the velocity of circulation reaches zero which it does in depressions, you can print as much money as you like but the depression will last as long as the mass devaluation on the currency reaches its nadir.
The only thing that keeps the dollar afloat is the propensity for US vassals in Europe and East Asia to buy US Treasuries under duress which will never be paid. More fool them.
‘’The US economy lives like a parasite off its ‘partners’ in the global system, with virtually no savings of its own. The wealth produces while the US consumes. The advantage of the US is that of a predator whose deficit is covered by what others agree or are forced to contribute. Washington uses various means to make up for its deficiencies: for example by repeated violations of the principles of liberalism, arms exports and the hunting down of super-profits (which involves the periodic felling of producers: one of the real motives behind the wars in Central Asia or Iraq). But the fact is that the bulk of the American deficit is covered by capital inputs from Europe and Japan – US occupied and controlled zones – China and the oil producing countries and comprador classes from all regions, including the poorest in the Third World – to which should be added the debt service levy that is imposed on every country in the periphery of the global system. The American super-power depends day to day on which sustains this parasitism of its economy and society. The vulnerability of the US therefore represents a serious danger for Washington’s project.’’ (Beyond US Hegemony – Samir Amin)
There you have it. America is not the super-power it once was. It is an economy based upon consumption not production. The bloated financial and service sector is visibly dragging it down. It will meet the fate of empires, imperial overstretch and imperial hubris.
“Some Western commentators often act as if China doesn’t know what they are doing by being the second-biggest holder of US Treasuries – as if Beijing is somehow being suckered or something?”
China and Russia seem to have the idea that the World economy is better off by not crashing the US economy. Possibly true,but I don’t think so.I believe the longer they wait and the more connected they become.The worse the World economic collapse will be when the US economy does tank.That a clean brake needs to be made while the US won’t collapse all at once.That Russia and most especially China needs to dump all,yes all,their US dollar holdings.And to halt all,yes all,trade using US dollars unless the trade is with the US itself.For Russia that means,no oil and gas sold using US dollars.And no other raw material sold using US dollars.And no non-US imports using the US dollar as payment.For China that means all their imports of oil and gas,as well as any other raw material will not be paid for using US dollars.And their global exports can not be paid for using US dollars.Unless the trade is with the US itself,no more use of US dollars.That would be a moral wound to the US dollar.Not an immediate collapse. But a mortal wound nonetheless.Russia and China are massive players in the energy market.Once Russia’s customers see that they can’t use dollars to pay for energy,they won’t be tied as much to the US dollar.And once the Middle Eastern states ,Europe ,Africa,Latin America,and other Asian states see that the massive Chinese resource buying,as well as the massive trade in Chinese made goods can no longer be in US dollars.They will have little need to have US dollars.It would be a sea change move.
Those actions need to be taken quickly.Before the US plan is completed to loot China.Living in the US I can see what is being planned.They intent to seize Chinese investments in the US.To use their claims that China is responsible for the pandemic as the excuse to do that,and to cancel their debts to China.They also are going to allow lawsuits in US courts,as a way of seizing Chinese assets worldwide.And get other Western States to join in the looting.The gloves need to come fully off before that happens and China needs to inform their “pardners” that attempting that will see retaliation against foreign investments in China and cut off of trade with those countries.The time of speaking softly is coming to an end.It’s now time to use the stick.Before the US and their stooges use that stick.
That’s a tall order, it would essentially shut down trade with china and Trump already said he was dependant on china to make so many of the health care industry’s products to fend off another possible virus attack. Along with repeted statements that he has a good relationship with xi jinping. I dont believe they would be foolish enough to try that any time soon. Too many people looking on and critizing during an election year that he pretty much has wrapped in the bag, why risk that.
