Part One: The havoc of the Petrol Dollar.
US treasuries or bonds is a worldwide ponzi scheme to suck in the wealth and riches of all other countries. USA is a very heavily indebted country. It has a national debt of about $US 26 trillion. So US sells treasuries to other countries to keep its economy afloat. China and Japan hold about two trillion and one trillion American bonds or treasuries respectively. Practically almost every other country holds some billions or hundreds of millions of US treasuries.
The ponzi scheme works because of the American toxic Petrol Dollar. It all began in 1973 because of the demise of the previous Bretton Woods Agreement of the Gold Standard where every American dollar was once solidly backed by gold and where every ounce of gold was pegged at $US35,00. In short if you hold three hundred and fifty billion American dollars you can demand payment from US government in real solid gold to the equivalent value of that amount at the exchange rate of $US35 per ounce of gold.
However, since 1973 the US dollar is no more supported by gold or other precious metals or resources. The dollar is then known as the Petrol Dollar. US tricked and armed twisted Saudi Arabia and other Arab oil producing countries in the Middle East to trade and sell oil or purchase other products only with $US dollars only. So eventually every country which wants to buy oil or trade with America and other countries must first buy $US dollars. America's Private Federal Reserve Bank just need to print all the billions or trillions of paper notes to meet this demand. It means US has actually been paying nothing for its trade with the world. The buying or selling or trading via the $US dollar must go through "SWIFT" the American control International Monetary Exchange. American dollars is now just fiduciary issues with no gold or asset backing.
America is now using the Petrol Dollar as a weapon to contain and constrain China's economic development. It denies China the right to buy US assets or companies under the fake distorted reason of for national security. America and its allies Australia, Britain, France and Germany are colluding to deny China to invest in their companies or assets. America needs Chinese loans to bail out its economy but will not allow Chinese companies to buy its failed companies. So China can continue to hold the toxic Petrol Dollar but unable to use it.
China may want to unload the Petrol Dollars and sell back the treasuries to US. Here comes the catch. As the saying goes "If you owe the bank one million dollars, you have a problem, but if you owe the bank one hundred billion dollars the bank has a problem. China is now in this situation and America doesn't care. Even if China manages to sell the toxic bonds US Federal Reserves will just print the dollars to pay China and it comes back to square one. The only plausible avenue to get rid of the petrol dollars is to use it to buy gold and silver and other resources and then work out a solution to destroy the Petrol Dollar.
Russia has already got rid of almost eighty percent of the American treasuries. China and Russia and some other countries are already using their own currencies for trade to by pass the Petrol Dollar. The BRIC countries are working together to slowly getting rid of the Petrol Dollar. In fact many countries are already using the Chinese Yuan or swap their currencies for mutual trading.
PART Two : SANCTIONS
The Petrol Dollar enables America to use "SANCTIONS" to play havoc with other countries economy. When America sanctions your country it means you cannot conduct trading and commerce with other countries and vice versa. This is economic strangulation to destroy your country. It is a sort of collective punishment for the whole population of the country. Sanctions impoverish the country and make the people suffer. China was sanctioned by US and its allies for almost three decades after the Second World War. In early 1990s American sanctions wrecked the Soviet Russia's economy and caused the break up of the USSR. DPRk and Iran are now under US and its allies sanctions. However Russia and China being big continental countries can sustain with the strength of their huge internal economy. Iran and DPRK fortunately now has the strong support of Russia and China. But Venezuella is now a victim of American sanction and is now suffering badly .
US using Tariffs as a weapon
US is unable to compete with China in fair trade even though China is trading under American impose rules and regulations. In the last four decades American companies have flocked to China to take advantage of cheap labour. American companies have made hundreds of billions of profits every year. They re-export the products make in China to America and the Americans benefit greatly from cheap Chinese products. Now the American government claim that China is indulging in unfair trade because US has a trade deficit with China of a few hundred billion dollars every year. Actually this trade deficit is due to America's refusal to sell China high tech industries and products. Other than commercial aircrafts and a few agricultural products like soyabeans, corn, fruits, poultry and beef or pork they have practically nothing worth to sell to China. Moreover they bar China from investing in almost all their big conglomerate commercial companies claiming it on grounds of security reasons. So Trump and his pack of extreme China haters impose high tariffs on practically every Chinese product to stop China from selling to America. It is another wicked set up to punish the Chinese people collectively. However they cannot do much harm to China now because not only China now has a huge consumer population but also China now trades with almost every country in the world and is now also the biggest importer and exporter to almost all these countries.
