Will China and Russia Diversify Away From Dollar?

Collapse of the Greenback? Will the Dollar get an “Arab Oil Shock”?

• What Americans don’t realize is: their rulers are a bunch of gangsters in Armani suits. These bunch of criminals have sold America out for their own profit. Publicly, they behave as championing human rights and fighting for the oppressed. Privately, they are the agent provocateur of most of the wars around the world. Democrats or Republicans, at the top, it is the same Illuminati cabal who rules. The public are made to believe that they have a freely elected government. In reality, the candidates were already pre-chosen and presented to the masses for ‘election’. The honest and patriotic officials like Ron Paul, Kucinich….. are marginalized.
    
• Why do you think Obama’s policies are same as Bush’s. What happened to his Anti-War stance? He is a war monger and is escalating the war in Pakistan, Afghanistan and soon to be Iran. (He deserves the Nobel Peace Prize?? Yeah right.) Make no mistake about it, Obama is an Illuminati puppet. These Illuminati minions have sold out Americans and are a bunch of traitors.
   
• What is really going on with all the recent talk about ending the use of the USD in the oil trade? William F. Engdahl writes :
    
  Arab oil producing nations and the some world’s largest oil consumers including China and Japan are reliably reported to be secretly planning a long-term exit from pricing their oil trade in dollars. If true, it would spell the death knell for the dollar as world reserve currency and for the USA as global economic power.
   
  Ever since Washington tore up the Bretton Woods treaty in August 1971 and went onto a “dollar paper reserve system” instead of a dollar backed by gold, the United States, as the world’s most powerful military power, has been able to dictate financial terms to the world. Nations like Japan and later China, dependent on US export markets, would dutifully invest their trade surplus dollars into US Government debt, in effect financing wars such as Iraq or Afghanistan they opposed. They saw no choice. Arab oil producing countries, under US military pressure, were forced to sell oil only in dollars, a direct prop to the dollar when the US economy was in terminal decline. That may be rapidly about to come to an end.
   
  According to a leaked report from Arab Gulf oil producers, there have been a series of secret meetings in recent months between the major Arab oil producers, including Saudi Arabia, and reportedly also Russia, together with the leading oil consumer countries including two of the three largest oil import countries—China and Japan.
   
  Their project is to quietly create the basis to end a 65-year long “iron rule” of selling oil only in US dollars. As I document in my book, Mit der Ölwaffe zur Weltmacht (Kopp Verlag), following the 400% oil price shock of 1973, which was deliberately blamed by US media on “greedy Arab Shiekhs,” the US Treasury made a secret trip to Riyadh to tell the Saudis in blunt terms that if they wanted US military defense against potential Israeli attack, that OPEC must privately agree never to sell oil in currencies other than the US dollar. That “petrodollar” system allowed the US to run staggering trade deficits and remain the world reserve currency, the heart of its ability to dominate and control world financial markets until the crisis of the sub-prime real estate securitization in August 2007.
   
  The participants in the project reportedly envision using a basket of currencies reflecting producer-consumer trade relations, one backed by gold as a solid backbone. It would not initially be a new currency as some have surmised, but rather an arrangement that would eliminate the risks of pricing oil sales in fluctuating and likely depreciating dollars.  
   
  Iran announced recently that in the future it would sell its oil for euros not dollars. According to these reports, the basket of currencies would include a mix of yen, euros, Chinese yuan, gold. Brazil would reportedly join as both a producer and consumer country.
   
  The secret plan was first reported by respected Middle East correspondent, Robert Fisk, in the UK Independent. Fisk claims to have confirmed existence of the plan from Arab as well as Hong Kong Chinese sources. I have confirmed from very senior and well-informed Gulf sources that the talks are in fact real. The oil producing countries have been fed up for years about having to price their oil in dollars or face US reprisals. They are steadily losing as the dollar depreciates against other currencies and against gold. Following the US declaration of the War on Terror by the Bush Administration after September 11, 2001 most leading Arab oil producing countries privately saw US policy as being aggressively aimed at them. The un-justifiable US invasion and occupation of Iraq in 2003 merely confirmed that as well as subsequent US threats against Iran.
   
  Initially various governments involved in the leaked plan have publicly denied vehemently such a plan. That in no way invalidates that such moves are afoot. They are well aware that the United States as a wounded tiger can be far more dangerous. The leak of the plans in the world media, whether every detail reported by Fisk is true or not, feeds what is an inevitable decline in the dollar as a reliable reserve currency for world commerce.
   
