Showing posts with label Reserve Currency. Show all posts
Showing posts with label Reserve Currency. Show all posts

Thursday, November 30, 2017

Russia & China Use Logic When it Comes to Gold

 


Russia & China Use Logic When it Comes to Gold


Posted with permission and written by Rory Hall, The Daily Coin


 


 



Russia & China Use Logic When it Comes to Gold - Rory Hall

 


As we reported both here and here, gold is the answer going forward. How we the people will access physical gold or if we will be able to access physical gold is really the only remaining question. How high gold is going is the other important question. I hope it doesn’t get into the lofty heights that have been suggested in recent years - highs like $7,000, $9,000 and even $10,000 an ounce, as it would be much harder for people to use in everyday transactions. Unless, of course, it was on the blockchain or some other yet-to-be-developed type of fintech.


 


It is also no secret that Russia is looking for the exit door where the Federal Reserve Note (FRN), world reserve currency, US dollar is concerned. Russia has made it very clear they are making all the moves to stop using the FRN/US dollar as their primary currency to settle international trade. Gold will probably handle Russia’s trade settlement just fine.


 








Gold Is Russian Answer To U.S. Dollar Dominance – CPM Group











Russia’s increased purchases of gold is not a red flag, but a clear message of diversification away from the U.S. dollar and its “monetary hegemony,” according to Jeff Christian, the CPM Group managing director.








In October, Russia added another 21 metric tons of gold, which tripled the amount over the last decade and brought the overall total to 1,800 tons.









Russia has added, approximately 18 tons per month, every month, for the past 3 years. At their current pace Russia will move ahead of China into sixth largest gold hoard by late Q1 2018.


 








But, it’s “business as usual for Russia,” Christian told Kitco News at the Silver & Gold Summit in San Francisco. “[Russia is] finally able to execute on a long-term desire to rebuild their [gold] inventories and to diversify away from the dollar.”








Russia has witnessed most of its gold reserves sold off after the breakup of the Soviet Union, which it has been attempting to regain since about 1997, Christian pointed out.








“In 1997 to 2005 [Russia] didn’t have the foreign exchange and capital inflows needed to convert money to gold. But, as the oil, palladium, and nickel prices started rising in 2005, all of a sudden, Russia’s economy had a massive inflow of U.S. dollars.”








But, the Russian government quickly realized that it had a problem relying on the U.S. currency, said Christian.








“Russia had a massive inflow of U.S. dollars at a time when the U.S. government was increasingly hostile toward the Russian government,” he noted, adding that Russia decided to diversify away from the American currency.








Christian added that Russia is not alone in sending this kind of message of diversification, highlighting that China as well as many other countries are on the same page.








“China in Q1 2009 bought a lot of gold that was supposed to go to China Investment Corp, the sovereign wealth fund. And instead, the government decided to add it to monetary reserves to send a message to the U.S. Treasury that China can in fact diversify monetary reserves,” he said.








Change is in the air, according to Christian: “There is a great dissatisfaction with the monetary hegemony that the U.S. has exercised since WWII and [the world] will move towards some sort of post-Bretton Wood floating exchange rate program at some point in the future.”









You know there is a serious alliance between Russia and China when even Jeffrey Christian can’t discuss one without mentioning the other. These two countries are working hand-in-glove to displace the FRN from its world reserve currency status and move into a system that includes gold at the foundation. Neither country wishes to upset the warmongers in Washington DC as these two countries understand they are dealing with an unstable group who haven’t honored one treaty they have ever signed – not one treaty in all the history of Washington DC has ever been honored. Russia and China are just going about their business of conducting business and when all the major competent pieces are in place it will be too late for the US/Uk to retaliate.


 


 


Questions or comments about this article? Leave your thoughts HERE.