No,its being tied to the US dollar that will shut down trade with China.Which is the bottom line US plans.As I stated in the second part of my post.The EU and other parts of the world would be free to use the Euro,Pound,Yen,and Yuan instead of the US dollar to conduct trade with China.And in some cases they would be able to arrange payment in local currency,as China and Russia have agreements with some countries already for that purpose.The world is tied to the US dollar because many countries locked themselves in to it .Forced by the oil and gas trade being controlled by the US dollar.Once one of the ultimate largest energy producers in the world drops the US dollar.And “the” largest by far energy importer refuses to use the US dollar.Those other countries will no longer be forced to be tied to the US dollar.And most of it’s use would be confined to the US and for imports and exports to and from the US itself.Which is how it used to be,and should be again.
Well i’m starting to see it, but wouldnt you have to have the saudis blessings? Doesnt seem like russia (or any dollar backed country) and the prince are teaming up to fork over the U.S. with exchange relations currency. I think the prince holds some cards at this table game too.
The Saudis best oil customer is China.Now close to 20% of their oil exports go to China.And with the oil export market in a recession.The last thing the Saudis want right now is to lose their best customer.All they would have to do to keep it is ditch the US dollar in trade with China.I think the Saudis would make the correct choice.
We’ll still have to wait and see about that, I still believe the end result is higher prices rather than a trade war.
@uncleBob
The Chinese have no difficulty in buying crude oil from Saudi Arabia using USD since they own approximately $2.3 trillion in foreign exchange reserves. It is in fact one of the only ways that they can spend of them, since otherwise they can only be spent back into the US economy, since USD are not legal tender anywhere else.
Rich Chinese people are buying real estate in the US, particularly New York and California as both an investment and putting their excess dollars to good use. How do I know this ? My son and young niece work in the high tech and medical fields respectively, and they tell me that they both have young Chinese colleagues, who are able to buy multi million dollar homes in the US immediately upon graduation from university.
Couldn’t we say that ultimately this whole system is based on the mentality of certain men? A mentality that is obsessed with avoiding the inevitable(death) and therefore not loosing the temporary pleasure that material possessions bring(avarice)? I suppose this only comes about once you get rid of spirituality and self control. But even spirituality can be contaminated with avarice. There are two types of men: those that obey the will of the Universal Mind(Janus Jupiter) and those that believe that they are the Universal Mind.
Neel Kashkari? This is the guy who worked for the Treasury in 2008 and was grilled by Dennis Kucinich who said he wasn’t questioning that they were working hard. He wanted to know who he was working for? And he wanted to know, from Bernanke where the money went. Bernanke wouldn’t tell him. This banking system is a criminal cartel.
Ramin gives the view that if you don’t understand what is happening in a socialist struggle context, then you have to resort to conspiracy theories about secret societies, secret handshakes, ritual murder, etc.
All I can respond to that is such entities are real though not so secret anymore. More of an open secret. The Cecil Rhodes roundtable group which placed people in key positions in the British government (initially) steered the government’s position for WW1. They didn’t make a public announcement ‘we belong to a secret group and are here to make sure our objectives occur’. It was secret. This roundtable group later morphed into the CFR, The Royal Institute for International Affairs (Chatham House), Institute of Pacific Relations, Canadian Institute of International Affairs and on and on it goes. They have created a virtual giant spider web over most of the planet.
So no, the Petrodollar is not threatened. No, the International banking system with its key hub, the Federal Reserve System is not going to go bankrupt.
I believe the only way to remove this is by Divine intervention. I would suggest holding onto things of this world very loosely.
But these “entities” have never been secret – they are based around banks. Thus “bankocracy”.
Banks and their biggest clients, like hedge funds and major capitalist barons.
There’s nothing secret about it. Talking about freemasons or Bilderberg or Skull and Bones is a total waste of time because it’s not as if you can GET INTO these groups without being either a banker, a baron or their sons. If you are a poor Freemason it’s not like you have any power at all within freemasonry – that’s a total LOL.
No secret at all to the West’s vanguard party – it’s a bankocracy.
Well put Ramin……I enjoy reading your articles. kheli mamnoon….mercy.
MIchael Hudson explains how America’s parasitic system of US Dollar Imperialism operates. As he puts it,
“This Treasury-bond standard of international finance has enabled the United States to obtain the largest free lunch ever achieved in history. America has turned the international financial system upside down. Whereas formerly it rested on gold, central bank reserves are now held in the form of U.S. Government IOUs that can be run up without limit. In effect, America has been buying up Europe, Asia and other regions with paper credit – U.S. Treasury IOUs that it has informed the world it has little intention of ever paying off.
