But it needs a re-socialengineering of american society.
The petrodollar is one pillar of the international reserve currency. The other is the total international debt denominated (serviced) in dollar. $305 trillions according to : https://www.iif.com/Research/Capital-Flows-and-Debt/Global-Debt-Monitor . Servicing this debt creates demand for the US dollar.
The BRICs are creating their separate financial system hence the dedollarisation trend. Jay Powell allluded to the possibility of 2/multiple international reserve currencies.
So we are likely entering the events for a pre-Bretton Woods II style meeting until then the FED can still buy time.
Perfect timing on the Chinese end after the Taiwan fiasco.
My guess is this is a response by the Saudis to the Dollar inflation snafu, trust in the us to protect Saudi Arabia, and diversify / protect from US strings / influence / power / ability to sanction.
The Western sanctions against Russia are partially driving this. Saudis know they could be next…
In our rebuilding of our Constitutional Republic....this is necessary. Nixon & KISSINGER took the US off the gold-standing (backing of our currency with gold...(so they could overspend) Kissinger made a deal with the Saudi's...called the "Petro-dollar." Saudi agreed to ONLY sell their oil to any country with US currency...Kissinger guaranteed to militarily protect Saudi's. Every drop sold...even to VaChyna..HAD to be purchased with "dollars" .EXPANSION World-Wide of our Nation's money.
It is UNPRECEDENTED. First time since the 1970's that the Saudi's are bailing.... under Byedone-ville.
In the early 1900's...Pres. Woodrow Wilson allowed a private group of Bankers to form the "Federal" Reserve. N0 GOV. NOTHING....Private banks of the time, which btw Taxpayers pay 6% interest on every dollar we allow this bank-cartel ...6% for the Big-bank...for us to use supposedly our own currency. (That means there's Interest debt..that is backing our current currency.
Their ponzi-scheme is coming to an end historically...It really crashed in 2008-2009...Gov/Fed has been artificially keeping it going, using every accting gimmick known to man. "We've" been bankrupt for decades!
Our current economy is gonna go belly-up already.....so the evil-ones plans all along is they were going to "secretly" re-boot the economy.....
but God Bless the internet....Patriots started waking up and were beginning to network with each other....Patriots started pushing back......(they thought they were going to do this secretly and We the People would never know) (Davos crowd) has been preparing to take away and get CONTROL of our Nation...even if they had to start multiple wars or whatever next "big thing" they'd created for DISTRACTION. BTW....I mention Davos cause Klaus-the-nazi mentored under Kissinger....then went power-hungry...but..that's okay....because....
Patriots from every walk-of-life, education, financial status, base of expertise, skill-sets etc....have been awakening..and networking....and slowly but steadily....and THAT's how we got TRUMP.
Patriots know that the current "Fed Reserve Banking System" is out of juice. And we've been planning to take back OUR CONSTITUTION & Bill of Rights...and Rule of Law that BELONGS to We The People.
The evil ones would love to get Patriots out in the streets to "fight" with their paid thugs...DON'T TAKE THE BAIT. WE follow the Rule of Law.....until all possible remedies have been exhausted.....
So the battle at the moment is....who...which side...good or evil...takes control to rebuild (Patriots) or be slaves to the evil ones.......45 was willing to put his Life, Liberty, and his fortune on the line....So is Mike Lindell...and a few other gazillions who shall remain nameless....to boost this Liberty movement....
and even this platform is a sample of a MAGA-economy being built...to replace and crashing "evil-ones-economy" we all grew up in.
Don't get mad....get BUSY. .....We are all here at this point in time for a Reason... At the bare minimum.....read the Constitution and the Declaration of Independence....KNOW YOUR God-given Rights...Know that the Constitution...is a RESTRICTION on what a Federal Gov't can do....and Congress...
pfhht!....Most of what they do up there is NOT one of NINETEEN (19) things they are ALLOWED to do up there....