 


 


 


 


Russia & China Use Logic When it Comes to Gold


Posted with permission and written by Rory Hall, The Daily Coin


 


 


Check out these other articles by our contributors:




Dave Kranzler -  Bitcoin’s Inconvenient Truths: The Silence Is Deafening


Craig Hemke - Banks Again Defending Silver"s 200-Day Moving Average



Ask The Expert: Jim Willie

Friday, September 1, 2017

Why it's nearly impossible to trade Currencies with success

(Elite E Services) — 9/1/2017 — As we have explained in our book  Splitting Pennies – trading FX is nearly impossible; or at least, it may be possible for some time, but in the long run, it’s a near certainty that without the use of professional algorithmic trading systems you will blow up your account.  That’s because of the dynamics of how FX works vs. other markets.  In traditional markets, there is a bias towards positive movement; all CEOs of public companies want their stock to go higher.  Bull traders, 401k investors, pension funds – basically everyone wants the stock market to go up.  The short sellers aren’t ‘pessimists’ so much as ‘realists’ that over-inflated P/E ratios are a sign for a crash from unrealistic levels.  This is NOT the case in FX.  Currency markets have opposing forces like ‘gravity’ and ‘anti-gravity’ – every country wants both a strong currency and a weak currency.  This may seem illogical, welcome to the world of Currency!  The reason is simple – exporters want a cheap currency and importers want a strong currency.  Politicians usually favor a weak currency because it’s good domestically and big business favors a strong currency (at least in the USA) because USA is a net importer.  Let’s have a look at today’s USD action most noticed in EUR/USD:


EURUSD


On the surface this looks like a great trading opportunity – but is it?  EUR went up on poor US Payroll data; and then fell on dovish jawboning from the ECB.  Planned conspiracy to manipulate FX or just random brownian movement?  Believe what fits into your mind that helps you sleep at night, either way – would you have been able to buy EUR at 1.1924, sell near the high at 1.1980 and then reverse, covering near 1.19 handle?  All within 10 minutes?  Maybe someone did it, even if by accident, but the point is that any trading plan or investment strategy shouldn’t rely on the ability of such skills because even if as a trader you were able to achieve this great feat – would it be able to repeat it, day in and day out – for years?  Probably not.


Enter more paradox such as “Triffin Dilemma”:



The Triffin dilemma or Triffin paradox is the conflict of economic interests that arises between short-term domestic and long-term international objectives for countries whose currencies serve as global reserve currencies. This dilemma was first identified in a 1929 book, Gold and Central Banks, by Polish economist Feliks M?ynarski,[1] who identified a fundamental instability in a gold-based international monetary system, that the reserve currency countries would tend to accumulate foreign reserves, but as the volume of these grew relative to the country’s gold reserves, international investors would begin to fear suspension of convertibility; later in the 1960s, it was rediscovered in the context of the Bretton Woods system by Belgian–American economist Robert Triffin, who pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, thus leading to a trade deficit. Due to M?ynarski’s precedence in articulating the problem, Barry Eichengreen has suggested renaming the problem to “the M?ynarski dilemma“.[1]



This is not only true for a reserve currency – any currency has a conflict between short term and long term interests.  For example, if a currency is weaker it can help exporters in the short term to boost sales, but hurt the same exporters in the medium term when they need to go out into the world and buy raw materials for higher prices.  This push and pull is what defines modern Forex on a systemic level.  While average investors certainly don’t need to know this unless you’re planning on getting a job with a central bank, it can help any investor understand how and why Currency markets fluctuate the way they do.  It should also be noted that these forces maintain ‘bounds’ naturally, establishing a sort of ‘high’ and ‘low’ limit for any FX pair.  For example the EUR/USD now trading around 1.19, it can go in next days to 1.20 or 1.21 but not 1.90, for example.  Even in rare cases such as the “Brexit” the GBP/USD went down by less than 10% – which is a lot, for a major Currency.  So let it be known to all that these risks in FX are investable (with the help of algorithms) and hedgeable.  Looking from a risk management perspective, it is a lot more manageable than securities, commodities, or bonds – which have the finality of the ‘ulimate’ risk (default) – as Currency is ‘money’ the Euro can’t ‘default’.


A final note to all you Bitcoiners – Bitcoin is a Currency it’s only a matter of time before it’s integrated into the Forex system, because BTC/USD is an FX pair.  Good time to brush up on your FX and understand the broader market (not just the microcosm of Cryptocurrencies).


So now for the good news, the Currency Market provide a number of opportunities for algorithmic trading systems that continually profit, making FX a new budding asset class.


Today’s move is a blip on the radar, a non-event for hedgers – and a potential huge trading opportunity for algos.  Game on!


For a pocket guide to make you a Currency Genius checkout Splitting Pennies.

Thursday, August 31, 2017

Same Day FX Wars? Dollar Tumbles After Mnuchin Says "Weaker Dollar Better", Undoing Euro Losses

The smell of currency war is rising in the air.


