Fiat Dollars Could Soon See Significant Decline

04 Apr

[courtesy Google Images]

[courtesy Google Images]

After the dollar went completely off the gold standard in A.D. 1971, the Nixon administration cut a deal with Saudi Arabia whereby we’d guarantee Saudi national security so long as the Saudi’s guaranteed to sell their crude oil only for US dollars.  Soon after, OPEC entered into a similar treaty whereby they guaranteed to sell their crude oil for only US dollars.

Result?  Because you couldn’t purchase crude oil on the international market without first acquiring some US dollars, the fiat dollar–no longer backed by gold or silver and intrinsically worthless–became implicitly backed by crude oil.

Result?  “Petro-dollars”.

Result?  The “petro-dollar” was recognized as the World Reserve Currency.

For the past 40 years, the fiat dollar’s perceived value has been primarily based on its standing as World Reserve Currency, which, in turn, was largely based on the dollar’s standing as “petro-dollar“.

In A.D. 2000, Saddam Hussein threatened the petro-dollar’s hegemony by selling Iraqi crude for euros.  Our government retaliated by concocting some cock-and-bull story about Weapons of Mass Destruction, invaded Iraq in A.D. 2003, hanged Hussein and hung around for nearly nine years while we decimated Iraq.  Why?  To protect the petro-dollar.

But the Iraqi War was in vain in that, once we became ensnared in the Iraq War, other nations began to sell their crude oil for currencies other than the dollar.  Result?  The dollar’s status as petro-dollar began to slide as did the dollar’s perceived value.

Recently, the geniuses in the Obama administration precipitated the overthrow of the government of the Ukraine . . . which ultimately resulted in Russia annexing Crimea . . . which has caused Obama to threaten Russia with economic sanctions.

But there are a couple of problems with Obama’s threats.

1.  You can screw with most politicians because they are fundamentally whores.  If the money’s right, they’ll do anything you like.  But Vladimir Putin is no punk.  He sees himself as a hero, a warrior, a man destined to revive Russian power. He may even think he’s called by God.   As I read Putin, he’s not looking for trouble, but if trouble comes, he will not run.

You can’t buy such men.  You can’t tempt such men. If you want to mess with them, you’d better be ready to go the distance, because they will.  Putin will not put up with Obama’s crap.  Insofar as Obama has messed with Putin, Putin will make it his business to make Obama pay for his arrogance.  The Obama administration was stupid, criminally stupid, to help overthrow the previous government of Ukraine and thereby antagonize Putin.  Putin will impose a “cost” on the Obama administration.

2.   Russia is the world’s #1 oil-producing country. It provides 13% of the world’s total petroleum and 25% of western Europe’s natural gas.  Until recently, Russia accepted US dollars in payment for its crude oil and natural gas.

But, remember, the primary support for the illusion of fiat dollar value is its remaining stature as World Reserve Currency and petro-dollar.  So, if Obama sanctions Russia, Russia may counter by refusing to take more fiat dollars as payment for its petroleum products.  If Russia refuses to take dollars for petroleum, more nations will almost certainly follow suit.  As more nations boycott the use of fiat dollars for the purchase of petroleum products (and in global trade), the “petro-dollar” will become less “petro,” less in demand, and therefore of lower value.  Fiat dollars currently held in foreign countries as World Reserve Currency and as the one media needed to purchase crude oil will be viewed as no longer necessary and start to flow back into the US.  Result?  Increased domestic inflation.

If that flow of incoming dollars becomes a flood, we might see hyperinflation.  If we see hyperinflation, the dollar’s demise should follow in 12 to 24 months.

There are a series of dominoes in this analysis that might or might not topple.  But they could topple.  And the first domino is the Obama administration’s willingness to antagonize Russia. How many dominoes will, in fact, topple remains to be seen.

The number of dominoes and the speed at which they fall may depend more on how many third-party countries decide to follow or reject Russia’s lead, than on the overt acts of the US or Russia.  That means that, once started, this process could fall out of control.  If Russia intentionally or accidentally starts an international stampede to dump dollars, we just might see a dollar collapse that is sudden and soon.

But, even if the fiat dollars manages to survive for another five years, the fact that the Obama administration started tipping this line of dominoes is evidence that our government is either criminally stupid or intends to cause a significant drop in the dollar’s value.

Here’s video from Greg Hunter at  The first 5 minutes of this video lists some of the details of the Russian/US currency war and at least implies that we might see a significant fall in dollar value within the next few months.

video    00:14:41


Here’s a second video of a member of the Russian Duma (similar to our Congress) who’s proposing a bill to essentially outlaw dollars in Russia:

video    00:02:17


We’re at the beginning of a real currency war that just might determine the fate of the dollar.