I'm not so sure. What Dissonant1 is pointing out above is all the current debt is already fixed at whatever rate it was issued. Kind of like when you finance your home with a fixed 30 year loan. If the rates go up, you are still paying on the original rate and it's only new debt that is issued at the more costly/higher rate that's going to be a problem.
Seems like a good way for the Fed to make Congress's cost of funding their shenanigans hurt more. (as if they even cared)
Seems an awful lot like trying to put the genie back in the bottle. In the dark. With your hands tied. While trapped on a runaway train speeding towards a canyon where the bridge is out. Ok, yeh, I got it, no matter how things go down, we are screwed.
As Putin shifted to sell Ural Crude, delivered through Odessa, in rubles, at a $30 discount to Brent (Spread is back to near war risks now, not $30), the re-emergence of global competition for commodity delivery + currency risk for the first time since Smoot-Hawley has caught many off guard, particularly those gaming the US$ financing schemes for said commodities in the Contango trade, for instance. It no longer works as the risk from delivery fails gets real. This competiton is extremely healthy for world trade and the liberty spread by freer markets benefits everyone.
I like Mark am not an economist but in simple terms the argument being made here is that 1) there is a lag between rates raising and the impact of such on servicing government debt, since higher rates only apply to new debt; and 2) In an inflationary environment, nominal rates of GDP growth and tax revenue will be able to compensate for the loss of real GDP growth and real tax revenue inherent in a recession. It sounds sort of like sticking steel needles in your eyeballs to make you forget about that leg you just broke... and then deciding which injury needs to be treated first... but there you go.
"The way out of this situation for the US is to raise the cost of capital, which the Fed is doing through raising interest rates and force fiscal discipline on Congress by curbing their ability to run deficits while simultaneously lowering taxes at all levels especially on small businesses and wealth preservation. "
The bad thing as Luongo notes is that Congress can still pass outrageous unneeded spending bills and thereby make the Fed's job of curtailing inflation that much harder. No fiscal discipline is statutorily enforced like it is with many states. Now of course Luongo does not think the Fed raising rates is about taming inflation, anyway. If he is right, the notion of them raising rates high enough to make any real difference to overall inflation on the demand side is moot from their point of view anyway.
If the GOP takes back the House of Reps in November, it can seriously haul in the overspending. But of course they won't, because they are complicit too.
I ask myself the same question every day. What can we do to stop the descent into lawlessness and tyranny? After the events of the last week, the quaint notion that the “rule of law” has any sway with those in charge is wishful thinking. Mark Twain once made the observation that physically brave men and women could be had by the cargo, but morally brave individuals who would stand up to evil, are in short supply.
It becomes easier with each passing day to see how the Nazis were able rise to and maintain their control over Germany. I guess we can also begin to appreciate what it must have meant to face the reality of going to war with England.
Pledging our “lives, our fortunes and our sacred honor”, doesn’t seem to carry as much sway as it once did.
I fear that we will end with a whimper and not with a bang.
I have to agree, sadly. I served in the military during a period when I pretty much assumed that we were the good guys with the better motives, but over the last few years I have reluctantly come to the conclusion that I was being played. Those of us who believed in “truth, justice and the American way” have been confronted with the Covid fiasco, an election that definitely does not pass the smell test and a government that targets its own citizens with weaponized agencies that were supposed to be servants of the people not engines of their subjugation.
When Putin recently characterized the US as an “Empire of Lies”, it pained me to admit that he had a valid point.
The FED may eventually follow the Japan CB : https://tradingeconomics.com/japan/interest-rate
But it needs a re-socialengineering of american society.
The petrodollar is one pillar of the international reserve currency. The other is the total international debt denominated (serviced) in dollar. $305 trillions according to : https://www.iif.com/Research/Capital-Flows-and-Debt/Global-Debt-Monitor . Servicing this debt creates demand for the US dollar.
The BRICs are creating their separate financial system hence the dedollarisation trend. Jay Powell allluded to the possibility of 2/multiple international reserve currencies.
So we are likely entering the events for a pre-Bretton Woods II style meeting until then the FED can still buy time.
