America is walking on an old fashioned circus high wire tight rope with no net below while balancing a pole with Petrodollars and escalating gas prices on one end and a Hyperinflationary Depression on the other. Hillary Clinton is fraying the tight rope as Ben Bernanke is firing a circus canon with Zimbabwe trillion dollar notes. Obama announces Market Flash Crashes to the left of us and Credit Default Swap implosions on our right. On the floor below Romney, Santorum and Gingrich are driving a clown car around in circles.
Let me explain myself.
The US was on the Gold Exchange Standard until 1971. In 1973 Henry Kissinger maneuvered the world into the Petrodollar standard. After the Arab-Israeli war of 1973, there was an oil boycott or at least there was the appearance of one. Prices quadrupled. Geraldo Rivera flew in a helicopter off the coast to film the stacking of oil tankers he says were there waiting for prices to go up. No. They were waiting in line because American ports had a finite capacity to receive oil. American customs receipts revealed that we imported more oil imports during the oil boycott than we did the year before. The ultimate use of a currency is to pay taxes to the nation that issued that currency. The Petrodollar gives the world a second use for an otherwise worthless currency. If the dollar is no longer used to buy oil, then the excess supply of dollars will drive down the value of our currency. American wages will decline sharply. That is why bankers like the Goldman Sachs crew think they did Americans a favor in 2008 when they bought every barrel of oil 27 times before it reached the gas pumps thus running the price up from $30 to $147. High oil prices denominated in DOLLARS are about all that is keeping the American economy afloat.
The Iran crisis has two purposes. Its primary function is to keep the voters focused on the possibility of World War III starting tomorrow morning so the bankers can continue to steal tens of trillions of dollars and to laden the taxpayers of the world with Unpayable Debts. This would allow the bankers at some point in the very near future to buy up all the assets we have for pennies on the dollar with money they stole from us. This will reduce us to slavery which is their goal. The second purpose of all this war mongering hysteria is to double oil prices and keep the demand for dollars high so the dollar does not collapse.
Hillary Clinton gave a six month extension to Western Europe to stop importing Iranian oil. The extension is necessary because Europe is collapsing under the burden of Austerity cuts, higher taxes and nine dollar a gallon gasoline. Iran has been cut off from using bank transfers to sell their oil. They are no longer allowed to use the SWIFT system (Society for Worldwide Interbank Financial Telecommunications). Hillary threatened China, Indonesia, South Korea, South Africa, Indonesia, India, Japan, Pakistan, Malaysia, Turkey, Taiwan, the Philippines, Singapore and Sri Lanka because they are buying Iranian oil. She is clearly delusional if she thinks she can tell all those nations they have to stop buying oil from Iran.
South Africa is moving to allow its citizens to open bank accounts in Chinese yuan which will protect depositors against the rapidly decreasing value of the US dollar (though not against Market Flash Crashes and a Derivatives-Credit Default Swap Implosion.) On March 29th Brazil, Russia, India, China and South Africa, the BRICS nations, will be holding a meeting in New Delhi. China’s agenda is to stop using the dollar in international trade. The stock market, the bond market and all pensions plus American wages will go to zero value if these nations Hillary is threatening say, “Okay Hillary. We will stop using dollars and set up our own bank wire transfer system.”
That is why I said Hillary put us on a high wire tight rope with no net below while she is energetically fraying the rope. On one hand she is organizing war talk against Syria and Iran. This drives up the price of oil which gives the entire world a use for dollars other than to pay taxes to the IRS. But she is countering her work in behalf of the Petrodollar by telling Iran they cannot trade in dollars and the rest of the world they will have to buy Iranian oil in yuan, rupees and even gold.
The fly in the ointment is that while the rise in the price of oil does soak up the excess supply of dollars it does increase the price of gasoline as well as the cost of delivering all the goods we consume daily. John Williams of Shadow Stats told us that the real inflation rate was 11.6% before the recent increase in gas prices. The current real inflation rate is above 12% and rising as this last wave of inflation is passed through the supply chain. In 1980 Federal Reserve Chairman Paul Volcker had to raise interest rates because inflation had gotten out of hand. Mortgage rates went to 15.5%. The danger Volcker saw was the entire world would dump the dollar as an international reserve currency. More than half of all US dollars are used by foreigners. If they dumped them because they were losing money every month due to inflation and nobody sold oil in the US currency, all those dollars would have to be repatriated. You are talking about a doubling of prices overnight which means nationwide food riots, multiple race wars and the destruction of every city in America. As a reminder, I should point out that the transition to the Petrodollar standard and the 400% rise in the price of oil had doubled the inflation rate and put America on the brink of collapse in 1980.
Today we are facing a ramp up in inflation but we are starting from 11.6% so we do not have as far to go for Hyperinflation to destroy the economy as we did in 1980. Since America is printing an international reserve currency, I would define Hyperinflation as beginning at 25% because at that point nations all over the world will refuse to hold dollars.
There already is a Hyperinflation of currency which Ben Bernanke is using to bailout bankers in Europe and America. He created 30 trillion dollars from 2008 to the end of 2011. And he has created trillions more already in 2012. Included in that 30 trillion was 6.3 trillion Bernanke gave to European banks to buy back fraudulent mortgage backed securities to keep New York bankers out of jail.I think that it will be rapidly rising prices that will crash the dollar and all markets everywhere.
Some would say we could easily have another Flash Crash like we did on May 5, 2011 but that this time the market would continue its decline until an ounce of gold was higher than the DOW. which are currently at 1,700 and 13,000 in round numbers.
Some were were terrified that last week’s Greek bond auction would have triggered Credit Default Swap insurance. The Too Big To Jail American banks hold 227 trillion dollars in those liabilities which could wipe the US economy off the map on any day that even 1% of that amount is claimed. But I said, “Do Not Worry. Be Happy. Ben Bernanke will print another ten or twenty trillion dollars to make those Euro bonds to go away for now.”
I see the greatest danger coming from inflation. The value of an existing bond goes down as interest rates go up. The derivatives and CDS markets probably are valued notionally at 1.5 quadrillion dollars. Interest rates have creeped up despite a floodgate of Bernanke Bucks being created to fund the US deficit and keep interest rates down. A sudden rise in interest rates could trigger a loss of trillions of dollars in the bond and derivatives markets. That rise in interest rates will kill the world’s stock markets too. And the flight to safety will drive the price of gold and silver much higher.
I think I have explained myself. That opening paragraph tells you the absolute contempt I have for everyone who is running our economy for the benefit of a few. I have decided to repeat in closing something I have said before.
The Fundamental Fact of Your Existence as a modern man or woman is that the bankers of New York and London want to reduce you to Debt Slavery.
Accept that fact and move on to the solution.
That is their plan for you.
What is your plan for them?
Notes: The above quote is from this article.
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