Saturday, February 10, 2018

Goodbye Yellow Brick Road: World starts dumping worthless Federal Reserve Notes a/k/a the Petrodollar


Have America’s politicians gone insane or are they just that corrupt?  What kind of idiot would believe that when you are $20 trillion in debt (and that is just what is on the books) it is a good idea to pass a trillion dollars in tax cuts for the gamblers in America’s casino (Wall Street Banks) and pass another trillion dollars in war spending?  Like in Elton John’s song Goodbye Yellow Brick Road, “When are you gonna come down, When are you going to land” congress??  This cannot end well but it will end and it’s going to be ugly when it does.

America has been stuck in this revolving door world of endless borrowing to launch endless wars to keep the Federal Reserve Bank in business since George W. Bush was installed in office in 2000.  The philosopher George Santayana said:

Those who cannot learn from history are doomed to repeat it. ... Those who fail to learn from the mistakes of their predecessors are destined to repeat them.


Those words are so prescient today, this yellow brick road was laid by Richard Nixon in 1971.  From Follow the Money:

             Excerpt:

When historians write about the year 1944, it is often dominated with references to the tragedies and triumphs of World War II. And while 1944 was truly a pivotal year in one of history’s most devastating conflicts of all time, it was also a significant year for the international economic system. In July of that same year, the United Nations Monetary and Financial Conference (more commonly known as the Bretton Woods conference) was held in the Mount Washington hotel in Bretton Woods, New Hampshire…  During the three-week conference, two new international bodies were established.  These included:

·        The International Bank of Reconstruction and Development (IBRD, later known as the World Bank)

·        The International Monetary Fund

In addition, the delegates introduced the General Agreement on Tariffs and Trade (GATT, later known as the World Trade Organization, or WTO.)

More importantly, for our purposes here, another development that emerged from the conference was a new fixed exchange rate regime with the U.S. Dollar playing a central role. In essence, all global currencies were pegged to the U.S. Dollar.

At this point, an appropriate question to be asking yourself is: “Why would all of the nations be willing to allow the value of their currencies to be dependent upon the U.S. Dollar?”  The answer is quite simple.

The U.S. Dollar would be pegged at a fixed rate to gold. This made the U.S. dollar completely convertible into gold at a fixed rate of $35 per ounce within the global economic community. This international convertibility into gold allayed concerns about the fixed rate regime and created a sense of financial security among nations in pegging their currency’s value to the dollar.

After all, the Bretton Woods arrangement provided an escape hatch: if a particular nation no longer felt comfortable with the dollar, they could easily convert their dollars holdings into gold. This arrangement helped restore a much-needed stability in the financial system. But it also accomplished one other very important thing. The Bretton Woods agreement instantly created a strong global demand for U.S. dollars as the preferred medium of exchange.

The U.S. Dollar is issued and loaned to the United States government by the Federal Reserve.  Because our dollars are loaned to our government by the Federal Reserve, which is a private central banking cartel, the dollars must be paid back. And not only must the dollars be paid back to the Federal Reserve. They must be paid back with interest!  And who sets the interest rate targets on the loaned dollars? It’s the Federal Reserve, of course…

Meanwhile, an expensive and unpopular war in Vietnam funded by record deficit spending led some nations to question the economic underpinnings of America…  By 1971, as America’s trade deficits increased and its domestic spending soared, the perceived economic stability of Washington was being publicly challenged by many nations around the globe…

The United States had accumulated large amounts of new debt but did not have the money to pay for them. Making matters worse, U.S. gold reserves were at all-time lows as nation after nation began requesting gold in exchange for their dollar holdings.

One would have expected that the large and growing demand by foreign nations for gold instead of dollars would have been a strong indicator to the United States to get its fiscal house in order. Instead, America did exactly the opposite.