And there is little Europe or Asia can do about it, except to abandon the dollar and create their own financial system.”
Super Imperialism
The Economic Strategy of American Empire
https://michael-hudson.com/wp-content/uploads/2010/03/superimperialism.pdf
De-Dollarizing the American Financial Empire
https://michael-hudson.com/2019/07/de-dollarizing-the-american-financial-empire/
Super-Imperialism at the Pentagon
https://michael-hudson.com/2019/02/super-imperialism-at-the-pentagon/
America: Host Or Parasite? – Michael Hudson, #121
https://soundcloud.com/guns-and-butter-1/2051-20070314-guns-and-butter
“In effect, America has been buying up Europe, Asia and other regions with paper credit….”
This is why I have always tried to stress that QE is so bad for the Developing World – it’s never broached in the West. Of course Hudson is a primary illuminator here.
Neoliberaism is also neo-imperialism.
That’s what I should have added above.
Westerners only seem to focus on how bad neoliberalism has been for their people, but they rarely seem to make that connection; they also don’t see how neo-imperialism must be expanded to mean the colonisation of your own populace and not just the colonisation of foreigners – the Eurozone’s colonisation of Greece is an example of this.
But this requires a full article, and many mentions of this principle in many articles.
Interesting article Ramin, thank you for sharing. I’m interested to hear what your thoughts are on BTC and its potential to establish a new monetary system.
I agree and disagree at the same time (smile). Yes, the Dollar will get stronger vs other fiat currencies. On the other hand, by definition, it has to weaken against gold, the only real money (actually wealth) the world has ever known.
I do not know if mr. Mazaheri knows that there are four types of currency on this globe? Ofcourse the reserve currency gets its value because of the oil and other commodities are traded in it alone. Then there are currencies based on the price (note, not value) of the reserve currency. Then there are currencies based on a free floating price of gold. To reach their full potential paper gold needs to be killed. Ofcourse there is a last case of currencies. The basket case currencies basically. Sadly from the worst run countries. I truely feel pitty for the people living there.
Russia for example transitioned from being a currency deriving its value from the Dollar to now from their gold reserves (and yes, I know this is simplyfying things). The Euro already did so. China is in the process to do so and so on.
The Dollar getting stronger vs other currencies in the short run is a given. BUT in the medium term it can be destroyed via hyperinflation. All the ingredients for it are in place. The trigger is just not (yet) pulled. There are so many trillions of Dollars held in foreign hands it boggles the mind. The only reason they hold on to them is they offer a great return so far (vs their own currencies). Once the financial world decides it is better to get real stuff, like gold, all bets are off.
The paper gold market is showing great stress. If it breaks down vs stock and bond markets, game on end game Dollar wise. The hyperinflation will start with the dollar and all currencies based on it. The gold backed (on a floating price) currencies are structured to deal with it so less issues there. Ofcourse they also will have huge issues but managable compaired to hyperinflation.
Mr Mazaheri makes a strange comment in this article though. He says he would buy gold if he could afford it. A gram of gold costs around $50. Not that expensive I think. If I may speculate a bit. I think he knows socialist policies NEED inflation and robbing prudent people who save in currency via inflation aka money printing and hand it to corporations, the power structure and maybe a few crumbs to normal people. A vote is a vote after all who cares about morality after all, it is about power (smile).
To be clear, I do think a civilised society does help the weakest in their society. An example from my personal life. My step sister has a mental handicap. She has a job she loves, basically packing stuff, like Christmas gifts. Totally not profitable but fine with me, she does what she can and I am happy to chip in for people like that. You know what, the costs of her having that job because of all the socialist burocazy here cost most. Way more then her wage.
If I understand cultural differences well, the Iranian people know way better how their government screws them via their currency. Thus they dont save in it and buy gold (and dollars to a lesser degree). Ofcourse the US sanctions make it criminally worse now but this isnt the first regime that tries this in their 1000s of years of collective memory / history. The lessons have been learned in most of the east as well.