By weaponising the American petrol dollar and using sanctions and tariffs as additional weapons US is actually building its own death knell for eventual self-destruction. All these wicked schemes have galvanized victimised countries to become more resolved, more resilient and more self-reliant.
Southernglory1
Thursday, 6th September,2018
US using Tariffs as a weapon
US is unable to compete with China in fair trade even though China is trading under American impose rules and regulations. In the last four decades American companies have flocked to China to take advantage of cheap labour. American companies have made hundreds of billions of profits every year. They re-export the products make in China to America and the Americans benefit greatly from cheap Chinese products. Now the American government claim that China is indulging in unfair trade because US has a trade deficit with China of a few hundred billion dollars every year. Actually this trade deficit is due to America's refusal to sell China high tech industries and products. Other than commercial aircrafts and a few agricultural products like soyabeans, corn, fruits, poultry and beef or pork they have practically nothing worth to sell to China. Moreover they bar China from investing in almost all their big conglomerate commercial companies claiming it on grounds of security reasons. So Trump and his pack of extreme China haters impose high tariffs on practically every Chinese product to stop China from selling to America. It is another wicked set up to punish the Chinese people collectively. However they cannot do much harm to China now because not only China now has a huge consumer population but also China now trades with almost every country in the world and is now also the biggest importer and exporter to almost all these countries.
By weaponising the American petrol dollar and using sanctions and tariffs as additional weapons US is actually building its own death knell for eventual self-destruction. All these wicked schemes have galvanized victimised countries to become more resolved, more resilient and more self-reliant.
Southernglory1
Thursday, 6th September,2018
27 comments:
Dats y got countless other planet.
It means US has actually been paying nothing for its trade with the world.
but
USA is a very heavily indebted country. It has a national debt of about $US 26 trillion.
is it no wonder why?
https://www.youtube.com/watch?v=seKRJ3JBQmc
I am confuse. Where all the money? Does peasant in America, Singapore, China all want to know where is all the money? Come, start from Singapore. Check my bank account, than slowly go up to my Minister.
People still complain Ang Moh Tua Kee? Hello, who feed peasant in Singapore? How many Ang Moh MNC here?
Singapore people complain Ang Moh Tua Kee, Penang Minister send your parents go JB, PRC come snatch husband, Sinkies are DAFT, Puah Peh Kar. From last time till now? Is old ang moh leaders and sinkies leaders strawberry? That why china now got oppo, huawei, xiao mi, zte, vivo, detain terrex? Ang moh got what? Apple? Did ang moh leaders groom local in Singapore? Where all the money go to? Is Ang Moh Scholar Goondus?
Who the culprit that is creating all this problem? See Ang Moh complain. See Ah Neh complain. See Sinkies complain. See PRC complain. See Penang Minister complain. Strawberry Cao Mei, Cao liao Fah Mei.
Can someone fine tune the lift at my house? And there is a long long plant dropping, should cut away?
Crooks are everywhere. The more intelligent they are the more crooked they become.
They invented the laws in order to tie others down and protect themselves.
They won't break the laws because they interpret the laws they created.
Even if they have broken the laws, they will never go to jail. The most they get a slap on the wrist.
To others, whatever schemes they created May be frauds or ponzi, but to these crooks they are perfectly legal.
Another factor is that these highly intelligent crooks do not have moral, ethic and conscience.
Getting what they wanted is their moral. Taking advantage of every opportunity is their ethics. And winning is their conscience.
Mahatair recently just said.
Very soon the World's Trading System br using the Yuan.
USA can keep their Dollars. Go bankrupt
Cheers
This is the reality: USA is really too big to fail. US dollar is the blood vessels n the blood supply to the world economic system n the US FED is the de facto heart.
It is perverse. But that was the genius of the Nixon Administration n the FED.
The larger the US debts actually the more powerful US has become.
Trump is a blur fark.
He does not even realize this.He action is indirectly promoting alternatives to the US dollar hegemony. Trade deficits actually perversely is good for the US.
US will remain the most powerful n the parasitic giant in the world.