As Washington continued racking up enormous debts to fund its imperial pursuits and its over-consumption, foreign nations sped up their demand for more U.S. gold and fewer U.S. dollars. Washington was caught in its own trap and was required to supply real money (gold) in return for the inflows of their fake paper money (U.S. dollars)…

On August 15, 1971, under the leadership of President Richard M. Nixon, Washington chose to maintain its reckless consumption and debt patterns by detaching the U.S. Dollar from its convertibility into gold… It was in this year, 1971, that the U.S. dollar officially abandoned the gold standard and was declared a purely “fiat” currency.  In this new era of floating currencies, the U.S. Federal Reserve, America’s central bank, had finally freed itself from the constraint of a gold standard…

Two years later, in an effort to maintain global demand for U.S. dollars, another system was created called the petrodollar system. In 1973, a deal was struck between Saudi Arabia and the United States in which every barrel of oil purchased from the Saudis would be denominated in U.S. dollars. Under this new arrangement, any country that sought to purchase oil from Saudi Arabia would be required to first exchange their own national currency for U.S. dollars…

By 1975, all of the OPEC nations had agreed to price their own oil supplies exclusively in U.S. dollars in exchange for weapons and military protection…  This petrodollar system, or more simply known as an “oil for dollars” system, created an immediate artificial demand for U.S. dollars around the globe. And of course, as global oil demand increased, so did the demand for U.S. dollars.

As the U.S. dollar continued to lose purchasing power, several oil-producing countries began to question the wisdom of accepting increasingly worthless paper currency for their oil supplies. Today, several countries have attempted to move away, or already have moved away, from the petrodollar system. Examples include Iran, Syria, Venezuela, and North Korea… or the “axis of evil,” if you prefer.


The only winner in this fiat currency fiasco is the Federal Reserve Bank who is stuffing the coffers of America with trillions of dollars in worthless paper money at interest rates determined by the whims of the Federal Reserve Board.  When are you gonna come down, when are you gonna land America?  The unholy alliance with Saudi Arabia has been the source of all of the wars America has perpetrated.  Our petrodollar currency are backed by nothing more than magic beans.  The Federal Reserve Bank is the real terrorist here, a financial terrorist that needs to spread fear and destruction across the globe for profit. 

Russia is not a threat to the American people, North Korea is not a threat to the American people, Iran is not a threat to the American people, China is not a threat to the American people; they are a threat to the Federal Reserve Bank.    From HuffingtonPost:

Excerpt:

Non-Dollar Trading Is Killing the Petrodollar — And the Foundation of U.S.-Saudi Policy in the Middle East

BEIRUT — A profound transformation of the global monetary system is underway. It is being driven by a perfect storm: the need for Russia and Iran to escape Western sanctions, the low interest rate policy of the U.S. Federal Reserve to keep the American economy afloat and the increasing demand for Middle East oil by China.

The implications of this transformation are immense for U.S. policy in the Middle East which, for 50 years, has been founded on a partnership with Saudi Arabia.  As economic sanctions are increasingly part of the West’s arsenal, those non-Western countries that are the target — or potential target — of such sanctions are devising a counterpunch: non-dollar trading. It would, in effect, nullify the impact of sanctions. 

Whether in yuan or roubles, non-dollar trading — which enables countries to bypass U.S. claims to legal jurisdiction — will transform the prospects facing Iran and Syria, particularly in the field of energy reserves, and deeply affect Iraq which is situated between the two.  President Putin has said (in the context of reducing Russia’s economic vulnerabilities) that he views the dollar monopoly in energy trade as damaging to the Russian economy. Since hydrocarbon revenues form the most substantive part of Russia’s revenues, Putin’s desire to take action in this area is not surprising.

In the face of sanctions, Putin is seeking to reduce its economic dependence on the West. Russia has signed two “holy grail” gas contracts with China and is in negotiations to offer the latter sophisticated weaponry. It is also in the process of finalizing significant trade deals with India and Iran. All of this will be to the benefit of Iran, too: the Russians recently announced a deal to build several new nuclear power plants there…

But what may ultimately be seen to have proved fateful to the petrodollar system has been the policy of zero interest rate policy and “quantitative easing” pursued so unrestrainedly since 2008. Effectively, energy producers saw that the U.S. economy had now become so dependent on low interest rates that it could never again manage to keep oil prices steady relative to U.S. treasuries without blowing up the global financial system…The U.S. economy had now become too “financialized” to withstand anything more than a token interest rate hike…

Such a moment would seem ripe for Russia and Iran to begin a gradual challenge to Saudi’s leadership of the OPEC cartel and to the dollar-denominated energy system, if enough OPEC members and other producers are prepared to rebel. Iran has been lobbying hard in this direction.

