Failing banks, inflation,
soaring interest rates and the flight from the petrodollar could become a
disaster for ordinary Americans
By Phil Giraldi
April 19, 2023:
Information Clearing House-- "UNZ"
-- Watching a once great nation commit suicide is
not pretty. President Joe Biden does not seem to understand that his
role as elected leader of the United States is to take actions that
directly or indirectly benefit the folks who voted for him as well as
the other Americans who did not do so. That is how a constitutional
democracy is supposed to work. Instead, Biden and the gang of introverts
and neocon war criminals that the has surrounded himself with have done
everything that can to inflict fatal damage on the economy through rash
initiatives both overseas and at home. A spending spree to buy support
from the bizarre constituencies that make up the Democrat Party base
while also fighting an undeclared war in Europe have meant that nearly
two trillion dollars has been added to the national debt under Biden’s
rule, a debt that was already unsustainable at nearly $30 trillion,
larger than the United States’ gross national product. Plans to cancel
student loan debts will add hundreds of billions of dollars more to the
red ink.
And those
actions undertaken overseas, to include continuing to expand the war in
Ukraine against Russia, will do immeasurable more damage. Consider how
the Democratic Party has long had it in for Russian Federal President
Vladimir Putin, dating back to when Putin took power in 2000 and started
kicking out the western scallywags who were looting his country.
Subsequently, false intelligence and other innuendoes were contrived by
Hillary Clinton and her team in 2016 to implicate Donald Trump as a
Russian stooge who was secretly working for Putin. When that didn’t work
and Trump was elected, the Russians were accused by the media and
Democrats of willy-nilly interfering in US elections more generally
speaking, a much-exaggerated claim in contrast to the overwhelming
silence surrounding the real electoral and policy interference, which
has been coming from Israel and its fifth column inside the United
States, who, not coincidentally, are the chief proponents of the war
against Russia.
Placing a target on Vladimir
Putin’s back appears to have an unfortunate consequence which Biden has
yet to wake up to, namely the fact that the United States now has what
might be described as a Ponzi scheme faux economy which is very
vulnerable, particularly as much of the world has become disenchanted
with the US style of global leadership. Note for example
the recent state visit
by French President Emmanuel Macron to Beijing, where he embraced a
“global strategic partnership with China” to bring about a “multipolar”
world, freed of “blocs” that is not sheltering behind “Cold War
mentality.” Macron also criticized the “extraterritoriality of the US
dollar.”
And threats
made by the Bidens against both China and Russia have accomplished
little beyond drawing the two major political and military powers closer
together. Beijing and Moscow entered into a trade agreement in their own
currencies in 2014 and have openly taken steps to challenge US dominance
of international currency exchanges, creating instead a global
multipolar trading environment. Europe aside, many nations are now eager
to cut the tie that binds, which is the decades long American dominance
of international financial mechanisms and also the general use of
dollars to pay for oil and other energy supplies. The widespread use of
petrodollars enables the buffoonish Janet Yellen at the US Treasury and
the Federal Reserve banks to print unlimited unbacked fiat currency,
knowing that there will always be a market for it.
Which
brings us back to the Ukraine war, pursued “until we win” by Biden and
his somnolent Secretary of State Antony Blinken. One of the first moves
when Russia intervened in Ukraine was to block and eventually confiscate
Russia’s 300 billion dollars-worth of foreign reserves in banks in the
US and Europe. That sent a shock wave across currency markets all around
the world. Biden and Yellen had weaponized the US’s own national
currency, which hitherto had been an untouchable step in international
relations for nations that were not actually at war. Countries like
China and India with large economies then realized that the US Treasury
Department and the dominance of the dollar as an exchange currency had
now become a weapon of war and a serious threat to the economies of all
other nations.
As a consequence, the US Dollar is
right now being rejected by many nations as the world’s reserve
currency. Some nations all over the world have agreed to use the Chinese
Yuan and Indian Rupee for any-and-all international currency
transactions. Saudi Arabia continues to use the petrodollar but does not
demand it. Recently, Saudi Crown Prince Mohammed bin Salman and Chinese
President Xi Jinping agreed to permit the Saudis to sell oil to China in
Yuan. Saudi Arabia, the world’s largest oil exporter, is now allowing
multiple currencies to be used to purchase its oil, a major attack on
the primacy of the US dollar and it also has accepted Chinese mediation
to mend fences with the US and Israel’s
arch enemy Iran. And the Saudis have even more recently refused a Biden
Administration request that it start pumping more oil to reduce energy
costs, signaling that the shift is both political and economic in
nature. Japan, a major economy, has also
started purchasing oil and gas directly from Russia
against the US imposed energy embargo while Brazil, another major
economy, has agreed to use the Yuan in its increasing trade with China.
As fewer nations utilize the US dollar, America’s ability to export and
ignore its burgeoning domestic debt and inflation to other countries is
being diminished.
This might have a decisive impact
on the US currency as the drive to break with the petrodollar continues
to grow and could
produce something like a “perfect storm”
impacting on the US economy. It threatens to drastically lower the
standards of living of nearly all Americans within the next several
years as the dollar loses value and purchasing power. As the US economy
is heavily interconnected with many European economies, Europe is also
likely to be a victim of the coming disaster.
The good
news, of course, is that the United States will no longer be able to
afford its endless wars and international interventions. Lacking its
economic power, it will no longer be able to declare itself
“exceptional” and the enforcer of a “rules based international order.”
It would mean an ending of the funding of developments like the Ukraine
proxy war and the troops will have to come home from places like Syria
and Somalia. And it might even mark the ending of sending billions of
dollars annually to a wealthy Israel.
Ending
dollar supremacy would inevitably have an immediate impact on what
passes for US foreign policy, making it more difficult for Washington to
initiate and sustain Treasury Department sanctions on countries like
Iran and North Korea. It could also create economic turmoil for many
countries until the situation resolves itself by producing greater
volatility in currency markets worldwide. The Federal Reserve Bank will
no doubt respond to the unfolding crisis by acting as it always does by
raising interest rates to astronomical levels, thereby hurting most the
Americans who can least afford the shock therapy.
And it did not have to turn out
this way. It could have been avoided. If the US, which had no horse in
the race, had left Ukraine alone Vladimir Putin would not have become a
symbol of defiance against the “Rules Based International Order” and he
would not have worked with China to establish multipolarity in the way
the financial world operates. Instead, we have a situation where Europe
is being de-industrialized due to soaring energy prices and Washington’s
destruction of the Nord Stream pipelines while the US is potentially
confronting economic disaster as the dollar’s relevance to international
trade sinks. The ultimate irony is that Russia, and also the US/Israeli
arch enemy Iran, are by comparison doing quite well economically as they
sell their oil and gas to anyone in any currency. One has to conclude
that when US Treasury Secretary Janet Yellen recently made her
secret trip to Kiev to
promise the despicable Volodymyr Zelensky billions of taxpayer dollars
the United States might just have been better served if she had stayed
in Washington and made some minimal effort to address the mounting
economic problems confronting us here at home.
Philip M. Giraldi,
Ph.D., is Executive Director of the Council for the National Interest, a
501(c)3 tax deductible educational foundation (Federal ID Number
#52-1739023) that seeks a more interests-based U.S. foreign policy in
the Middle East. Website is
councilforthenationalinterest.org, address is P.O. Box 2157,
Purcellville VA 20134 and its email is inform@cnionline.org.
Views expressed in this article are
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reflect the opinions of Information Clearing House. in this article are
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