This is truly a case of having the cake n eat it.
This case will remain longer than HoJinx in having the cake n eat it.
Trump is rocking the global financial structure without realizing that he is helping to create viable alternative currencies to the US dollar in the Euro n Yuan.
If Europe decides enough is enough n starts using Euro outside of Europe a viable alternative will appear. Probably in Eastern Europe n Russia n South America.
Likewise the Yuan in Africa, Central Asia n potentially part of South America. The old Silk route.
Its rocking all over the world.
Spore is positioned poorly n uncompetitively as a most costly city in the world. We are screwed especially if our huge wealth are managed by blur politicians or army generals.
To manage a family, one must be able to control the members of the family. How does one control the family members?
Answer: Finance, Food, Fuel, Freedom.
To rule a country, the leader must be able to control the citizens. How does a leader control the citizens?
Answer: Finance, Food, Fuel, Freedom.
To rule the World, the ruler must be able to control the countries. How does a ruler control the other countries?
Answer: Finance, Food, Fuel, Freedom.
The means of control are the 4 F's - Finance, Food, Fuel, Freedom.
The US is using the 4 F's to control the world, besides military and covert means.
Your government (any government) is also using the 4 F's to control you (the citizens).
You are using the 4 Fs to control your family.
UG, Knn, please solve your own problems lar. Ang moh Tua Kee is a reality also so o point complaining about itπ°
Many countries are scaling down their holdings of US dollars and switching to Yuan and other currencies. This is the peak and subsequently lesser and lesser countries will be using the US dollars and it will go kaput one day.
The Yuan is now an alternative to the American printing machine.
@southernglory
There's also the EuroDollar. No,it'snot what the name suggests nor what you think it might be. The EuroDollar is constructed purely from "balance sheet construction", i.e. "world's BEST accounting trick" π€£π
If you thought the PetroDollar was bad, you ain't seen financial engineering until you've had a look at the EuroDollar.
Eric Twonsend's "MacroVoices" has a series called EuroDollar University.
@RB et al
I doubt that there will be significant change. Cuntries might try to get off the USD system, and a few successes will result, no doubt.
However the amount of "extraordinary privilege" the USD has---world reserve currency, PetroDollar, EuroDollar is UNDENIABLE.
Whilst I agree that the gold-backed PetroYuan is a good idea, I don't think it'll have the success many pundits are predicting.
China's sovereign bond market has grown significantly. However it is not going to topple the MASSIVE US Treasuries market any time soon. The US Treasuries market is the "tool" which enables the USD to have such "unreasonable power" as it functions in the "recyling" process of the USD as well as being the most liquid and convertible asset. All central banks stock upon US Treasuries. It is the #1 "riskless" asset of the world---better than gold (unfortunately).
Ever since its inception in 1913, the world has had a love-hate relationship with The US Federal Reserve. They fucked over post WW1 Europe which led to WW2. The US was the only cuntry not to have its infrastructure and economy destroyed by WW2 (no one attacked the mainland of the USA), and thus was the cuntry with the most money after the war. US economic and financial power has dominated since.
The US Fed indirectly determines the interest rate of the whole world by controlling the yields on US Treasuries. Emerging markets fund their cuntries through US-Dollar denominated loans which is ok until the Fed raises interest rates. This strengthens the USD, and devastates the value of other currencies, making those emerging markets go haywire as investors swiftly withdraw their capital.
But the US Fed also has the power to "bail out" struggling economies by a "put" (massive injection of liquidity---i.e. printing) and other mechanisms like currency swaps. The Fed is aided by its partners in crime---the World Bank and the IMF who come into the financial systems of fucked-up cuntries and screw the citizens even further thru the implementation of "auterity measures"
USD, very powerful,and will stay that way for a long time yet.
No care what strong or not strong. Just play the market and make money but do not put all the eggs in one basket lah.
German Foreign Minister Heiko Maas had proposed a new international payments system independent of the dollar sphere and a new interbank transfer system. This is bad news for Uncle Sam. The world's greatest opportunity for growth lies in Sinification. Collaboration with China means dumping petro-dollar for Yuan. China is far ahead of Uncle Sam in boosting and transforming human capital into economic alliances. Hence, investment patterns are shifting in response to Uncle Sam's new assertiveness. Free trade will prevail over protectionism.