One thing is for sure, Germany learned the lesson later via their hyperinflation. Currency is for spending, gold is for saving. Solving the Triffin dilemma and also the issue of creating conflict, one mans debts are another mans savings. Currency cannot do both functions and remain stable. If you are a conspiracy theorist you can think it was delibirate design wise. I hate to be one but Keynes (big part of designing this system) openly replied on many occasions when confronted with the question ”but in the long run it will end in distaster” with ”in the long run we will be dead”. THe now living are dealing with it.
What I am curious about is detailed description of the Iranian economy. As far as I understand it (and yes, probably by propaganda influences) is that most or the normal Iranian people get basically pennies from their natural resources and the Iranian elites are plundering it. Just as in all centralised systems. After all, power corrupts and absolute power corrupts absolutely. See the USA or EU (smile or is it cry).
No matter where you are, if you want to counter the elites. Make sure your savings are not stealable, do save in physical gold. No not in silver or whatever usable stuff, that is pure evil, even worse then what is being done now. You dont want silver since used in medical equipment because great anit bacterial. I would hate saving in something that will potentially make that less available and thus kill. That is just one example.
The only difference I seem to have with mr Mazaheri is that he thinks the state or even global socialism will be the cure. I think it will even be worse then this mess. Power corrupts and absolute power corrupts absolutely. At least Russia openly admits their oligargs are a problem. When will the rest of the world follow suit and admit their oligargars are as well? After all, only then we can hunt down the globalists.
To conclude. I am me. This is my life. This is my body. My mind is mine. The fruits of my work are sadly not mine, I want that to be mine as well. I want to be able to choose who I support with my labor and not some dictator or socialist or whatever deciding it for me. I know I know better then them. Of course not perfect.
To be clear, this system we live in now IS socialism at its finest. Oh you dont think not? Then you dont understand socialism. Study the systems in eastern Europe and the USSR. Then you get it.
To nuance it a bit, humans are socialists when free will is in place. My mom has a tiny pension. Ofcourse I pay all for her since she cannot afford anything big fun wise. Just as some friends and related family. But to be brutally honest. I do not care about Italians. Sadly our government is letting our small businesses fail to support the corporations of the south even though their behavior was horrible. This after we had a decade of austerity and they didnt. To make their problem mine is beyond crazy. Robbing the ants and rewarding the grasshopper.
As a joke here goes (non viral). We should become socialists. Government should be borrowing instantly to Italy levels, give it all to the population! Since our government then is also broke means we get free money on top of that! We really should do so I think.
Really think that kind of behavior will get you a good society and morals? I see no other options then totally corrupt society. Let it crash and burn Ayan Rand style instead. If not, hell, Ill go irrisponsible, spend way more then I earn, have a blast and fuck society as so many do and thus help to trigger socialist paradise. Oh wait, then there are no suckers like me to pay for it.
The system wont save you. You given your power to the elites and they intend to destoy you. As Buffet said years ago, it is a class war and we are winning. History rhymes……
If you made it this far, thank you for reading. Do take your power in your own hands, you have the power. The elites only have the power you give them.
Regards,
Hugo
But gold can be easily confiscated and has been in the recent past. This one of the reasons why I find BTC fascinating.
A gun to the head of your little daughter, your laptop in front of you on the table. “Log in” says the woman with the gun. You log in to your Bitcoin account. The woman’s helper shoves an official government document in front of you showing some legal text and the IRS’s BTC number clearly visible. “Send all your Bitcoins to the IRS” she commands. Burning with anger but unable to do anything you comply.
“Thank you” the woman says, “it was nice doing business with you, but next time you try to conceal currency or any other matters of value from your government you wont get away with it as easily as this time”. “Have a good day”.
—
Everything you (think to) own can be confiscated. BTC might well be even worse than other savings. You depend on an internet connection and use of a computer. You depend on the cooperation of a bank if you want to convert BTC to currency. The network (www) needs to be functional, but can be shut down with the recently tested kill switch. The network needs electricity to function. The BTC system can be hacked, it has been done before. There is a slight possibility/risk that it has built in backdoors, or worse, that it is a big bankers operation from the very beginning, and one day they might well say: “Rien ne va plus, you BTCs are no longers yours, sorry”.