In the longer term, Russia might take up Prince Bandar’s suggestion that Russia become a key determiner of oil prices and output…  And why should producers opt for roubles or yuan? Well, both China and Russia have recently been big buyers of physical gold. Russia’s present gold reserves would back 27 percent of the narrow rouble money supply. That is a high ratio — far in excess of any other major country, and also in excess of the U.S. Fed’s original stipulated gold coverage minimum.

Moreover, Russia is a large net exporter of goods and energy, notwithstanding sanctions. So Russia’s gold reserves, by implication, are likely to continue to grow, rather than decline.  In the longer term, holding roubles or yuan may allow producers to escape the damaging inflationary effects of a dollar system now dependent for its stability on low interest rates and monetary expansion.

It would be ironic, indeed, were the tensions with Russia inadvertently to become the driver of America finally losing its petrodollar card.

My, my, my.  Ironic indeed but that is the reality about to slam the American people in the face.  We have been bamboozled by politicians who owe no loyalty to the American people, they only have loyalty to those Wall Street speculators who fund their campaigns and write the laws they present in congress.  The trillions in tax cuts are meaningless, the trillions in spending are meaningless as they are based on worthless Federal Reserve Notes. Zero times a trillion is zero.  When are you going to come down America, when are you going to land?  From Veterans Today:

Excerpt:

CRYPTO LIBERTY: THE CALL HAS BEEN ISSUED, END CENTRAL BANKING NOW

“We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it.” — Congressman Louis T. McFadden in 1932

It’s no secret the central banking system (CBS) is a criminal, racketeering, counterfeiting, wealth stealing, money laundering system involved with long-term institutionalized larceny. The CBS permanently attached itself to the wealth of Americans in 1913 and, with just a few brief periods of instability, the parasite has persisted, almost without public notice, for more than 100 years…

The banking/currency and financial systems of today have been created by small groups of people and foisted on the public at large by means of capturing governments and purchasing the Law.  The current system of ‘money’ (currency) is created, copyrighted, and maintained by a private cartel of generational bankers, which use the system to enrich their own wealth exponentially.

The monetary system as it exists today is based on a scam, a slowly evolving, degradation of the value of currency which simultaneously and surreptitiously transfer the users wealth to the usurer – banking system. This happens in direct proportion to the ‘spiral of debt’ required to maintain the system.

The trick is every currency unit (dollar) which comes into the system is “borrowed,” resulting in an interest payment being required for as long as the dollar remains in the system. For every dollar borrowed, more dollars must be ‘borrowed’ to provide the money demanded to payback the principle AND the interest.

Eventually, over time as the money supply expands, the interest required to pay the rent on ‘borrowed’ money becomes exponentially larger and larger, leading inevitably to the collapse of the currencies buying power – the Crackup Boom!  While the system is in operation, larger and larger amounts of the currency are paid to the bankers for simply creating money (with almost no effort) for ‘loaning’, the so-called ‘loan capital…’
Central banking is an advanced stage of parasitism, a cancer on civilization, which perverts and debases those it enriches, enabling the most evil to rise to prominence as good people are forced out or leave… 

In our world today, Central banking is responsible for ALL war, and for most of the suffering and misery of an ever increasing number of people...  The time is now to END the reign of terror of central banking and the wealthy-by-theft class of people this system enriches…

Declare all Federal Reserve Notes void. Repudiate all national dollar debt, exchange void dollars held by America citizens for either Greenback vouchers or Cryptocurrency at some well thought out rate of exchange… 

People holding mortgages and other debt products of Federal Reserve Banks would be given full title to any property held as Mortgage Collateral or forgiven all collateral free loans. Formerly licensed Federal Reserve participatory banks should lose all claim to properties under collateral agreements...

All military bases in all nations around the world should be closed, all materials and men and women brought home to a growing jobs market absorbing these men and women as new manufacturing opportunities demanded workers.  Finally, it is necessary to place high tariffs on products that can be manufactured in America. Interest free loans could be made to those building and restoring American manufacturing, workers to be paid in the new currency.