Less than six hours after the ECB lobbed the first trial balloon of the day, when Reuters reported that ECB policymakers were "growing worried" about the recent rapid gains in the Euro, sending the EURUSD sharply, if briefly lower, the entire move is now a distant memory following jawboning from US Treasury Secretary Steven Mnuchin, who moments ago said on CNBC that "having a weaker dollar is somewhat better for trade", a statement which immediately spooked algos into dumping the USD...



... selling the USDJPY by 30 pips to 109.90...



... and sending the EURUSD right back to 1.19, where it was before the ECB"s Reuters "intervention."



And while Mnuchin also added that a strong USD in the long-term "reflects confidence", algos decided to ignore that. His key statement below:





"As it relates to trade, having a weaker dollar is somewhat better for us. What I’ve said consistently is: Where the dollar is in the short-term is less of a concern for me. I do think over long periods of time, the dollar strength is an indication of the reserve currency and the confidence that people have in the U.S. economy."



Then again, when asked by Liesman if a strong dollar is good for the U.S., he responded “it’s not a question of whether it’s better or not, it’s somewhat inevitable given the strength of the U.S. economy and the confidence that people have.”


While not nearly as FX moving, Mnuchin also said that the Administration"s aim is to get a 15% tax rate, explicitly said he was working with Gary Cohn and other lawmakers on the tax plan. Mnuchin also said that he meets with Yellen on a weekly basis and has a "constructive dialog" with the Fed chair, although he refused to comment on her future, and said Trump would decide the next Fed chair.


More amusingly, on the topic of the tax package he vowed that "there absolutely is a tax package", that revenue neutrality remains under discussion, and promised that the tax reform package will pacy for itself with US "growth."


Finally, he said that while more money is needed for Harvey, he wouldn"t say how much, while on the topic of the debt ceiling he did note that "nobody would let the US default."


His key comments courtesy of Bloomberg:


  • MNUCHIN: HAVING A WEAKER USD IS SOMEWHAT BETTER FOR U.S. TRADE

  • MNUCHIN: THERE ABSOLUTELY IS A TAX PACKAGE

  • MNUCHIN: TAX PACKAGE SHOULD BE PAID FOR WITH ECONOMIC GROWTH

  • MNUCHIN HE"S BEEN WORKING WITH COHN, LAWMAKERS ON TAX PLAN

  • MNUCHIN SAYS BLUEPRINT TO BE RELEASED FOR CONGRESSIONAL REVIEW

  • MNUCHIN SAYS REVENUE NEUTRALITY IS UNDER DISCUSSION

  • MNUCHIN: PLAN INCLUDES MIDDLE-CLASS TAX CUT, SIMPLIFICATION

  • MNUCHIN SAYS OBJECTIVE IS TO GET CORPORATE TAX RATE TO 15%

  • MNUCHIN: TAX PACKAGE SHOULD BE PAID FOR WITH ECONOMIC GROWTH

  • MNUCHIN: SEPT. 29 DEBT CEILING DATE COULD MOVE A LITTLE

  • MNUCHIN SAYS WE"RE ON TRACK TO GET TAX PLAN BY YEAR END

  • MNUCHIN SAYS NEXT BIG CASH DATE IS SEPT. 15 W/ CORPORATE TAXES

Thursday, July 20, 2017

Is The Real Dollar Pain-Trade Lower?

Authored by Kevin Muir via The Macro Tourist blog,


Although I am sure they were some traders advocating shorting the US dollar into the Trump bump, they sure seemed few and far between (apart from this badass cat who nailed the trade and is now covering into the USD weakness).



In fact, when I think about the opinions from the “cool kids” over the past six months, I can only recall all-out-bulls, or unsure fence sitters. Name me a big-name US dollar bear pounding the table - none spring to mind.


And in the heyday period following Trump’s election, the US dollar bullishness was downright exuberant.


http://www.thefringenews.com/wp-content/uploads/2017/07/themacrotourist.comMTIJul1917-fcba8eda14423cb9c53f2f2b55028d8b4bce36ca.png


http://www.thefringenews.com/wp-content/uploads/2017/07/themacrotourist.comFuturesJul1917-aef9a8ecd3c3f96b5ff9ea08ade82b27df94b8de.png


“Super dollar bull market” was a recurrent theme amongst the myriad of bulls who were convinced the US dollar was headed to the moon. Whether it was due to Trump’s supposed superb business acumen, or the acceleration of the emerging market USD debt obligation payback vicious circle, all these bulls had their own reasons why greenback would continue to appreciate.