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13 responses to “Fiat Dollars Could Soon See Significant Decline

  1. Gary Lee, [Russell], sui juris

    April 4, 2014 at 1:55 PM

    Nice analysis Alfred! Since the beginning of all this, Putin has felt (at least to me) like he is actually the ‘good’ guy in all this. His purported ‘invasion’ of Ukraine seemed to me to be an effort on his part to protect the Ukraine from a US invasion under some bullshit pretext, as with the other nations the US has invaded.

    I like the fact that he is not backing down on the Rothschild banksters/new US-led NAZI takeover of the planet. he could very well be the one guy who is putting out a serious effort to save the planet from the criminal banksters. Pretty hard not to like that.

    Thanks for the article. it puts some of the missing pieces in perspective as to the WHY of the current politics. Obummer and his stupid ‘administration’, besides creating the highest gun sales in history, are now the driving force behind their own destruction in international politics, baring all their secret agendas and ambitions for all to see.

    One can but hope that the international community can distinguish between ‘the United States’, the ego and money driven whores in DC, and true Americans who would never advocate the US’ current path, nor condone the invasion and slaughter of innocent countries.

    • Tony

      April 4, 2014 at 9:25 PM

      Gary Lee,

      Nazi takeover?

      “history is what the victors say it is.” Napolean

      The Nazi’s were enemies of the enemies you refer to and that is why history characterizes them as it does. Consider reading Hitler, Democrat by Leon DeGrelle.

  2. donmako

    April 4, 2014 at 2:36 PM

  3. peter

    April 4, 2014 at 2:43 PM

    Something to also consider, Mastercard and VISA stocks are rolling over now.I always beieved that the dollar collapse would be confirimed when these stocks started rolling over, it is a big negative for the stock indexes.

  4. moon

    April 4, 2014 at 2:50 PM

    Has anyone else noticed the picture on the newest hundred dollar note? Doesn’t Franklin appear to be seriously pissed?

    Consider all the blood, guts, lives, fortunes, humanity, and integrity sacrificed to perpetuate the USD myth.

    A continual source of amazement for me is what people choose to “believe”.

  5. peter

    April 4, 2014 at 2:56 PM

    Moon it,s all part of the spell casting techniques these creatures engage in. They got the G.D.P.’s { general dumb public] mind twisted into knots, not knowing what’s up or down. Everyone will soon know which way down is.

    • moon

      April 4, 2014 at 4:44 PM

      Yea, you can think of them that way. However, I’m one of them…they’re my brother, my sister, my family, my friends, my associates, my acquaintances…yep, I’m one of them…”big and dumb as a man can come” –thanks, Jim Croce, for the line.

  6. Toland

    April 4, 2014 at 3:32 PM

    In addition to disliking the US dollar, Putin favors the Chinese yuan.

    China and Russia already, and probably all the BIRCS in the near future, want the yuan to take up some, or most, of the US dollar’s role as world reserve currency.

    This means the US dollar’s loss will be the (gold-backed) Chinese yuan’s gain, to a significant extent.

    Therefore, go long the CNY/USD (or short the USD/CNY), directly or indirectly, as a hedge against the coming dollar depreciation.

  7. J.M.

    April 5, 2014 at 2:50 AM

    Oil WILL be the spark that ignites World War 3. Big deal. So what. There IS not anything any of “us” can do about it. There is not anything any MAN or group of MEN can do about it.

    • J.M.

      April 6, 2014 at 12:42 AM

      Well here is another thumb’s down for you, I have believed this since the year of 1975
      OIL WILL be the spark that ignites World War THREE. It will start OVER OIL. When I am wrong I stay wrong until someone shows me where & why I am wrong. It’s easy for me to change my wrong way of thinking about anything because I do WANT to be right. It’s that simple, but this is for me & not too many others.

  8. Peter

    April 7, 2014 at 9:30 AM

    It could be the U.S. may want orchestrate a middle east event to try to cut off oil supply to China and to compel them not dump their Treasury Bonds. It is a race the U.S. will loose due to the sunset of the petro-dollar exchange rate, already well along and the emergence of the gold-backed Chinese Yuan, also gold trade notes. The U.S. is entering the third (forth or fifth) world now.Can you see the billboards with flashing lights? If not please look harder. I see the billboards and quite frankly, it moves me!

  9. #AceNewsGroup

    April 10, 2014 at 3:52 PM

    Reblogged this on Ace News Services 2014 and commented:


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