On March 21, The Islamic Republic of Iran will cease using the U.S. dollar in all of its financial reporting. The decision to stop using the dollar as a reference has been in the works for some time but was expedited after the Trump administration decided to include Iran as one of the seven countries banned from entering the United States.
Iranian PressTV reported, “Valiollah Seif, the governor of the Central Bank of Iran, was quoted by domestic media as saying that Iran would either replace the US dollar with a new common foreign currency or use a basket of currencies in all official financial and foreign exchange reports.”
There is much we don’t know about how the Trump presidency will play out. Will the Wall get built? Who will pay for it? Will it have at least some fencing? Will repeal and replace happen at exactly the same time? Will Trump throw a ceremonial switch? Will there be a Trump National Golf Course in Sochi? It’s anyone’s guess. But of one thing we can be fairly certain. President Trump is very likely to preside over the largest expansion of Federal budget deficits in our history. Trump has built his companies with debt and I’m sure he thinks he can do the same with the country. His annual budget deficits are likely going to be huge. This development will make a greater impact on the investment landscape than most on Wall Street can imagine.
The “death of the dollar” will have to be rescheduled.
Sharply higher yields on Treasury securities and the prospect of more rate hikes by the Fed – in a world where other major central banks are still stewing innocent bystanders in the juices of NIRP, negative yields, and “punishment interest” – sent the hated dollar, whose death has been promised for a long time, soaring.
It soared against the euro. Or, seen from the other side, the euro plunged against the dollar, to $1.039, the lowest level since January 2003; down 35% from its peak of $1.60 during the Financial Crisis; down 10% from its 52-week high in March of $1.16; and down 2.7% from $1.068 yesterday before the Fed announcement.
H/t reader squodgy:
“Latest snippet from Clif High, very interesting, and it will be good to watch it develop.”
Continue to prepare for collapse (the greatest financial/economic collapse in world history).
Financial collapse > hyperinflation > civil war > directly followed by WW3 …
Apologies for the blurry video. FStop stuck. Used camera.
Pie is blended apples, Braeburn, Rosa, Yellow Delicious, Pippin, with a coconut oil crust.
Bonds turned in July
Then USA bonds took the largest 1 day move ever the day after Trump elected.
American Federal Reserve Note empire meltdown continues:
The unexpectedly sharp antagonism between Turkey and the west accelerated today, and one day after NATO preemptively reminded Turkey that it is still a NATO alliance member and advising Ankara that “Turkey’s NATO membership is not in question”, Turkey had some more choice words for its military allies. Cited by Reuters, Turkey foreign minister Mevlut Cavusoglu told Turkish’s NTV television on Thursday that the country “may seek other options outside NATO for defense industry cooperation, although its first option is always cooperation with its NATO allies.” Translation: if Russia (and/or China) gives us a better “defensive” offer, we just may take it.
WASHINGTON (Sputnik) — The US dollar has been overvalued by up to 20 percent, the International Monetary Fund (IMF) said in a report on Wednesday.
“At today’s levels of the real effective exchange rate, the current account deficit is expected to rise above 4 percent of GDP by 2020, pointing to the US dollar being overvalued by 10-20 percent,” the IMF stated.
For decades, the story of Saudi Arabia recycling petrodollars, i.e., funding the US deficit by buying US Treasuries with proceeds of its crude oil sales (mostly to the US), while the US sweetened the deal by providing the Saudis with military equipment and supplies, remained entirely in the conspiracy realm, with no confirmation or official statement from the US Treasury department.
Now, that particular “theory” becomes the latest fact, thanks to a fascinating story by Bloomberg which gives the background and details of secret meeting between then-US Treasury secretary William Simon and his deputy, Gerry Parsky, and members of the Saudi ruling elite, and lays out the history of how the petrodollar was born.
Here is the background:
Shocking. Astonishing. Jaw dropping.
There’s just no other way to describe how cheap South Africa is right now.
Between the worldwide decline in commodities prices, and a major crisis of confidence in the national government here, the local currency (South African rand) remains at the lowest level it’s been… ever.
And that’s made nearly EVERYTHING here dirt cheap if you’re spending foreign currency… especially US dollars.
