The Almighty Dollar. 6 sides of the dice, 6 roads to Hell, 6 nails in the Coffin. 666 & it is TOAST.
August 07, 2022
We are heading for the double whammy of a political crisis and financial collapse.
Though the fallout of this thundering disaster is catastrophic, it does yield a silver lining.
The World became much simpler and easier to analyze thanks to NATO shooting itself in the foot.
Years ago, numerous scenarios simultaneously existed within the realm of possibilities.
Here's a summary of the pluralism mentioned above:
1. The USA is in the top dog position. But Falling Fiercely.
2. China is positioning behind the scenes.
3. Russia is working to regain its glory days.
4. Terror cells like Al Qaeda and ISIS are in remission.
5. North Korea issues, et al.
But now it's basically two teams. Team West and Team East. If this were the Superbowl I would handicap this game as Team East (BRICS) being a 21-point or three-touchdown favorite. Moreover, I would label this match the most lopsided game in human history, and here is why.
This article outlines a case for gold and silver related to geo-political forces. Forces have been percolating in the background for the past 52 years. Beginning with the decoupling of gold from the almighty US dollar.
The Mother of all Shockers
Tricky Dick Nixon closed the gold window in 1971. The intent was to fund wars and begin a campaign of massive deficit spending. The only thing standing in the way at the time was insufficient gold reserves. Shutting off the convertibility of gold for dollars allowed the US government to spend money it did not have.
Our Foreign policy was vulnerable because allies like France had warned the World that the US had the exorbitant privilege of being able to print to infinity.
Kissinger then meets with the Saudi Royal Family with a proposal, "we're going to sell you military equipment and defend the Saudi kingdom." In return for that, you will denominate oil sales in US dollars globally. This launches the dollar as the World's exchange currency.
Going forward, two premises set up our bullish case for gold and silver.
Premise A - The dollar wanes as the global reserve currency.
Premise B - The Fed can't get too tough on inflation because they need it; it's their only remaining tool. (Aside- there will be times you will hear the Fed act tough and "hawkish," but this is just for theatre.)
Road to De-dollarization.
The World is screaming, "We want a new Bretton Woods."
Below I have listed milestones that have been major shockers to US dollar dominance. Then when you put them all together you see brick by brick how BRICS has now toppled the US dollar. The dollar and its apologists just have not realized it yet.
Impact #1 in 2017, Germany sets off chain reaction regarding gold repatriation. Crickets from US Domestic Media
The Truth About Bundesbank Repatriation of Gold From U.S.
– Bundesbank has completed a transfer of gold worth €24B from France and U.S. – Germany has completed domestic gold storage plan 3 years ahead of schedule – In the €7.7 million plan, 54,000 gold bars were shipped and audited – In 2012 German court called for inspection of Germany’s foreign gold holdings – Decision to repatriate from Paris and New York was ‘to build trust and confidence domestically’ – 1,236t or 37% of German holdings remain in New York Fed facility – Bundesbank wants to hold gold bullion – U.S. government declines to audit gold reserves … doesn’t want world to realise gold’s importance in the global monetary system
This sets off a contagious reaction. The following banks begin repatriating gold.
1. Bank of Austria
2. Bank of Turkey
3. Bank of Hungary
4. Bank of Poland
5. Dutch National Bank
6. Bank of Austria
A remarkable series of events because all these banks had been net sellers of gold for the previous decade and accumulated more gold than they did in the sixty years combined, so they're repatriating their gold from the Bank of England and the New York Fed.
They're on a gold buying frenzy and accumulating gold more so than in the previous sixty years combined, and then the following year, 2019, they doubled that up a hundred percent within a few months of those purchases.
Impact # 2, March 31st, 2019. Crickets from US Domestic Media.
The Bank of International Settlements classifies gold as a "Tier One" Asset. (Only Gold and US dollar are considered Tier One)
Impact #3, The Silk Road Project, Crickets from US Domestic Media.
The Belt and Road project includes 75% of the World, and guess who is left outside looking in? The answer is UNCLE SAM
China has been busy financing and orchestrating connecting Asia, Africa, and Europe. They have taken a page out of the IMF playbook using "debt trap" financing.
