Dear readers. This might be the biggest financial news to hit the Internet since Bear Stearns and Lehman Brothers. I, and many other experts with far better understanding than I have, such as Catherine Austin Fitts and Krassimir Petrov, have been saying this for years: Oil will not be priced in US dollars for long. When the move away from the Petrodollar happens, the US Empire will fall. From The Independent:
”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.
[…] Brazil has shown interest in collaborating in non-dollar oil payments, along with India.”
This will mean that oil will no longer be priced in US dollars, just like Krassimir Petrov wrote in his legendary article from 2006, “The Proposed Iranian Oil Bourse” (also read my post about his article and Venezuela). This is the End of the US Empire. (For historical comparison to inflation and the fall of the Roman Empire, read and listen at Mises.org).
”The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China’s former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. “Bilateral quarrels and clashes are unavoidable,” he told the Asia and Africa Review. ‘We cannot lower vigilance against hostility in the Middle East over energy interests and security.’”
This is huge, folks. The Chinese are openly saying what many have been arguing for many years: they will not stand down if US keeps enforcing the Carter doctrine. The Independent continues:
”Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.”
Again, this is the hidden story in world affairs. The first thing the US did after the (second) invasion of Iraq was to turn the Iraqi national currency reserve back from Euros into US dollars. The Chinese are saying they will defend their energy and trading partner interests in Iran:
”China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources.
[…] Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls.”
If the US and/or Israel attacks Iran, Russia and and China will dump the US dollar over night forcing the US into hyperinflation way before 2018, the date that The Independent suggests.
”The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.”
Yes, it will be gold. The Chinese have been buying as much gold they can find for the last years. Only the Communist Party of China knows how much, but the official data tells it all. Yesterday we saw a huge and sudden move north in the price of gold in US dollar terms (below) which always means (as long as gold i priced in USD) that the USD Index falls (left). The Independent story was picked up by BBC News:
”It said the proposal was to move oil away from the dollar over nine years.
The speculation saw the euro rise 0.5% against the dollar to $1.47222, while the pound was up 0.4% to $1.59910.
The dollar was also down 0.7% against Japan’s yen to 88.91 yen.”
The Independent aslo notes:
“These plans will change the face of international financial transactions,” one Chinese banker said. “America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.”
Only hours after, Reuters makes a followup ading typical financial non-sence:
“The report did not make clear how the change would work, and many analysts doubted it would occur any time soon, despite mounting speculation about the dominant role of the U.S. dollar in global commodity trade and as the world’s main reserve currency.
‘I don’t think we will see much concrete action coming out of such discussions because even when the dollar is weak, it doesn’t mean that commodities are undervalued,’ said David Moore, commodities analyst at the Commonwealth Bank of Australia.”
As stated above, China is one of the most important trading partners of the Middle East. Why? Because they have a mutually beneficial relationsship: The Middle East has oil the Chinese want, and the Chinese produce, and export, goods the Middle East wants. The US doesn’t export anything, except paper debt. The move away from US dollars will not be ”a big hurdle” for the Middle East and the rest of Asia. It will be a huge hurdle for the US of A and for its citizens. If you are reading this from the US, buy gold now. Citizens living in other countries have a little more time. The US dollar will callapse first.
By the way, the Independent article was picked up both by GATA.org and by Jim Sinclair at JSMineSet.com, two websites I cannot recommend enough.