It appears Russia is close to taking the next big step towards de-dollarization and killing the petro-dollar as Vladimir Putin’s “dream” of ruble-based pricing of its domestically-produced oil is on the verge of realization. SPIMEX (The St. Petersburg International Mercantile Exchange) is actively courting international oil traders to join its emerging futures market, which as Bloomberg reports, is designed “to create a system where Russian oil is priced and traded in a fair and straightforward way.”
Step-by-step Russia, China and other emerging economies are taking measures to reduce their dependence on the US dollar, and as SputnikNews detailed, F. William Engdahl warns – referring to Russia’s crude oil benchmark initiative – this move could deal a dramatic blow to the “petrodollar’s” dominance.
This article was written by Brandon Smith and originally published at his Alt-Market website.
Editor’s Comment: As Brandon Smith makes eloquent in this article, a global showdown is looming, and the long-standing alliance between the United States and Saudi Arabia is likely to be broken, as self-interest drives new alliances in the era of global SDR currencies, and the end of the dollar’s special status on the world market.
Oil prices have been deliberately skewed to a level that would disrupt entire nations, and test markets while a flood of resources is pulling out the safety net and things grind to a halt. As these events unfold in the near future, much of the ample corrupt between the Saudis and the secret government wing of the U.S. government is likely to surface… and there is much evil and misdeeds to draw from.
One More Casualty Of The 9/11 Farce – The Petrodollar
by Brandon Smith
It’s been about 15 years now since passenger airliners struck the World Trade Center towers on 9/11, and we are still suffering the consequences of that day, though perhaps not in the ways many Americans might believe.
It seems the end really is nigh for the U.S. dollar.
And the mudfight for global dominance and currency war couldn’t be more ugly or dramatic.
The Saudis are now openly threatening to take down the U.S. economy in the ongoing fallout over collapsing oil prices and tense geopolitical events involving the 9/11 cover-up. The New York Times reports:
Saudi Arabia has told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars’ worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks.
China has been working for years to establish global currency status, and will strengthen the yuan by backing it with gold in moves clearly designed to cripple the role of the dollar. Zero Hedge reports:
“…a moratorium on printing new high denomination notes would make the world a better place.”
– Larry Summers, Harvard Professor
… and the world would be a much better place without …
esterday we reported that the ECB has begun contemplating the death of the €500 EURO note, a fate which is now virtually assured for the one banknote which not only makes up 30% of the total European paper currency in circulation by value, but provides the best, most cost-efficient alternative (in terms of sheer bulk and storage costs) to Europe’s tax on money known as NIRP.
That also explains why Mario Draghi is so intent on eradicating it first, then the €200 bill, then the €100 bill, and so on.
EURUSD just broke to a 1.05 handle, its lowest since April. With EURUSD now down 9 big figures from Draghi’s mid-October jawboning, the US Dollar index (heavily-weighted to EUR) is soaring, reaching back above to its highest since March. Bearing in mind that Fed’s Fischer says that the worst of USD’s impact on the US economy is yet to come, we may have a problem.…
So many of the exact same patterns that we witnessed just before the stock market crash of 2008 are playing out once again right before our eyes. Most of the time, a stock market crash doesn’t just come out of nowhere. Normally there are specific leading indicators that we can look for that will tell us if major trouble is on the horizon. One of these leading indicators is the junk bond market. Right now, a closely watched high yield bond ETF known as JNK is sitting at 35.77. If it falls below 35, that will be a major red flag, and it will be the first time that it has done so since 2009. As you can see from this chart, JNK started crashing in June and July of 2008 – well before equities started crashing later that year. A crash in junk bonds almost always precedes a major crash in stocks, and so this is something that I am watching carefully.
And there is a reason why junk bonds are crashing. In 2015 we have seen the most corporate bond downgrades since the last financial crisis, and corporate debt defaults are absolutely skyrocketing. The following comes from a recent piece by Porter Stansberry…
There has been a litany of layoff announcements recently: Biogen said yesterday that it would axe 11% of its people. ESPN would lay off 4% of its people. Twitter a couple of days ago said it would slash its workforce by 8%. Microsoft and HP are currently very busy shedding tens of thousands of workers.
Caterpillar announced over 10,000 layoffs last month. Intuit kicked off a new round of layoffs this summer. Permanently troubled former highflyer Groupon is laying of 1,100 folks. Even startups. Zomato, based in India, is laying of 300 folks, many of them in the US. Flipagram laid off 20% of its workers. And on and on. Even Snapchat.