Whither The Dollar?

Bonus: Five Media Myths On Ukraine

What the Russia - Ukraine conflict—and the American role in it—may mean for the future of the dollar as the world’s reserve currency is perhaps THE hot topic resulting from the Zhou regime launching a full out economic war on Russia—through “sanctions”. Before I get into a discussion on what the status of the dollar as the world’s reserve currency has meant and currently means for average Americans and our constitutional order, I want to be clear that the article that I’ll be working from takes no sides in the Russia - Ukraine war, even though the discussion has been sparked by that war.

It may be useful to set this discussion up with the results of a recent Pew Poll, which presents American attitudes toward the war:

Byron York @ByronYork

New Pew poll on Ukraine war: Thirty-five percent of Americans support the US 'taking military action even if it risks a nuclear conflict with Russia.' (62 percent oppose.) https://t.co/7TcpmEHkc7

The short version of this is that the overwhelming majority of Americans are quite hawkish toward Russia—although whether they actually understand what they support is open to question. However, the recorded views in the poll tend to support a vision of America as World Good Cop, or perhaps World Parent, that is very closely related to the role of the dollar as the world reserve currency. There are two reasons for this. One is that the dollar’s status has increasingly been used as a weapon against countries we believe are misbehaving. The second is that the dollar’s status as the world’s reserve currency has financed America’s role as World Cop. Two different ways to spank naughty overseas actors, which also feeds into a simplistic Good Guy v. Bad Guy view of world affairs.

Importantly, all of this happens out of sight for most Americans, and when any thought is given to the matter few Americans have much understanding for the implications. Consider the poll results.

A full 85% of Americans favor maintaining “strict sanctions” on Russia—a formidable nuclear power. How many Americans understand that these sanctions, which include seizing the financial assets of this nuclear power, constitute acts of war? Any nation that pulled something like that on the US would regret that action—and that eftsoons or right speedily. Again, how many Americans are aware that these hyper aggressive US “sanctions” are leading major world economies (Russia, China, India, and more) to contemplate dethroning King Dollar as the world’s reserve currency—or what that might mean for them personally?

77% are in favor of maintaining US “military forces” in “NATO countries near Ukraine”. How many Americans understand that this means maintaining military forces not only “near Ukraine” but also very near Russia—or even, in the case of the Baltics, right on the border with Russia, over strong objections by Russia? Do those Americans fully understand that this is essentially what this war is all about—the fact that Russia considers the stationing of American “military forces” that close to its borders to be an existential threat? Do these Americans understand that nuclear capable Tomahawk cruise missiles could be included in the term “military forces”?

I doubt that there’s any such clear understanding, because when asked whether the US should take “military action” if it “risks a nuclear war with Russia” the total in favor drops precipitously to 35%. And yet the movement of military forces close to the borders of Russia is definitely a “military action”, and Russia has put its nuclear forces on heightened alert—probably aware that US Neocons are gaming out a nuclear first strike at this very moment.

So, this is the context in which Jason Pierce asks:

Will Joe Biden Oversee The Collapse Of The U.S. Dollar?

Pierce begins by noting that a collapse of King Dollar is not as remote a possibility as many believe. The global dollar regime is part of our way of life, but that doesn’t mean it’s an immutable way of life. For example, no less an authority on these matters than Fed Chairman Jerome Powell “quipped” recently:

It’s possible to have more than one reserve currency.

That’s a true statement, of course, but as quips go it’s not terribly funny. It certainly wouldn’t be funny for our way of life—no doubt Powell would manage, but ordinary “little people” would take a big hit.

A sign of what could be in the works is the news that Saudi Arabia is considering selling at least some of its oil in other currencies than the dollar. That would be a huge shift, as the WSJ noted, because since 1974 the Saudis have done their business exclusively in dollars. Are the Saudis trying to drive a hard bargain with the US for something else that they want? Or are they responding prudently to the fact that they’ll be competing with cheaper Russian and Iranian oil that may not be selling for dollars? Whatever the reason, this is not good news. China and India are lining up to purchase Russian oil and gas, and word is that Russia is even now cutting off one of its main pipelines to Europe. China and India will not be using dollars.

Now, since oil and gas are what keeps the world’s economies running, that means that if a significant portion of the world economy stops using King Dollar as the only reserve currency, then “the Biden administration is hurtling towards ringing the death-knell for the dollar as the world’s reserve currency.”

What price sanctions? Why would this mean “a dramatic drop in the standard of living and quality of life for middle-class Americans”? Simply put, our quality of life is based on paying for the things we want in grossly inflated dollars, and the only way we’ve been able to get away with that is because of King Dollar’s status as the world’s reserve currency. If King Dollar is dethroned from its current basically exclusive status, then the value of the dollar will drop dramatically. And quickly.

It’s been said that there are two ways to go bankrupt: gradually, then suddenly. What can’t go on forever, suddenly won’t. So how close has Biden taken the United States to “suddenly”? We don’t want to find out.