  What is not clear is what the potential response of Germany and France, the two pivot powers within the EU will be. If they decide to cast their lot with oil producing and consuming countries, they open their doors to vast new trade and investment potentials from the countries of Eurasia. If they cringe from that and decide to remain with the British Pound and US dollar, they will inevitably sink along as the dollar Titanic sinks. 
   
  With that decline of the US dollar goes the lessening of the political power of the United States as sole economic and financial superpower. We face very turbulent waters ahead and gold not surprisingly is gaining in this uncertainty. 
   
• See also :
   
  Morales: U.S. Planning Coups in Latin America !
  The Militarization of Latin America: Seven US Military Bases in Colombia
  The Secret Government
  John Perkins: The Secret History of the American Empire
  John Perkins: The CIA & Chiquita Inc Engineered Coup in Honduras?
  Latin American Leaders Oppose US Military Interference
  Hugo Chavez Warns of War in South America!
  Webster Tarpley – What Obama & The Globalist Will Do Next !
  Obama – Wars on a Greater Scale!
  Kucinich: ‘Another $106 billion and all we get is a lousy war’
  America’s Secret Destiny: The Illuminati, Free Masons, The Founding Fathers and The New World Order!
  Forging a “New World Order” Under a One World Government
  NATO Builds History’s First Global Army
  The Federal Reserve: Secretive And Incompetent Organization ! The Creature From Jekyll Island.
  History of Money & Fractional Reserve Banking System
  How International Bankers Gained Control of America!
  Confessions of an Economic Hit Man – John Perkins
  History of The New American Century
  Major General Smedley Butler – War is a Racket !
  America: From Freedom to Fascism
  America – Why do We Fight ?
  The Plot to Overthrow Franklin D. Roosevelt
  Do Banksters and the Military Industrial Complex Rule the World ?
  What is the Unites States preparing in Pakistan?
  Exposing the Truth on NATO-US Agression against Yugoslavia
  Washington Plans Global NATO To Replace UN

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U.S. Dollar Develepments, The Most Critical Financial Developments of Your Lifetime…

• As the USD depreciate against major currencies, there will come a point where China will have to unpeg the Yuan. It is pegged at USD-CNY 6.825 currently. If China continues with this peg, it will result in inflation and the destruction of their own currency. This is perhaps the main reason why the Chinese government have been actively encouraging their citizens to buy gold and silver. I think China will just re-peg at a higher rates step by step, say CNY6.0, 5.5, 5.0… I doubt the Chinese will allow the free float of the Yuan. They are gradualists when it comes to economic policies, driven mainly by their need for stability.
   
• Larry Edelson gives his usual sound advice:
    
  The U.S. dollar has now entered the final days of its reign as the world’s reserve currency. I’ve been warning you about it. And the events are unfolding precisely as I predicted …
   
  1. Behind closed doors, the G-20 countries have now taken control of the world’s economic caretaking. It is no longer the G-3 nations that are in charge … or even the G-7 nations. The G-20 is in charge.
   
  Put another way, the U.S. is now being forced to placate our largest creditors in an international forum, where it is now just one of 20 countries in charge of the world’s economic affairs. And it is the largest debtor of the group, by far.
   
  2. Behind closed doors, the Arab Gulf States have also been meeting with Russia, Japan and China to replace the dollar for pricing oil. Make no mistake about this: The world as you know it is changing.
   
  3. And yet, in the open, in public, Washington isn’t making one single comment about these developments. Not one peep. Not even trying to jawbone the dollar higher.
   
  Why? Because, whether our leaders admit to it or not, their top priority is clearly to let the U.S. dollar fall in value, even if it ultimately means that it will be replaced by a new world reserve currency. Even if it ultimately means your cost of living is going to skyrocket, and everything you ever knew about the world is turned upside down.
   
  Their hidden rationale: To inflate away the mountains of debts in this country, by artificially raising asset prices via devaluing the currency in which most of the world’s major assets are denominated.
    
  Don’t get me wrong. It is a sad state of affairs the U.S. finds itself in: The massive financial crisis, Washington’s gargantuan $125 trillion in debt, the real estate crisis, and ultimately, the end of the dollar as the world’s reserve currency. But there’s nothing you or I can do about it, except protect our wealth and seek out the profits we can reap as well.
   