Well, how did it turn out?


http://www.thefringenews.com/wp-content/uploads/2017/07/themacrotourist.comDXYJul1917-74c5fb5cdb033c6f5607e1fd8e793b65976e6519.png


A complete dud. Trump’s inauguration proved to be the top, and it has been nothing but downhill since then. I am actually quite mad at myself, fading this consensus trade proved to be one of the greatest trades of 2017 (and yet another example of how in this day of limited alpha, the best trade is fading the crowd).


Yet the interesting part of this extended move? No one is getting excited about it.


I pulled up my composite speculative positioning of CME currency positions, and it is pretty well zero. US dollar specs are almost as flat as your uncle’s drunken campfire singing at a cottage long weekend.



Recently, two terrific, must-follow, twitter traders were discussing this situation. 13D Research, author of the terrific What I learned this week, first made a comment about the possibility of this US Dollar move continuing.


http://www.thefringenews.com/wp-content/uploads/2017/07/themacrotourist.com13DJul1917-ed13304c280624f8ac2a30a2f201574a4d091074.png


But then, Luke Gromen, who pens Forest for the Trees, chirped in with a comment I felt was especially apt.


http://www.thefringenews.com/wp-content/uploads/2017/07/themacrotourist.comLukeJul1917-77ee71696d7ff4ebc2bada5a7ddb267f4456cd1c.png


Luke is right. No one is talking about this US dollar move continuing. I get the sense it’s actually the opposite. Most traders are still worried about the potential for the US dollar bull move to resume. If they are long any currencies, they have one finger on the sell button.


I get it. It’s tough to forget the pain from the relentless US dollar rally of the past 3 years.


When I was thinking about this situation, my mind wandered back to a MacroVoices interview with Tian Yang from Variant Perception. I had never heard Tian before, and I must say, I enjoyed his analytical approach immensely. But his comment about Morgan Stanley’s Stephen Jen’s smile theory really struck home. According to Jen, the US dollar does best when the US economy is really strong, or really weak. That immediately made intuitive sense. When the market is expecting US outperformance, the US dollar goes up because of higher rates and flows rushing into the US. During periods of economic stress, the reserve currency goes up as debt is paid down and US dollar credit is destroyed. But that has to leave a whole bunch of time when the US dollar goes down.


From 2014-2016 we were in the US outperformance period of the smile. That enthusiasm about US economic performance climaxed with Trump’s election and the fairy dust dreams about the new President’s economic prowess.


There were some pundits who believed we would switch from the positive part of the smile, to the other side, as the Fed hiked too fast, and caused a market disruption. But isn’t it more likely that this transition from one side of the smile to the other takes some time? Wouldn’t a period at the bottom of the smile be more probable?


And going back to Tian’s interview, here is a chart that shows the US dollar’s performance versus real rate differentials.


http://www.thefringenews.com/wp-content/uploads/2017/07/themacrotourist.comVariantJUl1917-ec1821b3c99351cd1d350ed0efab115cb02b154f.png


As you can see, the US dollar was way over its skis last year. And 13D’s forecast of a continued slump is by no means out of the realm of possibility to correct the difference between real rates and the US dollar.


(As an aside, if you want the full Variant Perception’s package from the interview, I uploaded it to my server and you can download it here. And while you are at it, make sure you head over the MacroVoices and help out Erik and Patrick by signing up to their weekly email. They produce this terrific show each week for free, and the size of their member list helps in attracting great guests. They won’t spam you, and not only that, it is chock full of great research pieces like the Variant Perception presentation.)


Today we have both the ECB and BoJ meeting. Could some renewed dovishness cause the US dollar to pick itself off the mat and rally a little? For sure. The US dollar is oversold and due for a bounce.


But a little part of me wonders if everyone is looking for a US dollar rally to sell into. I don’t yet know what I am going to do. I too, am looking for a better entry, but that makes me just another mope. Sometimes the best trades are the ones no one believes in, and which do not offer a clean, easy entry. Luke Gromen is right when he says there isn’t a soul alive who thinks the DXY could fall below 80. Don’t forget that markets often go to points least expected, and where they hurt the most participants. With the world massively overweight US financial assets, I almost wonder if the real US dollar pain trade is lower.