Pierce frames the issue in terms of the Welfare-Warfare state that America has become. As you read the excerpt below, consider also that among the other consequences this arrangement has brought about is the growing discontent and division within America—which has led to the rise of the National Security State that America is openly morphing into.

The Fed’s dollar inflation acts as an invisible, pernicious tax on people who exchange in dollars, especially the poor, middle class, and those on fixed incomes (retirees). The U.S. government has also used inflation to fund its unsustainably enormous federal bureaucracy.

The growth of this welfare-warfare state has helped shake other nations’ confidence in the dollar, because it’s partly the Fed’s enabling of this state that has ballooned the U.S. national debt past $30 trillion. The welfare-warfare state adheres to the tried-and-true economic adage that “if you subsidize something, you get more of it.”

For decades, Congress has subsidized the welfare wing of the federal government, resulting in more Americans on welfare, for longer. Likewise with the warfare wing, or what President Dwight D. Eisenhower warned was the “military-industrial complex” more than half a century ago.

If you’re a Neocon, no doubt you believe that the Warfare state is a good thing—it maintains the American Empire and it keeps King Dollar enthroned over the world economy. Cheap goods flow to America and keep the subject population fat, dumb, and happy. But not so much anymore. Moreover, the Neocon approach to foreign policy as international bullying has worn thin around the world.

It’s no secret that the more money the United States has poured into the warfare state, the more destructive military adventurism and wars of choice our leaders have committed the United States to. The recent examples of Afghanistan, Iraq, and Libya come to mind. It’s now clear we can add Ukraine to the list.

These kinds of “foreign entanglements” are exactly what the Founding Fathers warned us against.

Foreign actors have seen the problem with Neocon smarty pants approach:

The collapses of all empires share a common thread: the inflationary destruction of their currencies, through government expansion; perpetual wars abroad; and bread-and-circuses and “let them eat cake” (or drive electric cars) on the home-front.

The United States had plenty of warnings over the years. Powell’s statement is mild in comparison to others. On the heels of the 2008 financial meltdown, Erskine Bowles, who led President Obama’s debt commission, said the obvious loud and clear: “I think today we face the most predictable economic crisis in history… I think it’s clear, if you do simple arithmetic, that the fiscal path that the nation is on is simply not sustainable… Deficits are like a cancer, and over time they are going to destroy our country from within.”

Since Bowles’ warning, the United States has more than doubled the national debt.

Even enemies of the United States have issued warnings. Osama bin Laden’s strategy of “Death by a Thousand Cuts” was to keep the United States in a permanent war, to economically bleed the United States dry over time. Of course, bin Laden’s dead. Nonetheless, his strategy is clearly still in play. The U.S. federal debt was some $6 trillion in 2001, as the United States commenced its “War on Terror.” Again, the national debt today is more than $30 trillion.

If the GWOT against Third World countries has led to these consequences, what will a confrontation with the entire Eurasian landmass lead to? Especially if Russia, China, India and other major economies continue in the direction of dethroning King Dollar? The EU will face enormous pressure from those countries—as Germany is already discovering.

All of this could not be coming to a head at a worse time. In 2020 the US political, financial and Deep State establishment saw fit to nullify an election and substitute a career incompetent over the heads of the nation. Now, with the Zhou regime pursuing a Cloward-Pivens strategy domestically, while attempting to bully most of the world into subservience to the Great Reset, we seem to be aboard a leaky ship heading into dangerous waters:

There’s zero effective leadership from DC on the United States’s deficits, debt, and dollar madness. But’s it’s not too late. It’s just going to have to take a whole lot more Americans to focus on the issue to force our “leaders” to truly fix it.

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I want to put in a plug for a sensible, though lengthy, article which, again, doesn’t really take sides in the Russia - Ukraine conflict. What it does do, however, is point out some of the complexities involved. Those complexities go back centuries, but the author tries to frame them in terms of the myths that are propagated by the MSM, leading to the usual misconception that the problems are susceptible of an easy solution—a regimen of “strict sanctions” and judicious application of military force leading to an enforced American style “democracy” should suffice. All leading to the usual devastation:

Break Glass in Case of Kremlin Disinformation

Addressing five media myths spurring anger about a terrible war Americans can do nothing to solve while poverty and the destruction of liberty continue at home.

The five myths are:

Myth 1: The United States Is Defending Democracy

Myth 2: Ukraine Is Fighting to Remain Sovereign and Independent

Myth 3: The Russian Invasion Ends the Post-World War II International Military Nonaggression Between Nation-States

Myth 4: Labeling the Azov Battalion As a Neo-Nazi Group Is Misleading At Best

Myth 5: Questioning Media Narratives Is Akin to Peddling Kremlin Propaganda

While I by no means agree with everything in the article, it’s a good starting place for anyone interested.