@ 1221
>> Just play the market and make money <<
Funny you should say that, I was just thinking of jumping back into trading π I was the world's most fucked-up trader, but with the help from people far smarter, richer and more "centered" than I am, I think I've been "reformed". October is usually a fun month for the markets. People get possessed by demons in October and do all sorts of insane things π€£ I think that's the time to make a move, being careful not to end up "demon possessed" like the herd. (easier said than done)
I need ideas. No idea, no trade. Without your own ideas, you up following the herd...to slaughter. One of the areas is the CECA agreement. I'm sure there must be opportunities to make a buck on the back of CECA. This is because CECA is "hot stuff"---i.e. extremely disruptive to the status quo. Disruptive phenomena is great, because it causes changes in human thinking and behaviour (usually more IRRATIONAL behaviour), which at some point affects how people use their money, which leads to market effects. One person's misery is another's opportunity.
Yay for capitalism! π€π½ππ½ππ»
The death of the dollar would not happen over night for sure. But everyone can see that it is rotten to the core. Bit by bit they are going to desert the dollar whenever they can. The process has started and how long will it take, no one knows, but it will happen. And the Americans are helping the process by using the dollar as a weapon against other countries which really pissed off everyone, even its allies.
@ RB
People have been complaining about USD dominance since end of ww1, when the Fed was formed. However, since then, the Fed has helped bail out nearly every class of human---other cuntries, big banks, small investors, mortgagers and mortgagees, big business, small business, you name it, the US Fed has had their hand in there. The phrase "exorbitant privilege" is from the French in the 1960s. The French wanted to convert their USDs to GOLD, and Nixon told De Gaulle to "go fuck himself". DeGaulle actually sent the French Navy to pick up the gold. Other cuntries also "buay tahan" started demanding gold for the toilet paper banana currency USD. Nixon ended the Bretton-Woods gold standard and threatened the Euros that the US will end NATO (just like Trump)---which means the Euro-trashes can jolly well defend themselves---and they can all get fucked if they didn't shut the fuck up about the gold.
My point is that anti-US/ USD/ US imperialism sentiments are nothing new. i.e. this is not "new information"...the "market" has already priced this shit in...for over 100 years. (Fed was formed in 1913)
The US Fed also helps the USA build the most awesome war machine in human history, and enabled the US to be the most warlike cuntry of all. China is swiftly catching up, and though the "gap" is closing---with their new ships, planes, weapon systems etc, they are still way behind.
The power of the USD cannot be considered in a vacuum. You have to consider the US-lead and dominated world we live in. The us answers to no one, not the UN, not the International Court. "American Exceptionalism" gives it a pass and total independence...in fact they can DICTATE policy to the world.
Many attempts to remove the USD as global reserve have been mooted. The Amero, SDRs, a move back to the gold standard (yeah, right, wishful thinking), and recently Bitcoin and other cryptocurrencies. So the idea of a partial gold-backed Petro Yuan, although new as a product, is not new as a general idea. The Petro Yuan gets a lot of press because anything out of China is NEWSWORTHY.
@ 1240
>> German Foreign Minister Heiko Maas had proposed a new international payments system independent of the dollar sphere and a new interbank transfer system. This is bad news for Uncle Sam. <<
Not necessariy. There are long, treacherous roads from an idea to its actualization in REALITY.
The above refers to the SWIFT system...a payments clearance system in international banking controlled and dominated by...you guessed it..Uncle Sam.
The Us has been using the SWIFT system to "punish" cuntries which don't tow the line, and to enforce sanctions on states like Iran for e.g., making it ver very difficult for these states to get money, essentially impoverishing them.
So a few govts decided that this is another "unfair advantage" which the US can use as a "weapon" to just hantam states who get too far with the "anti USA" sentiment, and therefore are proposing alternatives to SWIFT---which evolved as an replacement from the noisy clatter of Telex machines up until the 1970s. Russia has also proposed an alternative to SWIFT. Trump is using a "weaponized" SWIFT to bully the EU as part of the sanctions/ trade war thing.
As I said, there is no shortage of anti-USA sentiment. And no shortage of attempts to diminish US dominance throughout modern history. And like I also said, the "market" has already priced in this sentiment. Therefore there is no significant change. Lots and lots of talk though...but still ...nothing.