Motto: Don’t worry, be happy!
I’m not sure if I understand the dramatic criminal story with the gun to demonstrate that BTC is just as confiscatable as gold. The point is that one day BTC will not need to be converted to other currencies as it would be the ultimate store of value. I believe that you’re referring to the hacking of crypto exchanges, not actual wallets owned by sovereign individuals.
You are correct, concentration of wealth=concentration of power. Urbanizaization/civilization is either partially or fully a result of land being concentrated in fewer hands. But why does this land monopolization occur? Obviously avarice. But why does avarice exist and what is it? Avarice in my opinion is just attachment, excessive attachment to luxury, the idea of permanent comfort and most importantly fear of death. It is against the discipline, self-control and “death-acceptance” that reality requires of all of us. But Western elites are incredibly arrogant. The only solution in the greater west(Americas and Western Europe) is a revolution/internal war more terrible than all other previous ones. A French revolution, a Mexican revolution and Spanish revolution just on a greater scale. Call it a communist revolution but without the ideas of Marx. This will be a different communism, purified of hellenism and combined with the ancient pre-hellenic and by consequence pre-judeo-christian theology of our Western indo-european ancestors, the vulgus/populus will conquer the Western oligarchy.
Hello Comunero,
Thank you for your insightful reply. A short reply. I dont think the elistes are Western bound only, Sure. mor powerfull but but there are elites everywhere, Russia has them, China has them, Brazil has them and so on. As I see it they are all colluding to make the world better for them. Not us.
I suirely would advise against revolution since they have the habbit to bring in the worst. Let us look at the French revolution. It started with a truely bad system. As a result the queens head gotten chopped off. Instead of getting better from then on, a power hungry tyrant took over. Robberts Pierre he was called., Instead of making life better for the people he decided to go for what is now known as the reign of terror. After killing many french people to keep his power he was finally disposed of. Only to get Napeleon in its return. Only after the defeat at Moscow and the disposing of Napoleon they gotten back a normal country.
Be carefull what you wish for in short!
Regards,
Hugo
I think the dollar will tank when a couple of American aircraft carriers sit on the bottom of the ocean. That can happen really easy now. That will make America in the eyes of other nations very weak. I remember a few years ago a Chineese sub surfaced not far from a carrier undetected. Technology has advance greatly and probably air craft carriers are out of date if the truth was known.
Excellent article Ramin! I read your missives every day.
You never get the kind of commentaries and articles you get here.
Another great article. I haven’t heard any commentators I respect calling an end of dollar dominance any time soon. I do think it’s dominance will end a lot sooner than the average person might think. Everything is speeding up these days.
I also like the fact that we as individuals now have a market for currency. Although I might be paid in worthless fiat, I can exchange it for bitcoin and then deal peer to peer with merchants for goods with no parasitic middleman.
Spacex will have the earth covered in internet satellites over the coming years which will lead to massive chunks of the earth’s population having access to the internet with instant access to decentralized currency and finance. There are already examples of small communities creating local economies and minimising outflows of capital to the corporate octopus; something I try to achieve by using cash and spending at local community businesses.
Large chunks of the earth’s population already have access to internet and all the wonders that entails. SpaceX showed its true colors a couple of weeks ago with military testing. It’s the 1%’s means of maintaining global control.
Thank you for the article Mr Mazaheri.
Can you please comment on JP Morgan’s fairly recent statement that “We believe the dollar could lose its status as the world’s dominant currency (which could see it depreciate over the medium term) due to structural reasons as well as cyclical impediments.” I also believe they claimed (somewhere) to be advising their “clients to get out of the dollar” in the midterm.
I took this from The Hill via the below link:
https://theworldnews.net/us-news/the-end-of-the-dollar-as-we-know-it
But not for any special reason. A search of the comment will produce numerous sources.
Thanks
A revolution might be needed. Hopefully it won’t be Islamic.
Global insurrection against banker occupation.