China has faced criticism for its lending practices to poorer countries, accused of leaving them struggling to repay debts and therefore vulnerable to pressure from Beijing. Perhaps this criticism is warranted but who cares? China had the guts to put up the bucks and knew this would be a powerful magnet to attract allies in their fight against Team West.
Beijing says it has signed cooperation documents with 149 countries and 32 international organizations while taking on 3,000 projects.
US Secretary of State Antony Blinken has accused China of creating a debt trap through its Belt and Road Initiative.
China has worked with almost 150 countries and spent US$1 trillion as part of Beijing's Belt and Road Initiative to open cross-border trade routes.
This is by far the largest infrastructure project in human history; it's connecting 75% of the World's population and 50% of global GDP before industrialization. Moreover, it connects these countries digitally by bridges, roads, railways, and maritime channels.
So when we think about the need for silver, 75% of the human population will need to be connected digitally. This is huge for silver and equally significant for de-dollarization when you realize it's 75% of the global population.
And it's all settling on the new Chinese digital yuan. These roads, bridges and maritime channels will not be patrolled by anything other than military and commerce. This makes the Panama Canal project appear measly in scope and strategy.
And the United States is not part of it.
USA (or NATO as I like to call them) has a fragile team. NATO being the US, Canada, UK, France, Germany, Australia, Japan, and S. Korea.
Team BRICS is now Brazil, India, Iran, China, South Africa, Saudi Arabia, and Egypt. Later, I will indicate how other "fence-sitting" nations join BRICS instead of NATO.
Powerful nations such as Venezuela, Mexico, Chile, Argentina, UAE, Turkey, Hungary are fleeing NATO giving team BRICS massive momentum.
This makes perfect sense if you think about how US foreign policy operates. US foreign policy forces emerging nations to use the dollar by coercion. Exploited countries look down the barrel of Uncle Sam's gigantic gun.
In the past, regimes that tried to transact oil outside the US dollar were bombed to smithereens. Libya was glassed, and Iraq was "shocked and awed."
Hussein was hanged, and Muammar Gaddafi was executed.
So when you rule by coercion, the exploited nations have been waiting to see a daylight opening; an opportunity to abandon the dollar and BRICS reserve currency is this daylight. In other words, China and Russia have not had to spend money or time recruiting partners. Instead, nations are lining up singing "Ding Dong the Wicked Witch is Dead." With this metaphor, the wicked witch being the US government and their US dollar currency.
Impact #4, September 1, 2021. Saudi signs up for Russian military protection. Crickets from US Domestic Media.
The Saudi Kingdom signs up for protection from Russia. The linchpin of the dollar hegemony is the protection Kissinger protection arrangement with the Saudi kingdom. The day we left Afghanistan with our tales between our legs was the most embarrassing and blunderous decision.
Let's examine what went on in Afghanistan. In short, the US spent over 3 trillion dollars (5 times the price of Vietnam) and about 20 years replacing the Taliban with the Taliban.
If you go back and research august 24th, 2021, you will find reports that Saudi Arabia signed a military cooperation agreement with Russia.
Impact #5, Nigeria signs up for Russian military protection. Crickets from US Domestic Media
Nigeria signs up for military protection from Russia. Nigeria is another massive OPEC-producing country, so now you have Russia protecting not only Saudi Arabia but another gigantic cog in the OPEC machinery. The same week Russia announced all nuclear-powered submarines contain hypersonic ICBM missiles.
This is Russias way of saying don't mess with us, don't even think of messing with us the way you did Saddam Hussein and Muammar Gaddafi (both of who wanted to sell their oil for anything other than US dollars.)
Things are now lined up for anyone to investigate. You can connect all the dots.
● The massive consolidation of trade routes favoring BRICS via the Belt
and Road project.
● All of this strategically superseded the US dollar.
● Gold reclassified on par with the dollar as the World's only other Tier
One asset.
● US Petro dollar is diminishing exponentially.
NOW IMPACT #6. Sanctioning Russia.
US Media starts virtue signaling over special operation in Ukraine. This sets off slew of false reporting like inflation is Putin's fault. US Congressional members approve over 70 billion in "military aid." Unusual Whales records US Congressional stock trades after members of Congress receive classified intelligence briefings.