Uncle Sam starts a tariff war with China and imposes sanctions on Turkey and Iran. The economic crisis in Turkey is forcing President Erdogan to seek financial support, leaving the door open for China to accelerate its OBOR initiative in the region. The Sino-American trade war offers a chance for European and Japanese car manufacturers a chance to obtain pole positions in the China market. China is willing to open its market to others in return for help in its simmering trade war with Uncle Sam.
US will remain the dominant global superpower for the forseeable future unless Trump mess up big time with an all out global trade war with all major powers. Then anything goes as world war will likely be the inevitable outcome. China will not be a global superpower. Its cultural mentality n language are not so align for global power status. Nevertheless it will likely be the dominant regional superpower in East Asia, Central Asia & Africa.
USA wants hegemony and so it spent trillions on wars and military bases to show the who's boss. China prefers money and so it goes globe-trotting and networking to create wealth.
@ 335
No one is excused from making mistakes/ errors in judgement, including sitting US Presidents.
Trump might come across as "crazy" or maybe even "smart pretending to be dumb and crazy", but he doesn't start shit with cuntries unless he has reason... With the EU it's the tariffs they've imposed and the cost of NATO which Trump claims that America has been carrying water for and not getting anything of value in return.
Same line of training with China: currency manipulation, IP theft, state sponsored hacking, unfair business practices, huge trade imbalances...i.e. China is eating America's lunch.
Everything Trump is doing is straight out of Dick Morris's 2012 book SCREWED! How foreign countries are ripping off America and plundering our economy, and HOW OUR LEADERS HELP THEM DO IT .
If Trump didn't win, then eventually someone else with similar populism would get in. Americans are angry that their leaders sold them out so that locals lose and foreigners WIN. Whether or not it's true is irrelevant : in politics what the voters believe is the truth.
(PAP govt.: you better read this book and pay attention to the voters---especially the angry ones)
The "Trump Effect" has spread. The People of other nations feel cheated. This "globalisation" thing their leaders have sold them on has made many worse off. There are also immigration issues. These have been brewing for sometime. Twitter Trump was the "lightning rod" that galvanised other nations to put their leaders on notice : "Listen to us, or face the consequences...we the people will SACK you!
China as a super power
If they continue on their path, there is no doubt China will end up a global super power. In the old days of the Cold War, the ascension to "super power" was measured by how much weaponry your cuntry had and how many times over those weapons could destroy the whole world and all humanity.
Nowadays the standards have changed. No longer does ability to swing a mighty militaristic penis confer membership to this exclusive club. There are a lot of other factors, mainly related to MONEY. China will eventually end up a super power simply because it has the MONEY to influence the world, move markets, culture and seriously affect real politik and of course, wage war.
The dilemma facing every cuntry in history which has become economically successful: you have to be able to defend yourself, as well attack and destroy others, show your strength, because eventually people are going to fuck with you. Occasionally you will have to annexe territory, which means you have to be able to wage wars and win. (Every piece of now occupied territory on Earth was owned by other "tribes" throughout history) Ref: "The Worth of War" Ben Ginsberg
Sorry to all the peaceniks, pacifists and followers of Ghandi's mantra about the whole world becoming blind because of "an eye for an eye". No one believes that rubbish, and those who do will get a lesson form "reality". π€£
There's an old interview with Jim Rogers on YouTube. He says that if you want to know about the world, you have to follow the money. Who has the money? Who controls the money? Who's making the money? Who wants the money, why and what for? What are they doing with their money? Who is giving up the money, and who is getting it, and why? Who is piling up the money? ...and so on. π²π²
https://www.youtube.com/watch?v=3xt9nBMdwqc
Dollar-denominated assets account for nearly 70% of global foreign exchange reserves. The share of dollar-denominated assets in international reserves is one of the main reasons for the dollar's hegemony.
According to data from the Society for Worldwide Interbank Financial Telecommunication, the dollar's share in international payments stood at 39.85% in 2017, compared with the euro's 35.66%, the pound's 7.07%, the Japanese yen's 2.96& and the Chinese yuan's 1.61%.
If US protectionism continues, it is highly likely that the US dollar as global trade currency will be waning by 2019 to the extent that the euro might unseat the dollar as the top trade currency globally.
