“Petro-Currencies” Replace Petro-Dollar

Petro-Dollars (courtesy Google Images)

Every so often, I propose a theory that’s new (to me, at least).  When I do, my initial presentation of that theory is often clumsy and incomplete.  This isn’t surprising.   If the theory offers a new insight, it takes time to learn how to explain it clearly.   However, over time, if the theory comes to seem valid, my presentations of that theory become more refined and easily understood. 

Today, I present another theory with language that’s at least clumsy (some might say, “half-baked”).   I don’t like to present texts that seem clumsy even to me, but I have to do so to not only to try explain the theory to my readers, but also to explain it to myself.  More, I must make the presentation because I know that some of my readers will make comments that will help me to better understand if the theory is probably true or probably false and thereby help me to make clearer presentations in the future.

In essence, I can’t seem to take this theory any further without help from my readers.

For today’s theory du jour, I propose that while the former global monetary system from A.D. 1971 to A.D. 2001 was based on the singular “Petro-Dollar,” in the past two years it’s been replaced by a new system based on several “petro-currencies”.  The fiat dollar is no longer the only currency that can purchase petroleum, but with the reemergence of the US as an oil exporting nation, the fiat dollar has gained some value as one of several “petro-currencies”. 

The emergence of the several “petro-currencies” might explain the last 20-month decline in the price of gold.

 

An Idea Whose Time Has Come

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Earlier this year, a virtually unknown Tunisian was so frustrated with his life of poverty and government tyranny, that he doused himself with gasoline, set fire to himself and died as an act of protest against the Tunisian government.  That suicide triggered the “Arab Spring,” a jump in the price of crude oil and and the fall of several Arab governments.

Mohammed Bouazizi’s suicidal protest should scare the hell out of politicians around the world.  His death illustrates how a single, seemingly insignificant event can trigger consequences that can’t possibly be anticipated or prevented.  We live in an age where people are under so much stress–where there is so much anger, fear and frustration is bottled up–that a society or entire region of the world that appears “orderly” can suddenly explode into confrontations and revolution.

The fundamental cause for this global instability, fear, frustration and anger might be described as the “love of money”.  Our world is not merely run by, it is largely owned by, a handful of super-rich psychopaths and legal fictions whose only love is for money.  Each of these crazy multi-billionaire individuals and corporations have more money than they could ever need and yet appear to be driven to the point of madness by the fact that they don’t personally hold all of the money.  If you really love money, it’s not enough to have some of it–you’ve ultimately got to have it all.

 

A Slow Moving Train Wreck

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Watching the US and global economies is somewhat like watching the collision of several, slow-moving trains.  The wreck is not happening suddenly, but the sheer mass and momentum involved and the number of “boxcars” that are slowly colliding, falling off the tracks, and piling up like logs is so fascinating—and horrific—that you can’t turn away.

• For example, we see evidence of these collisions in the recent Supreme Court ruling that will cause California to release over 30,000 convicts.  According to the NYTimes,

“The ruling on has also already inspired a fresh round of political recriminations, with some law enforcement officials and Republicans echoing the Supreme Court’s dissenters by saying the release will result in more violence as released inmates, unable to find jobs, return to their former way of life. . . . It could create real havoc.”

(Y’think?)

 

Are You an Investor or a Speculator?

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Forty years ago, scientists conducted an experiment on habitual gamblers.  A laboratory was constructed to look like a casino and included roulette tables, slot machines, and crap tables, etc., that looked just like the games in Las Vegas.  However, these lab-games were designed so that scientists could secretly control the rate of payout to the gamblers.

For example, as gamblers were playing, scientists could secretly increase the payouts on a slot machine and a gambler would win more frequently.  Alternatively, scientists could decrease the rate of payouts, and the gambler would lose more frequently.

The scientists observed a remarkable tendency: As the games were manipulated to increase the gamblers’ number of wins, the gamblers lost interest in the game and moved to another machine or another game.

 

American Inequality

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The gap between American rich and American poor is growing.

If the gap were growing because the rich are smarter and work harder, I wouldn’t object.  But the real reason for the success of most of the rich is that they buy and bribe congressman and presidents to pass “special interest legislation” that restricts competition, provides tax breaks for the rich, or compels the American people to buy whatever it is the rich have to sell.

In other words, the rich are getting richer primarily because 1) money is the “mothers milk” of politics; 2) the Congress is a pack of treasonous whores who are for sale to the highest bidder; 3) both major political parties–despite rhetoric to the contrary–are dedicated to providing their “legislative services” to the highest “bidders”; and 4) the rich are, by definition, almost always the highest bidders.  Ergo, the rich get “legally” richer so long as the last remaining bastion of true “free market competition” is on the floor of the Congress.

 

JP Morgan Silver Manipulation Explained

Image by Mark Sardella via Flickr

Animated video.

A bit of coarse language.

An unfortunate commercial at the very end.

But a very good, succinct analysis of allegations that JP Morgan’s manipulation of the silver commodity market may not only destroy JP Morgan Chase, but might even collapse the US and/or global economies.

Ohh, and the video includes some speculation that the price of silver might rise from its current $30/ounce to a $80/ounce.  Maybe more.

00:07:29

http://www.zerohedge.com/article/goldman-sack-blows-whistle-jp-morgue-silver-manipulation-scheme

See also a quote from John Maynard Keynes:

 

Currency Wars IV–an Intrinsic Madness

 

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[The following article first appeared in the October 9th International Forecaster.]

Recent headlines hint at the ongoing currency wars:

“Nations see dip of dollar as threat to economies . . . . U.S. pushes China on yuan.” The Washington Times

“Bundesbank warns of forex manipulation. The German Bundesbank weighed into the simmering currency dispute between the United States and China . . . warning against the harmful effects of exchange rate manipulation. . . . The US has alleged that China was purposefully undervaluing the yuan to gain a competitive advantage for its exports, a situation that may contribute to slow economic recovery in the United States.” TheLocal.de

Nations that 1) use fiat currencies and 2) are heavily committed to Global Free Trade, are engaged in “currency wars” over the relative value of their currencies. Because these fiat currencies have no absolute or intrinsic value, their values are all “relative”. These currencies are related much like the ends of a teeter-totter. For one end (1^st currency) to go up, the other end (2^nd currency) must go down.

You might suppose that every nation would want its currency to be more valuable so it could purchase more products. You’d be wrong. Today, most nations want their currency to be less valuable so they can produce and export more products.

 

What Can’t Be Paid . . . .

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[This article first appeared in the October 2nd edition of the International Forecaster.]

In A.D. 2008, speaking of the enormous US debt, I advanced the simple proposition that “What can’t be paid, won’t be paid.” I was so proud of myself for making that seemingly simple observation that I’ve been jabbering about it ever since. Today, I’ll present another illustration of that principle’s importance in order to illuminate the underlying madness on which our monetary system is based and the inevitable consequences of that madness.

 

$936/ounce Silver? $56,000/ounce Gold?

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Yes, the possibility that silver (currently $21/ounce) could rise in my lifetime to $936/ounce seems absurd.  Likewise, the possibility that gold (currently $1,293/ounce) might rise to $56,000 per ounce seems laughable.

But the linked video (below) makes a very credible case that–because of current manipulation of the gold and silver commodities markets–$936 silver is not merely conceivable, but nearly inevitable.  And gold, for the same reasons, could reach $56,000 per ounce.  When these increases might occur is unknown, but soon (within the next five years) is not impossible.