Thursday, June 29, 2017

Cranfield: "This Was A Watershed Week For The Euro: Beware Of Getting Steamrolled"

After three days of fireworks for the Euro, when it first surged on Draghi"s hawkish comments, then tumbled on the ECB"s "clarification" to Bloomberg that the market had overreacted to Draghi, then continued to surge after Draghi himself did little to dissuade the market it was wrong, the common currency is now trading at above 1.14, or 1.1425 to be precise...



... the highest level in one year, and on a relentless push higher, as the dollar tumbles, because as Sean Callow, currency strategist at Westpac says, “it will take more than anonymous ECB sources to cool the desire to bet on the euro and dump the dollar,” and adds “many investors are tantalized by the prospect of key quarterly meetings in September producing no move from the Fed but a plan to wind down quantitative easing at the ECB.”


But how did we get here so fast, just a few months after virtually every sellside desk expected parity with the USD, and what"s next? Here are some thoughts from the latest "Macro View" by Mark Cranfield, former .FX trader who currently writes for Bloomberg.





Euro Is Dancing the Macron, Draghi Two Step:



This week could be seen as a watershed for the euro, the week when all the stars align to set up a powerful run in the second half of the year. 



ECB President Mario Draghi is acknowledging reflationary forces as investors are getting comfortable with improving European economic and political fundamentals.



The tectonic plates are shifting in favor of the euro, even if some ECB members are saying that markets are jumping to the wrong conclusions.



At the beginning of 2017, research notes were being circulated with scary maps of the European electoral earthquakes ahead, starting with the Netherlands in March.



It was going to be a roller-coaster year. The rise of populism had been given a steroid boost after the U.S. presidential election and European nations were poised to follow by electing their own version of Donald Trump. The old order was going to be toppled, even Angela Merkel seemed vulnerable.



Not quite, as it’s turning out. Even the threat of a destabilizing Italian vote seems to be evaporating.



The Trump effect isn’t coming through, and the new order is being led by a staunch European supporter called Emmanuel Macron. European politics is going from zero to hero.



What a contrast with the developments across the Atlantic.



Looking at a long-term picture of euro-dollar, one can see the potential for a major breakout as bullish momentum builds up. The pair has essentially been in a range between 1.05 and 1.15 for the past two and a half years after the huge collapse in 2014-2015. If it does break the top side it probably won’t be quietly.



When the world’s number two reserve currency gets rolling, it’s probably best to get on board or run the risk of being steamrollered.


Thursday, October 20, 2016

East Vs. West Division Is About The Dollar - Not Nuclear War

Submitted by Brandon Smith via Alt-Market.com,


The interesting thing about working in alternative economics is that inevitably you will become the designated buzzkill. You may be presenting the facts on the ground and the reality behind the numbers, but most of what you have to report will not be pleasant. Alternative economists are doomed to be labeled “doom and gloomers.” And that’s okay…


The truth is what it is, and sometimes it hurts people obsessed with undue positivism and bull market naivety. However, as bad as we seem to be when it comes to a negative outlook, we do not necessarily present the most ugly options on the table.


There is an undeniable trend by some within the liberty movement to assume a Mad Max-style end game to our ever expanding house of cards. That is to say, they see the only plausible outcome being apocalyptic in nature, and nuclear holocaust fits well within this viewpoint. In many cases, the argument is sometimes presented that WWIII is in the best interests of global elites seeking a catalyst for their so-called “new world order.”


This is not to say that I don"t think WWIII is a possibility; it certainly is.  But I remain rather skeptical of the usefulness of nuclear war for the elites. Primarily because everything they openly claim they hope to accomplish can be accomplished without nukes.


The narrative of a coming conflict between the East and the West has been boiling steadily as the U.S. election nears its end. Even the mainstream media is insinuating the potential for shots fired. Some believe the results of the election will determine the odds of war. I hold a different position. It seems to me that the rhetoric of East vs. West and nuclear exchange is being exploited as a distraction away from a different but almost equally catastrophic end game — the death of the U.S. dollar as the world reserve currency.


First, let’s be clear; nuclear war does little to serve elitist interests. Consider the fact that globalists have been working diligently since 9/11 to install a vast electronic surveillance infrastructure in major cities around the world. This includes a pervasive video surveillance presence, biometric data collection, facial recognition, voice fingerprinting, etc. This is not only occurring in the U.S. and Europe, but in China and Russia. Vladimir Putin signed the Orwellian “Yarovaya Package” into law in June in Russia putting into motion an electronic surveillance apparatus directly on par with any measures exploited by the NSA. Perhaps ironically, even Edward Snowden, currently living in Russia under asylum, criticized the amendments.