I know Jack about crypto currencies but if that is what it takes to liberate America from the Federal Reserve Bank gulag, I’m all for it.  President Bill Clinton came close to liberating America from the Federal Reserve Bank when he balanced the budget.  When he came into office he vetoed congress’ bill calling for massive tax breaks for the rich.  In return congress shut down the government, not a mamby pamby shutdown like happens today but a real shut down. 

Lights out, doors locked, everyone go home.  The government was shut down for a full month and Clinton did not back off.  He raised taxes on the rich, reformed Welfare as we knew it, busted up the Ma Bell monopoly and created an environment where 22 million good paying jobs were competing for American workers.  Average Americans made money off the well-regulated stock market and were able to retire in their 50’s.  The elderly enjoyed the highest standard of living in American history living off the interest on their investments.  For that Clinton was impeached.

All of that was undone when George W. Bush was installed as President by a corrupt two-party system in collusion with the corrupt U.S. Supreme Court.

Now things have come full circle.  The world has been preparing for the day that the Federal Reserve Bank’s fiat currency would implode.  China and Russia as part of the BRICS coalition are now ready to dump the petrodollar.   From Geopolitics:

Excerpt:

Global Reset: China Officially Starts the Dumping of the Petrodollar

On March 26, the petrodollar will begin its funeral march to oblivion as the Shanghai International Energy Exchange allows any Chinese and foreign traders to trade oil in local currencies other than the dollar. This is very significant considering that China is the world’s largest oil consumer as of last year.

A statement from the Shanghai International Energy Exchange says,

“Approved by the China Securities Regulatory Commission (“the CSRC”), the Shanghai International Energy Exchange Co., Ltd., or INE, is an international exchange that is jointly initiated and established by relevant entities including the Shanghai Futures Exchange, and open to global futures participants. As a self-regulated entity, INE discharges its duties pursuant to the Company Law, the Regulations on the Administration of Futures Trading and relevant rules and regulations prescribed by the CSRC.

Registered in the China (Shanghai) Pilot Free Trade Zone on November 6th, 2013, INE operates the listing, clearing and delivery of energy derivatives including crude oil, natural gas, petrochemicals, etc., formulates business rules, implements self-regulation, publishes market information, and provides technology, venue and facility services.

Based on the principles of “openness, fairness and impartiality”, INE is devoted to establishing a global trading platform for energy derivatives that is “internationalized, market-oriented, rules by law and professionalized” to objectively reflect the energy supply-demand conditions, provide a tool in price discovery, risk management and asset management for energy producers, distributors, consumers and investors, so as to facilitate the optimal allocation of energy resources and promote the economic development.”

Superimposing this in the context of what China has been doing in the South China Sea, Latin America and in the Middle East, this means that any deliberate disruption of the market by way of instigated conflict, or mere speculative attacks against the INE, will never be allowed…


China, the world’s biggest oil buyer, is opening a domestic market to trade futures contracts. It’s been planning one for years, only to encounter delays. The Shanghai International Energy Exchange, a unit of Shanghai Futures Exchange, will be known by the acronym INE and will allow Chinese buyers to lock in oil prices and pay in local currency.

Also, foreign traders will be allowed to invest — a first for China’s commodities markets — because the exchange is registered in Shanghai’s free trade zone. There are implications for the U.S. dollar’s well-established role as the global currency of the oil market…

Futures trading would wrest some control over pricing from the main international benchmarks, which are based on dollars. Denominating oil contracts in yuan would promote the use of China’s currency in global trade, one of the country’s key long-term goals…  Another factor that would sidetrack the Deep State petrodollar is the breathtaking and massive nuclear power plant constructions inside China, and soon in other parts of Eurasia.

Meanwhile, the White House has just announced that more jobs are coming due to an increased spending for the military industrial complex.   Trump has just signed the spending bill to avert a complete corporate government shutdown, which includes the budget for the arms and war manufacturers.

Hmmm, is there a method to the madness of Donald Trump?  Is Trump allowing congress to engorge on Federal Reserve Notes to the tune of trillions of dollars with the plan to stick the Central Bank with trillions of unrecoverable Federal Reserve Notes?  Will Trump lead America to the promised land of controlling its own currency? “When are you gonna come down, When are you going to land” America?

“So goodbye yellow brick road, Where the dogs of society howl…  Oh I've finally decided my future lies Beyond the yellow brick road”


By Patricia Baeten


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