  That’s why, back in April of this year in a Money and Markets column I wrote, I said unequivocally that real money — gold — was the only win-win investment I knew of. Now, is it any surprise then that gold has busted through to new record highs? Is it any surprise that gold mining shares are taking off to the upside, soaring as much as 8 percent in a single day last week?
   
  Is it any surprise that other tangible asset markets are also starting to rally sharply again — oil, copper, platinum, palladium, and silver? Or that even agricultural commodities look like they are bottoming and appear poised for significant rallies? I don’t think so. It’s hardly surprising at all. For when paper currencies are devalued, savvy investors turn to natural resources and tangible assets to protect their money.
     
  My view: If you’re not seeking out shelter from the falling dollar by investing in gold and other natural resources, your wealth is going to be confiscated from you on the sly by Washington. That means it’s mandatory that now, more than ever before, you take the following steps …
   
  First, with the next phase down in the dollar starting, continue to steer clear of all U.S. Treasury notes and bonds. Not only is the yield still meager, but with the dollar set to lose much more purchasing power in the months and years ahead, Treasury notes and bonds are a losing proposition. Period.
   
  Also continue to steer clear of foreign sovereign notes and bonds. They too, while maybe more attractive in yield, will likely suffer as the world goes through a massive change in the currency markets, the result of the dollar’s eventual replacement as the world’s reserve currency.
   
  Second, and very importantly: GOLD. Depending upon how long you’ve been with me and how aggressive you’ve been with my recommendations, you have up to 25 percent of your investment portfolio in a series of my gold recommendations ranging from physical gold and gold ETFs to mutual funds and gold mining shares. Hold that gold. And stay tuned to my columns and my Real Wealth Report for updates.
   
  Third, with any speculative funds you have available, consider getting more aggressive with natural resources. Not just gold or oil, but also copper, platinum, palladium, silver, agricultural commodities like soybeans, wheat and corn … and even staple commodities like coffee, cocoa, and sugar.
   
  Nearly all natural resources are now entering renewed bull markets to reprice themselves higher in anticipation of a much weaker dollar that will eventually be replaced, and all the uncertainty surrounding the future of a new world monetary system.

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Dollar Loses Reserve Status to Yen & Euro!

• The USD is under assault. The Dollar Index (USDX) level of 76 has been breached convincingly. It ended yesterday at 75.86, in early morning Wednesday trade it is testing the 75.50 level. The only real support is at the 71.8 – 72.0 level. We should see this level tested next week. Gold will continue to rise. When the 72 level is breached, the USD will be in uncharted waters. I see a 30% devaluation of the USD coming by the end of the year. So the USDX will go from 72 to 50 rapidly. Monetary crisis dead ahead! Make the switch to real money: gold and silver before it is too late! New York Post reports :
    
  Ben Bernanke‘s dollar crisis went into a wider mode yesterday as the greenback was shockingly upstaged by the euro and yen, both of which can lay claim to the world title as the currency favored by central banks as their reserve currency.
   
  Over the last three months, banks put 63 percent of their new cash into euros and yen — not the greenbacks — a nearly complete reversal of the dollar’s onetime dominance for reserves, according to Barclays Capital. The dollar’s share of new cash in the central banks was down to 37 percent — compared with two-thirds a decade ago.
    
  Currently, dollars account for about 62 percent of the currency reserve at central banks — the lowest on record, said the International Monetary Fund. Bernanke could go down in economic history as the man who killed the greenback on the operating table. After printing up trillions of new dollars and new bonds to stimulate the US economy, the Federal Reserve chief is now boxed into a corner battling two separate monsters that could devour the economy — ravenous inflation on one hand, and a perilous recession on the other.
   
  “He’s in a crisis worse than the meltdown ever was,” said Peter Schiff, president of Euro Pacific Capital. “I fear that he could be the Fed chairman who brought down the whole thing.” Investors and central banks are snubbing dollars because the greenback is kept too weak by zero interest rates and a flood of greenbacks in the global economy.
   
  They grumble that they’ve loaned the US record amounts to cover its mounting debt, but are getting paid back by a currency that’s worth 10 percent less in the past three months alone. In a decade, it’s down nearly one-third. Yesterday, the dollar had a mixed performance, falling slightly against the British pound to $1.5801 from $1.5846 Friday, but rising against the euro to $1.4779 from $1.4709 and against the yen to 89.85 yen from 89.78.
   