A sober article. I note the yen has risen slightly relative to the dollar recently, but only slightly. Note, in hard times, gold has the disadvantage of attracting violence. It is better to have skills than assets.
Dollars mean little when most of the goods sitting on shelves around the world are made in China.
fiat (paper) currency
Real money has intrinsic value.
You spice up the article by tossing in digs at Trotskyism, but then later you contradict yourself by indicating that a socialist revolution would trigger the defeat of the Banker’s “Conspiracy” to maintain control the international monetary system?
Just how does one defeat the 1% in the present era without applying the principles of Permanent Revolution in an era of Neo-Liberalism?
If the very rich continue abusing the poor, they will just cause more poverty, hunger, despair… Eventually, the table will turn, no? This situation cannot last forever. Capitalism will indeed “implode under the weight of its own contradictions” as the exploitation of the people for the enrichment of the few will cause a movement for change, a historic block that will bring about change, as Gramsci predicted. It will not be a revolution: since the murder of Che Guevara (1968), many Latin Americans believe that, after decades of repression and assassination of leaders, the time of revolutions is over.
I believe that the SARS-CoV-2 is being used to disguise the present financial market crash, and the consequences of this crash will temporarily be blamed on the virus… However, look at India: the forced lockdown caused a huge migration, of those who lost their jobs/sources of income, to the countryside, to where they had come from, destabilizing the government and basically making the whole lockdown idea unrealistic. The media is not telling us what is really going on in many underdeveloped countries (South East Asia, Africa, Latin America), as it would show the clear extent of the crisis.
https://www.dailymail.co.uk/news/article-8171591/Chaos-India-hundreds-thousands-try-home-wake-coronavirus-shutdown.html
Hunger in the near future has already been predicted by analysts of the market who said that the price of food will have to increase due to shortages, and the impoverished countries, most of them exporters of food, will be the first to have inflation — which will cause famine as food will be priced above that which the poor can afford. It has been predicted that the number of hungry people will at least double; since over 800 million people are already going hungry, it will be a tragedy…
https://www.youtube.com/watch?v=8fibBRkk3Ms
https://reliefweb.int/report/world/covid-19-and-5-major-threats-it-poses-global-food-security
https://www.theguardian.com/world/2020/apr/09/coronavirus-could-double-number-of-people-going-hungry
Will the local governments in those food exporting countries survive the internal pressure to feed its own people before exporting food? We will see. The world will soon shift its attention from the WHO to the FAO (Food and Agriculture Organization of the United Nations).
http://www.fao.org/news/story/en/item/1268719/icode/
http://www.fao.org/3/ca8388en/CA8388EN.pdf
Have you ever heard of the practice of banging pots and pans in Latin America in protest when there are food shortages in the market, when there is fear of hunger, or when the price of food is too high for many people? Recently, one of those protests lasted over two weeks and obtained a change in the stance of the very stubborn Brazilian government in relation to the SARS-CoV-2.
https://theprint.in/world/banging-pots-pans-not-just-an-indian-thing-brazil-using-it-to-protest-against-bolsonaro/393005/
You may say that “…some rats always find a way to survive a sinking ship”. I can argue that this is not always true. Certainly not if the ship sinks during a storm in the middle of the ocean. The present crisis is just like a storm in the middle of the ocean for the sinking, broken ship of imperialist-capitalism. We should be confident that, this time, the rats will drown.
Looks like most people are forgetting the much more powerful player in this era than dollar, US, economic system. It’s of course – the nature. COVID-19 is just the beginning of era of endless pandemics where current COVID-19 will likely be just new normal and once in decade there will be much worse. Ecosystem is broke and your socialistic, capitalistic etc remedial operations can’t fix it. Your “return to normal” will be much painful operation than guessed. Babe, it’s post Stalingrad retreat. Even Greens are helplessly naive.
“What also happened in March? Just like in 2008, the US immediately opened more “currency swaps” – loaning scores of billions of dollars to their main client states to satisfy dollar demand… and make them even more beholden to maintaining dollar supremacy.”
I thought that was to prevent them from selling their US Treasuries?