Nevertheless, sooner rather than later--because events appear to be moving rather rapidly in the direction you describe--something will have to give.
https://tomluongo.me/2022/08/10/from-davos-without-love-true-detective-or-true-conspiracy/
Tom Luongo is a fan of Mark's Substack! He gives it a thumbs up in this article.
I think that's pretty cool :)
Perfect timing on the Chinese end after the Taiwan fiasco.
My guess is this is a response by the Saudis to the Dollar inflation snafu, trust in the us to protect Saudi Arabia, and diversify / protect from US strings / influence / power / ability to sanction.
The Western sanctions against Russia are partially driving this. Saudis know they could be next…
In our rebuilding of our Constitutional Republic....this is necessary. Nixon & KISSINGER took the US off the gold-standing (backing of our currency with gold...(so they could overspend) Kissinger made a deal with the Saudi's...called the "Petro-dollar." Saudi agreed to ONLY sell their oil to any country with US currency...Kissinger guaranteed to militarily protect Saudi's. Every drop sold...even to VaChyna..HAD to be purchased with "dollars" .EXPANSION World-Wide of our Nation's money.
It is UNPRECEDENTED. First time since the 1970's that the Saudi's are bailing.... under Byedone-ville.
In the early 1900's...Pres. Woodrow Wilson allowed a private group of Bankers to form the "Federal" Reserve. N0 GOV. NOTHING....Private banks of the time, which btw Taxpayers pay 6% interest on every dollar we allow this bank-cartel ...6% for the Big-bank...for us to use supposedly our own currency. (That means there's Interest debt..that is backing our current currency.
Their ponzi-scheme is coming to an end historically...It really crashed in 2008-2009...Gov/Fed has been artificially keeping it going, using every accting gimmick known to man. "We've" been bankrupt for decades!
Our current economy is gonna go belly-up already.....so the evil-ones plans all along is they were going to "secretly" re-boot the economy.....
but God Bless the internet....Patriots started waking up and were beginning to network with each other....Patriots started pushing back......(they thought they were going to do this secretly and We the People would never know) (Davos crowd) has been preparing to take away and get CONTROL of our Nation...even if they had to start multiple wars or whatever next "big thing" they'd created for DISTRACTION. BTW....I mention Davos cause Klaus-the-nazi mentored under Kissinger....then went power-hungry...but..that's okay....because....
Patriots from every walk-of-life, education, financial status, base of expertise, skill-sets etc....have been awakening..and networking....and slowly but steadily....and THAT's how we got TRUMP.
Patriots know that the current "Fed Reserve Banking System" is out of juice. And we've been planning to take back OUR CONSTITUTION & Bill of Rights...and Rule of Law that BELONGS to We The People.
The evil ones would love to get Patriots out in the streets to "fight" with their paid thugs...DON'T TAKE THE BAIT. WE follow the Rule of Law.....until all possible remedies have been exhausted.....
So the battle at the moment is....who...which side...good or evil...takes control to rebuild (Patriots) or be slaves to the evil ones.......45 was willing to put his Life, Liberty, and his fortune on the line....So is Mike Lindell...and a few other gazillions who shall remain nameless....to boost this Liberty movement....
and even this platform is a sample of a MAGA-economy being built...to replace and crashing "evil-ones-economy" we all grew up in.
Don't get mad....get BUSY. .....We are all here at this point in time for a Reason... At the bare minimum.....read the Constitution and the Declaration of Independence....KNOW YOUR God-given Rights...Know that the Constitution...is a RESTRICTION on what a Federal Gov't can do....and Congress...
pfhht!....Most of what they do up there is NOT one of NINETEEN (19) things they are ALLOWED to do up there....
damn....I can't believe I wrote that much. ha! sorry...not sorry {naughty-grin}
So Powell is rearranging deck chairs on the Titanic?
I'm not so sure. What Dissonant1 is pointing out above is all the current debt is already fixed at whatever rate it was issued. Kind of like when you finance your home with a fixed 30 year loan. If the rates go up, you are still paying on the original rate and it's only new debt that is issued at the more costly/higher rate that's going to be a problem.