  Economists believe the market rebellion against the dollar will spread until Bernanke starts raising interest rates from around zero to the high single digits, and pulls back the flood of currency spewed from US printing presses. “That’s a cure, but it’s also going to stifle any US economic growth,” said Schiff. “The economy is addicted to the cheap interest and liquidity.”Economists warn that a jump in rates will clobber stocks and cripple the already stalled housing market.
   
  “Bernanke’s other choice is to keep rates at zero, print even more money and sell more debt, but we’ll see triple-digit inflation that could collapse the economy as we know it. “The stimulus is what’s toxic — we’re poisoning ourselves and the global economy with it.”

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Why Soaring Gold Price Should Set Alarm Bells Ringing!

• The argument in the MSM is mainly about inflation/deflation. Gold is rising, so it is signalling inflation dead ahead is the usual answer. For me, the sharp rise in the price of gold is an indication of calamity ahead: war, economic, financial, monetary collapse…etc. It is the canary in the coal mine, the calamity indicator. I don’t really buy into the inflation talk that much. Not that I think inflation won’t come. But that the rise in commodity prices is a better and more direct indicator. Gold is signalling major danger ahead!!! Fiat currencies are in trouble. The world is heading towards a monetary crisis. The Independent UK reports :
    
  It is a squawk of alarm – but is it alarm about the threat of inflation in general, or about the long-term value of the dollar? The gold price is at a new record in dollar terms. ……
      
  At times of trouble people turn to gold. That is why the present surge in the gold price is troubling. There is a huge trust deficit. Governments around the world are borrowing more than they have ever done in peacetime, and savers are profoundly suspicious that they will seek to inflate away the real value of their borrowings. The fact that part of this debt is being bought by the central banks, most notably in Britain, rather than coming from genuine savers alarms people even more. The inevitable progression of the present monetary easing programme ends in inflation. The issue is what the authorities will do about that once it happens.
   
  The central issue is that governments are resorting to wartime financing measures to finance the consequences of a peacetime policy failure. Inflation has almost always followed periods of wartime finance, though it is usually suppressed for a while by rationing and other means. Savers reasonably ask: why should this time be any different?
   
  As a result, two things are happening. One is the rise in the price of gold, the other the differentiation being made by investors between currencies where they feel, rightly or wrongly, that there will be a solid commitment to contain inflation and those where the commitment will be less sure.
      ……..
  However, it is important to get the gold price into perspective. In itself it does not matter. Gold is unlike other commodities, most especially oil, in that a rise in the gold price does not feed through into inflation elsewhere. It is not a raw material as such, or rather it has limited industrial uses. A rise in the oil price might check the global recovery; a rise in the gold price won’t. 
   
  What it does do, though, is signal alarm. The last time that gold was in high fashion was in 1980, when inflation and interest rates in most of the developed world were in double digits. It shot to a peak of around $850 an ounce. That would be about $2,300 in today’s money, according to Capital Economics, which supplied the charts.
   
  Still, the price did not stay there for long. It slumped back to $500 before trading in the $600-$700 range for most of the rest of the year. The reason was an awareness that governments around the world were gradually recovering control of inflation, or at least had made a start on that policy objective.
      ….
  So what might this mean for the dollar, and indeed sterling? I don’t think one should get too hung up about short-term swings in confidence about different currencies. All our experience shows that they eventually revert somewhere towards their purchasing power parity, though they may remain out of line for a long time. Arguably the dollar has been artificially strong for several years, as it suited Japan and China (and some other Asian countries) to hold down their own currencies and build up large dollar balances. Being a reserve currency does convey advantages, at least in the medium-term, and the US has found it easier to borrow abroad as a consequence of the dollar’s reserve status. 
   
  There has been a lot of stuff in the past week about the dollar eventually losing its reserve currency status and about oil being quoted in a basket of currencies. The big point here is that a gradual diversification away from the dollar is already happening, and a further shift is inevitable, but that does require other countries making their currencies available to be held in central bank reserves. China does not seem too keen on that.
     …….
  In all this, sterling is a footnote. The Governor of the Bank of England, Mervyn King, is trying hard to talk down the pound. All you need to know to make a turn is to wait until you know he is making a speech and buy some other currencies ahead of it. But the more serious criticism of the Bank is that it has been complicit in allowing the Government to run up a deficit that looks like being somewhere around 14 per cent of GDP. That is even worse than the US. Had the Bank not had its present quantitative easing programme in place, gilt yields would be at least half a percentage point higher.
     …….
  We are not alone in this danger. I fear the US may face an irrationally serious run on the dollar at some stage during the winter. Indeed that is really what, in its disorganised and incoherent way, the gold market is trying to tell us. Savers worldwide don’t trust the dollar. Why on earth else might they choose to stick their cash in gold? 

