1 reply to this topic

[nimblebear]

It's one thing to have a currency of a small country, like a Zimbabwe implode, or even a group of country's currencies go through a hyperinflation and then disappear.

It's entirely another when the world's reserve currency that's embedded in so many transactions, particularly that of the oil trade. Without oil, the world as we know it, basicallly collapses.

Without oil traded exclusively in the US dollar, otherwise known as the petro-dollar, far uglier consequences will emerge, and it's quite likely with all of the current complacency regarding markets in general here in the US, that the US dollars implosion will occur far faster than anyone anticipates.

I think you will find This to be an interesting commentary, because for one, it's the thinking of a billionaire, that's not unlikely to be much different than a number of the world's billionaires. And if you are said billionaire in US dollars, then you most pay attention to currencies, the US reserve currency status, more than nearly anything else.

The dollar may appear strong at present, but could it be because the demand is high in order to transact and use them to acquire other hard assets, well before the plummet actually begins, when then nobody in their right mind will want to be holding any at all ??? For instance, if I have all this electronic money in the bank, that we all know is not really there, and it's all I's and digital O's, and I then go ask the bank to give me some or all of it, so I can then buy a Mercedes, a home, another boat, some art, or even gold, that's when the demand for dollars can rise, if a whole lot of people are doing it, while there is QE and tons of printing going on in the background. If much of that printing is to prop banks, and create a false accounting sheet that makes it appear the bank to be liquid and have the right "capital" ratios, etc, then you really have to wonder how sustainable the recent 5 year recovery has been, or can continue to be.

Ipso facto, how many people are really spending their dollars now, drawing forward from the far future, when they are figuring that someday the jig is going to be up, the dollar way down, and thus creating for the past 5 years an illusion of US recovery and emerging prosperity ?

Do you really buy the American renaissance in energy, for shale gas and oil, or the re-shoring of manufacturing, when we have debts greater than ever, and China and Russia dictating many of the terms and events and situations now developing in the middle east ?


http://www.zerohedge...likely-get-ugly

[fluid]

very good article. I thought about this. the middle east seems to be about the petro dollar arrangement sorted back in the 1950's. If the dollar is no longer backed by a natural demand for oil, then it could be tragic, very tragic. The whole arrangement breaks down.