The point is, an elaborate and costly digital control grid is being built all around us. It makes very little sense for the elites to achieve such a level of full spectrum awareness and then flush it down the tubes in a 1.2 megaton blink of a eye. Keep in mind that a nuclear exchange also includes the targeting of military satellites — everything surveillance worthy will most likely be thoroughly toasted.


Another issue to consider is the psychological underpinnings of elitism. Elites generally exhibit psychopathy, but it is a psychopathy driven by narcissism rather than nihilism. Narcissists tend to shy away from self destruction and the destruction of the treasures they believe they are entitled to. The elites want total centralization of power and influence, and they want the masses to accept or even demand a system in which globalism becomes sacrosanct. They want the Earth, and they want it nice and pristine for themselves. They might be willing to sacrifice certain appendages of the system, but they are not intent on vaporizing the entire prize.


Given, psychopaths also do not like to lose. They do have a propensity for attempting to take others down with them if they are on the verge of failure. That said, I think the recent reports of the demise of globalism are greatly exaggerated.


The narrative of coming world war revolves around certain assumptions. For example, some liberty proponents argue that the success of the Brexit referendum, the Trump campaign and the rise of sovereignty movements are an existential threat to the globalist empire. In their minds, a nuclear war triggered by the elites at this stage makes sense because globalism does appear to be “losing.”


As I outlined in my last article Global Elites Are Getting Ready To Blame You For The Coming Financial Crash, this is simply not the case. In fact, the rise of conservative and sovereignty movements in the West sets the stage perfectly for the elites to initiate the final act of a world changing fiscal crisis. With these conservative movements in “power,” the ongoing economic collapse can then be blamed on “dangerous populists” rather than the international bankers that created the problem to begin with.


The globalists are not on the run, they are playing the Hegelian dialectic game as they always have; problem, reaction, solution.


And, as I have evidenced and outlined in great detail in numerous articles, the “conflict” between East and West is an engineered sham. At the top of the political and financial pyramids of every major nation, including Russia and China, the elites promote globalism and a one world currency under the control of the International Monetary Fund. Putin has openly supported IMF dominance of the global financial structure and the implementation of the SDR as a bridge to a global currency system. Chinese officials have done the same, and as of October, China is a major liquidity amplifier for the SDR. The BRICS bank, which was supposed to be a counterweight to the IMF and World Bank, actually works in collusion with the IMF and World Bank. The bottom line? There is no East versus West, at least not where the elites are concerned.


The Russians and the Chinese are NOT on our side.  They are not even on their own side. The only legitimate opposition to the globalists is in the form of grassroots movements with very little concrete political influence. Whatever political influence we do gain tends to be quickly co-opted by deceitful measures and false leaders that ultimately serve the elites. Even the Brexit and a Trump presidency are not a real threat because they are functions of a system that the elites control in the absolute, and they would never be allowed to gain traction unless the elites needed scapegoats for a greater economic crisis.


Our fight has so far been one of disseminating information and countering propaganda; political battles have been rather fruitless. So, again, nuclear war hardly serves the interests of elites under these favorable conditions.


Nuclear war is also a very poor way of managing the darker goals of globalists. Their desire for substantial population reduction, for example, could be attained far more efficiently through economic collapse and mass starvation rather than the use of missiles and bombs. Food is a better weapon than smashed atoms ever will be. But if the false East/West paradigm is not setting the stage for nuclear war, then what is it being used for?


As I have examined in the past, the division between East and West far better serves the elites in their effort to slowly but surely unseat the U.S. dollar as the world reserve currency and replace it with the SDR basket — the next major step towards a single global currency system and a single global monetary authority.


Let’s be clear, the globalists are NOT pro-dollar or pro-America. They never have been. In fact the Federal Reserve has been destroying the dollar’s purchasing power since the central bank’s inception. And, by asserting the dollar as the world reserve currency, the Fed has actually placed America in a position of severe financial weakness rather than strength. Our dependency on the dollar’s world reserve status to sustain our living standards is so complete that the loss of that status will indeed crush our country. Our system cannot function without reserve status.