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China, Russia Aim To Trade in Yuan, Rouble Bypassing the Dollar

• If you read between the lines, you will conclude that there is a concerted effort to dump the USD. You will not hear of any official announcements to that effect. Abandoning the USD, means the end of the western Illuminati financial and monetary system. It amounts to war for this Illuminati cabal. Middle east oil countries will not be so dumb as to declare: we are going to abandon the USD. It amounts to a death warrant on themselves. Mark my words, behind the scenes the chess pieces are being moved and everyone knows the consequences. War is likely. I am beginning to hear of it.
   
• Although, I am skeptical of some of the reports and there seems to be some disinformation,  Sorchal Faal is reporting of war consequences. Discernment needed, not everything is true, not everything is a lie.
    
  Obama Issues Grim Warning To Russia And China: “We Will Attack”
  Early reports from President Medvedev and Foreign Minister Lavrov’s meeting with US Secretary of State Hillary Clinton [photo 2^nd left] state that President Obama has issued a “grim warning” to Russia and China that the Americans are prepared to “massively attack” should they carry out their plans to replace the US Dollar with the Rouble and Yuan in cross-border trade.
   
  Especially unnerving to both Russia and China about Obama’s warning is that it came at the moment that Prime Minister Putin was meeting in Beijing with Chinese President Hu on finalizing their plans to replace the US Dollar as our World’s main Global Currency in favor a basket of currencies as the ‘Gas Wars’ of the 21^st Century are nearing open warfare.
   
  Russia and China in pitting themselves against the Americans, and the West, in what is shaping up to be the pivotal conflict of our era, just announced a $25 Billion agreement for Russian energy giant Gazprom to supply energy-hungry China with natural gas in a move to further strengthen their alliance against the US who this year announced an over 35% increase in their reserves brining them closer to their goal of energy independence.  
   
  Not being told the American people by their propaganda media is that as Russia has now toppled Saudi Arabia as the World’s largest oil producer, the Saudis have been put into the previously unthinkable position of demanding that the West provide it with massive financial assistance as it faces total economic collapse.
   
  Even more importantly being kept from the American people is the critically, and decisive for the 21^st Century, Persian Nation of Iran, which holds the largest natural gas reserves in the World at over 991 Trillion cubic feet that is coveted by the energy starved Europeans, and whose continued threats of war are nothing but their not-so- subtle attempt to keep the Iranians out of the ‘orbit’ of the Russian and Chinese.
   
• Reuters reports on the agreement struck between China and Russia:
    
  China and Russia said on Tuesday that they would like to expand the use of their national currencies, the yuan and the rouble, in bilateral trade, according to media reports.
   
  The goal of denominating trade in their own currencies in order to cut reliance on the U.S. dollar and the euro was first voiced by Russian and Chinese leaders in June at a meeting in Moscow.
   
  China has started trials for settling trade in yuan with a series of neighbours, including Hong Kong, although not Russia. The trials have made little progress so far, in part because the yuan lacks full convertibility, and the vast majority of Chinese trade flows are still denominated in dollars.
   
  China and Russia would like to expand the roles of the yuan and the rouble in trade, especially in their border regions, and may sign a bilateral monetary agreement, Chinese Vice-Premier Zhang Dejiang was quoted as saying by Caihua, a Hong Kong-based news agency.
   
  At a meeting in June, Russian President Dmitry Medvedev and Chinese President Hu Jintao said it was “essential” to put conditions in place for trade to be settled in yuan and roubles. China and Russia have advocated the creation of a new super-sovereign currency to replace the dollar as the main global reserve currency, but have acknowledged that this would be a long-term project. Both would lose a lot from any steep drop in the U.S. currency because much of their foreign exchange reserves are invested in dollar-denominated assets.
   
  Russian Prime Minister Vladimir Putin is visiting Beijing and his meetings have focused on shoring up economic relations, ushering in trade deals said to be worth $3.5 billion.

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