Seems like a good way for the Fed to make Congress's cost of funding their shenanigans hurt more. (as if they even cared)
Well, that and according to Luongo, he's trying to see to it that the EU is caught behind a gate and can't get to a lifeboat before the U.S.
Seems an awful lot like trying to put the genie back in the bottle. In the dark. With your hands tied. While trapped on a runaway train speeding towards a canyon where the bridge is out. Ok, yeh, I got it, no matter how things go down, we are screwed.
As Putin shifted to sell Ural Crude, delivered through Odessa, in rubles, at a $30 discount to Brent (Spread is back to near war risks now, not $30), the re-emergence of global competition for commodity delivery + currency risk for the first time since Smoot-Hawley has caught many off guard, particularly those gaming the US$ financing schemes for said commodities in the Contango trade, for instance. It no longer works as the risk from delivery fails gets real. This competiton is extremely healthy for world trade and the liberty spread by freer markets benefits everyone.
(And is beneficially deflationary to boot!)
There is a counter-argument to the "Fed is trapped" argument. I have seen it made in several places but here is the one I just was able to find:
https://wolfstreet.com/2022/06/27/can-the-government-even-pay-the-rising-interest-expense-on-its-gigantic-debt-as-the-fed-pushes-up-rates-yes-heres-why/
I like Mark am not an economist but in simple terms the argument being made here is that 1) there is a lag between rates raising and the impact of such on servicing government debt, since higher rates only apply to new debt; and 2) In an inflationary environment, nominal rates of GDP growth and tax revenue will be able to compensate for the loss of real GDP growth and real tax revenue inherent in a recession. It sounds sort of like sticking steel needles in your eyeballs to make you forget about that leg you just broke... and then deciding which injury needs to be treated first... but there you go.
Luongo makes a similar argument about the "goodness" of rising rates (https://tomluongo.me/2022/08/08/economic-redution-inflation-expansion-everything-out-stock-nothing-cheaper/):
"The way out of this situation for the US is to raise the cost of capital, which the Fed is doing through raising interest rates and force fiscal discipline on Congress by curbing their ability to run deficits while simultaneously lowering taxes at all levels especially on small businesses and wealth preservation. "
The bad thing as Luongo notes is that Congress can still pass outrageous unneeded spending bills and thereby make the Fed's job of curtailing inflation that much harder. No fiscal discipline is statutorily enforced like it is with many states. Now of course Luongo does not think the Fed raising rates is about taming inflation, anyway. If he is right, the notion of them raising rates high enough to make any real difference to overall inflation on the demand side is moot from their point of view anyway.
If the GOP takes back the House of Reps in November, it can seriously haul in the overspending. But of course they won't, because they are complicit too.
I ask myself the same question every day. What can we do to stop the descent into lawlessness and tyranny? After the events of the last week, the quaint notion that the “rule of law” has any sway with those in charge is wishful thinking. Mark Twain once made the observation that physically brave men and women could be had by the cargo, but morally brave individuals who would stand up to evil, are in short supply.
It becomes easier with each passing day to see how the Nazis were able rise to and maintain their control over Germany. I guess we can also begin to appreciate what it must have meant to face the reality of going to war with England.
Pledging our “lives, our fortunes and our sacred honor”, doesn’t seem to carry as much sway as it once did.
I fear that we will end with a whimper and not with a bang.
I have to agree, sadly. I served in the military during a period when I pretty much assumed that we were the good guys with the better motives, but over the last few years I have reluctantly come to the conclusion that I was being played. Those of us who believed in “truth, justice and the American way” have been confronted with the Covid fiasco, an election that definitely does not pass the smell test and a government that targets its own citizens with weaponized agencies that were supposed to be servants of the people not engines of their subjugation.
When Putin recently characterized the US as an “Empire of Lies”, it pained me to admit that he had a valid point.
If it were possible to agree with your comments more than 100% I certainly would.