I’ll break it down even further; through the death of the dollar, the elites not only set in motion the chaos needed to justify total centralization and a world currency alternative, but in the process they also could remove the greatest threat to their control — those millions of American citizens still holding to conservative ideals of sovereignty and personal liberty.


The East vs. West paradigm creates a perfect rational for the end of the dollar’s reserve status. Just look at the geopolitical trends in motion.


Saudi Arabia with its vast influence over many OPEC nations is shifting away from the U.S. and building closer ties with Russia and China. The distancing of relations between the U.S. and the Saudis is even being encouraged in the U.S. through the passage of the 9/11 Saudi lawsuit bill. This will inevitably lead to the end of the dollar’s petro-status and, by extension, aid in the end of its world reserve status.


Turkey is now gravitating towards Russia and away from NATO after the very odd and most likely staged “coup” that has given Erdogan unprecedented room for dictatorship. This new relationship may even include military support from Russia.


Foreign central banks around the world, including Saudi Arabia and China, are currently liquidating their U.S. treasury holdings at record pace.  The program for "de-dollarization" is already well underway.


The U.S. overall has also lost considerable goodwill among the peoples of the world (or what little goodwill it had left) in the wake of revelations that it along with allies has essentially instigated the breakdown in Syria and funded militant groups that make up the skeleton of ISIS. The continued function of our involvement in destabilizing Syria has no other benefit to the U.S. except to undermine the image of America. It does not give us increased oil dominance. It does not give us increased regional dominance. In fact, our presence in Syria only continues to harm us and bring us into dangerous proximity with Eastern interests.


There are people who do benefit from this dynamic — the globalists.


The U.S. is painted as the bumbling villain of our little story, greedy and blinded by visions of empire. The East is set up as the more rational party, the mediator trying to reason with Western madmen. For the globalists, the death of the dollar, which has been an ongoing project of theirs for decades, can now be completed, and they will receive NO blame whatsoever. History, if it is written by anyone other than liberty champions, will say that the East, not the central bankers, destroyed the dollar’s reserve status because it had to. History will say that we had it coming.


In the aftermath, the elites hope to come to the rescue as global economic instability erupts with the failure of the dollar system. As they openly admit in The Economist in 1988, the dollar must be replaced by the IMF’s Special Drawing Rights; the new world order needs a great financial reset before it can take root. But, this is a much different methodology from widespread nuclear war.


Questions arise as to November’s election and how this might affect East vs. West relations. I see no indication that it makes a difference who ends up in the White House as far as the economic result is concerned. As I have stated before, I believe Trump is the most likely candidate. Relations with the East are already in irreversible and engineered decline and even if Trump has good intentions, the globalists will pull the plug on financial support to markets not long after he enters the Oval Office. Eastern nations have been preparing for a break from the dollar for years. They work closely with the IMF. If anything, Trump’s presence will accelerate the reset.


I think the notions of nuclear war and East vs. West conflagration endure for many reasons. An extreme distaste for Barack Obama has led many liberty proponents to assume that the man will never give up his seat of power. These people do not understand that Obama is nothing more than a Muppet, a middleman with no true influence. The elites do not need him in office to continue their program.


Others assume that the mere chance of a Trump presidency is so dangerous to the elites that they would rather push the nuclear button than risk it. I think this is a bit naive. As stated in past articles, conservative movements are gaining control of a ship that is already sinking. They are being set up. A Trump win might help the elites. If the U.S. economy and currency collapses under Trump, conservative movements can be blamed. If they collapse under Clinton, the banking cabal will be blamed. It seems clear to me which option better serves elitists.


A nuclear war is also perhaps subconsciously enticing to some people. The idea that the slate could be wiped clean leaving only the prepared to come out of the smoke and ash to rebuild could in some ways be considered a preferable outcome. Compare that to liberty movements taking the blame for an economic calamity while battling against an encroaching globalist machine, sacrificing for years or possibly decades on the mere chance that we can, through force of will and ingenuity, defeat a well organized empire with an established mass surveillance network and millions of duped citizens on its side.


Hell, I’m actually an optimist when it comes to our ability to overthrow globalism, but I see no easy way out of this situation. I find it saddening that the coming fight is so frightening to people that they would rather assume a nuclear nightmare is on the way. The slower agony of economic decay and a rebellion against Big Brother may be less appetizing, but in my view, it is unavoidable.