Oil & Gas
Priced in Gold?
Move seen as small step towards monetary alliance to bypass US dollar in the global monetary system
Russia’s central bank opened its first overseas office in Beijing on Thursday, marking a small step forward in forging a Beijing-Moscow alliance to bypass the US dollar in the global monetary system.
Financial regulators from the two countries agreed last May to issue home currency-denominated bonds in each other’s markets, a move that was widely viewed as intended to “dethrone” the US dollar.
Vladimir Shapovalov, a senior official at the Russian central bank, said the two central banks were drafting a memorandum of understanding to solve technical issues around China’s gold imports from Russia, and that details would be released soon.
DYI: Dividend Yield Investor has been “pounding
the table” Russia and possibly China will price oil and gas in gold. Both countries, if news releases are to be
believed, have been stock piling gold reserves at a feverish pace. Once this business – gold based - pragmatic
alliance is in place between Russia and China, just as the sun rises in the
east and sets in the west, international contracts, first in Central Europe
then the world oil and gas will be priced in GOLD!
The
driving force mentality behind this is NOT a renaissance for gold; it is simply
the easiest way for the Russians and the Chinese to shed the fiat global “funny
money” called the American Dollar. Most
Americans do not realize – readers of this blog know – our biggest export is
INFLATION! Countries that attempt to
move out from under the Dollar have been attacked by the U.S. or our
allies. This is exampled by Omar Gaddafi
of Libya,
who was moving at light speed, building up reserves of gold to have the Libyan
currency the Dinar, converted on a one for one basis! This would have the effect of displacing the
French Franc – a currency that remains trading in French ex-colonies – AND a
dagger into the side of the Euro plus making inroads into King U.S. Dollar. So….The French attacked with the full
blessings of the Americans. Hillary
Clinton who stated regarding Gaddafi, “We Came, We Saw, He Died” all backed up by
WikkiLeaks!
Will
the Russians and Chinese be successful?
The Chinese most likely will not be able to pull it off as they are
living in a MASSIVE DEBT BUBBLE of biblical proportions. The Russian’s on the other hand due to their
superior monetary policies and low debt environment is HIGHLY likely to be
successful. This is the major reason for
all of the Russian rhetoric – of course the politicians Republican or Democrat –
will not inform the American public when oil and gas is priced in gold
inflation or deflation will take off like a jack rabbit devaluing the Dollar and a severe decline
in our standard of living!
The
American Petro Dollar has been in effect since 1971. President Richard Nixon closed the last vestige
of the gold standard when the French President Charles de Gaulle demanded gold
(instead of T-Bonds) for America’s imbalance of trade with the U.S. Nixon not
wanting to deplete our gold reserves “slammed the gold window closed for convertibility
of the U.S. Dollar.” Nixon needed a
replacement of gold convertibility Henry Kissinger then Secretary of State
swung into action and the Petro Dollar was born.
Also
of interest Richard Nixon (Tricky Dick) created the Environmental Protection
Agency (EPA) knowing full well the days of America’s gold convertibility would
end thereby needing additional “Federal collateral” to prop up “Federal Dollars”. The EPA all under the guise of environmental
protection either Federalized, purchased, or controlled through regulations
vast American lands. Today the Federal
government is in control/ownership by various means around 25%+ of
the U.S. land mass.
How will this play out? Most likely we will first experience a
deflationary smash crushing stocks (55% to 70%) and junk bonds along with even
worse unemployment. The Federal Reserve
will purchase up bonds during the depression AND common stocks in a vain
attempt to prop up a failing system.
Once that fails the Federal Reserve with the President and Congressional
approval will digitally print money and make direct payments to Social
Security, then Medicare and eventually the general budget defeating deflation
with surging crushing inflation. Only
until the American public demands – and I mean DEMANDS sound money – will scenarios such as this be averted.
Updated Monthly
AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 3/1/17
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
DYI
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