As the US frequently slaps unilateral trade protectionism measures on other economies and could easily threaten yet others with economic and financial sanctions, many countries - including France, Germany, Turkey and Iran - have proposed to withdraw from the US dollar-based system and build a payments system independent of the dollar.
Facing US trade bullying, there is a chance that European countries including Germany, France, Britain and Russia, and East Asian countries such as China, Japan and South Korea could join hands to build a new international payments system. The combined size of these economies and their trade is undoubtedly greater than the respective figures for the US.
A proposed new payments system independent of the dollar could strike hard at the currency's international hegemony. We may be embarking on a post-dollar era, meaning currencies other than the dollar will gain greater use in international trade settlements.
Payment institutions as part of the new payments system, if created, might be set up in European and Asian cities like Frankfurt, Paris and Shanghai.
1027 good info. Tks. If going to be interesting. Massive fund flows n volatility in US can happen if your observation comes into fruition. The US treasury bond market will go kaput n the economy will sink.
@ fuck the USD
Although it is not easy,it is not that hard either to convert the European-based SWIFT system to handle non-USD international payments. The main obstacle will be political---i.e. fighting the blowback, threats and bullying from the US govt for kicking the USD off international settlements mechanism. (As we know,their threats and bullying do often succeed).
US Dollar dominance has benefitted the average as well as the very wealthy American.The Fed prints money "secured" by Treasury debt as "collateral". Foreigners buy that debt. China and Japan buy the most. So hard working Chinese and Japanese (and others who buy US Treasuries) pay the PREMIUM which subsidises the US citizens enjoyment of liquidity and low interest rates, to finance their fat, lazy, decadent and living-beyond-their means lifestyles.
Because the US consumer has a big appetite for imports, the US dollars used to buy foreign goods has the effect of "exporting inflation" to the cuntries the US trades with.
As I've mentioned before, the dominance of the USD has ALWAYS been a sore point, so there are no new arguments for or against. The world carries on regardless....USD goes up (like now), people curse and swear because their currencies deflate and they have to pay more for USDs to trade...but thru all the ups and downs, the world goes on, business as usual.
However, there was no DJ Trump before. Every system needs a "tipping point" before the move to change becomes unstoppable. We are not there yet. It appears that we are getting closer with every insane international policy DJ Trump comes up with, but there is no "tipping point" in sight. Plenty of new editorial, cock-talk and opinion, but still no significant change.
The common rhetoric now is: "The USA is losing its dominance.. The point is even if the USA gave up 50% of its "dominance", it would still be a global superpower.
IMO, the "future currency" will be a mix of (probably) USD, Yuan, Euro, Yen, Pound sterling, Swiss Franc, maybe SDR, some Gold and the whole thing DIGITIZED to form a GLOBAL CRYPTOCURRENCY, which governments can TRACE.
When govt can TRACE....the only people doing money laundering will be themselves then. Think about that?
@ 1042
Yes, traceable currency brings many negative externalities. But that is the way the world is going: all governments want to be able to trace financial transactions. It is inevitable that one day they will succeed.
And it is also inevitable that the market will evolve alternatives.
"The only cure for high prices is high prices" In behavioural studies, too much of one thing eventually leads to the production and evolution of a "countering mechanism".
Matilah i will not bet against the USD but US 30 yr treasury bonds. USD are eating up emerging countries currencies abt every 10 yrs like right now. If Trump up another $200bln on China, US consumers n importers will finally see higher inflation. Decent n better risk-reward. Cheers but remember "durian bo pau chia."
@253
Hahaha, yeah exactly. But I'm way past trying to predict what irrational humans (aka The Markets) will do... sometimes they "confirm" the macro theory, and often...too often they don't, and just "do their own thing" lending truth to John Maynard Keynes famous words The market can stay irrational longer than you can stay solvent. π€£
As the world's worst "sure to lose money trader" who has killed two accounts already, I've painfully learnt that making money (not losing money) is more important than BEING RIGHT with one's theoretical predictions. Therefore, I'm not even concerned with my own opinions or predictions. At the end of the day, we put our money down... then see how right or wrong we are.
Markets are always RIGHT. The humans who play the markets...they are the ones who get it WRONG. ππ€
Fear, Greed...and of course HOPE!
I hate durians. But I would never buy if I cannot try first. Caveat Emptor, trust but VERIFY ππ
Post a Comment