THIS IS INSIDER TRADING.
The US sanctions Russia over the situation in Ukraine. This serves to push up unit pricing for Russia's core competencies such as oil, gas, coal, silver, gold, aluminum, nickel, wheat, etc
Sanctions were the final straw to bring all the forces mentioned above together. China and Russia relations were the wildcards, but the sanctions pushed Russia into China's outstretched arms.
Look how this all plays out to favor The East over The West.
Russia and China are conducting trades in energy in the Chinese digital yuan which is immediately convertible into gold on the Shanghai gold exchange.
Also, when Russia, Iran or Nigeria sells oil, they have agreed to sell their oil to China for a Yuan-denominated bond, all convertible into gold via the Shanghai gold exchange. This is how they all sidestep sanctions.
Also, trade lanes are favoring The East.
South to North corridor
Now there is also a safe passage from India to Russia past Iran. These are very strategic trade routes. Everyone else not part of BRICS has to go around the strategic and contentious strait of Hormuz.
India emerges victorious with domestic trades settled in rupee for imports, and exports are also not resolved in the toxic dollar. All these nations have been horrified that the US has exported their inflation. Meanwhile they have watched QE surrounding the Great Financial Crisis of 2008. So they don't want any part of the US dollar's orbit.
Below look at these powerful nations on the fence that want to be part of the winning BRICS alliance having witnessed what it is doing for Russia (the strongest currency in the World.) China (the captain of Belt and Road and the leading manufacturer in the World.) India (the regional leader in education, consumer markets, and technology. They are also the second most populated country in the World)
● Saudi Arabia joining BRICS
● Egypt joining BRICS
● Sudan joining BRICS
● Venezuela joining BRICS
● Turkey joining BRICS
● and 50 others. Dollar hegemony is OVER
Getting back to gold.
Earlier I wrote how all the nations like Germany, Austria, Hungary, Poland, Holland, Turkey and more had repatriated their gold. Then I wrote how BRICS is trading oil for Chinese Yuan and how this is convertible to gold.
They are trading outside of the Euro and the Dollar. They are all using gold as it is intended to be used. Gold is fungible. Gold, moreover removes the uncertainty of worrying about another country's legitimacy or having to trust an unstable trading partner or some unknown black swan.
Gold is the only asset that does not become someone else's counterparty risk.
Here is the kicker. 75% of the world have a plan for 5 things:
1. How to ditch the dollar
2. How to trade with each other
3. How to use gold in these trades
4. How to secure their energy future
5. How to stop buying US bonds.
Why would any nation ever buy bonds again?
The operating thought would be whether the USA will freeze our assets. Every country on planet earth has had to own dollars to buy oil for the last 50 years. Remember gold has been reclassified as a Tier One asset.
Nail in the coffin for US, NATO & Europe.
Who are the most significant gold-producing countries in the World?
Answer is: Russia, China, South Africa, Sudan, Mexico, Peru, et al. (all BRICS)
Who has been accumulating the most gold? (all BRICS)
Who has been using gold as it is intended to be used? (all BRICS)
Which Central Banks have not been accumulating gold? (The FED and ECB)
Which Exchanges suppress the price of gold? (COMEX and LBMA)
Which Exchanges promote gold as it is intended to be used? (Shanghai Gold Exchange)
What happens when every nation on the planet starts to dump dollars?
Why do they dump dollars? Because they don't need to buy oil with it anymore.
Previously they've had to hold it as the foundation of their currency, but now they can dump it like a hot potato.
If everyone dumps dollars then the dollar comes home to roost. This primes our inflationary landscape, kicking into inflationary overdrive (hyperinflation.) Team East has a two prong attack. The positive component is using cooperation to find win/win alliances between trading nations.
The negative component is defensive but just as binding. They are banning together to
face their common foe (The West.)
The East (or BRICS) have reinforced its position and can grow together. But on the other hand, The West will most likely see its four pillars of wealth deteriorate.
1. The dollar.
2. The equity market.
3. The bond market.
4. Dependent market sectors propped up by US banking such as real
estate and commercial activity.
CLOSING ARGUMENT
Gold and silver prevail in such painful times.
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