Category End of the Petrodollar

Apr 4 2023

The End of the Petrodollar?


Armstrong Economics Blog/World Trade Re-Posted Apr 4, 2023 by Martin Armstrong

Another oil deal has been initiated without the use of the dollar. The India Ministry of External Affairs (MEA) announced that their latest trade deal with Malaysia would be settled in Indian rupees. “This initiative by the Reserve Bank of India (RBI) is aimed at facilitating the growth of global trade and to support the interests of the global trading community in Indian Rupees (INR),” the formal statement noted.

Indian has benefitted from the West’s distraction from the Ukraine war. The RBI is allowing 18 counties to open Vostro accounts and has been attracting new deals in trade and manufacturing. New Delhi and Moscow have strengthened their relationship as India is not imposing sanctions.  The Indian Commerce Ministry said its five-year plan is to “encourage” the use of the rupee on an international scale, while also planning to expand exports $2 trillion by 2030. Trading in rupees will also allow India to save on conversion spreads and limit the country’s dependence on the volatile dollar.

The BRICs treaty (Brazil, Russia, India, and China) remains strong and oil giants Saudi Arabia and Iran would like to join the partnership. The Saudis stated at the beginning of the year that they were open to settling trade in currencies other than the USD. “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” Al-Jadaan said during Davos. As we have seen in recent months, Saudi Arabia is aligning itself with China over the US.

The Vietnam war and other government missteps made it impossible for the US to maintain the fixed price of gold established under Bretton Woods. The USD relative to gold fell as the supply of dollars grew, pushing Nixon to abandon the Bretton Woods system entirely. US government debt was rapidly rising as confidence in the dollar plummeted. America needed an enticing way to sell its debt, and that was when Nixon convinced Saudi Arabia, the largest crude exporter, to purchase Treasurys in dollars in exchange for military aid. Hence the “petrodollar” was born. The creation of the Organization of the Petroleum Exporting Countries (OPEC) only further enhanced the dollar’s dominance in energy purchases.

Here we are yet again amid another war and a high budget deficit. The Saudis no longer need protection from America, and siding with Western interests would be a deterrent to its international deals with countries in the BRICs alliance and some in the OPEC+. Despite the green agenda, the world cannot operate without oil. The major oil exporters are now aligning and cutting out the US as their middleman.

Apr 4 2023

Masks Now Embedded in Japanese Culture


Armstrong Economics Blog/Disease Re-Posted Apr 4, 2023 by Martin Armstrong

Comment: You know, mask wearing in japan was officially ended 5 weeks ago. And there has been no change of practice whatsoever. Mask wearing continues at close to 100pct.

Especially among young people mask wearing seems to be here to stay, possibly forever. Somewhere a psychologist will write a book about this phenomenon. Never in my life could I have imagine that the great nation of japan would adopt this practice like people wearing shoes. People driving in their cars on their own are wearing masks for god Sake. Mask wearing is now the primary method of signaling that the wearer is careful, thoughtful and considerate of others.

Reply: The pandemic will go down as the greatest mass social experiment in history. Face masks have become an everyday essential item for most Japanese. Implementing the face mask mandate was seamless in Japan as masks for allergies and disease were already commonplace. Mask sales rose during flu outbreaks years before COVID, especially in high-density cities. Some people wore masks as a fashion accessory or to limit approachability in social interactions. A 2011 poll from News Post Seven found that 30% of those who wore masks did not cite health concerns.

It took three years, but the Japanese government no longer mandates masks. Yet, it has become embedded in the culture. The Japanese culture values respecting one’s community. The government has never admitted that masks did not prevent the spread of COVID in a meaningful way. Instead, politicians continue to wear masks at public appearances, and the prime minister is encouraging people to continue wearing masks around vulnerable individuals. “We are not forcing anyone to wear it or take it off,” Prime Minister Fumio Kishida told reporters after the mandate ended. “I think there will be more occasions when I will take my mask off.” It is now seen as a respectful gesture for one’s neighbor.

Research institute Laibo conducted a study in February to determine why people are choosing to stay masked. Only 5.5% of 561 respondents said they would not wear a mask. Over half (50.2%) said that wearing a mask simply became a habit, while most (53.4%) said they are still afraid of catching the coronavirus. About 27.8% of respondents said they will wear their masks “unconditionally.”

Masks may have become a cultural norm in Japan. Everyone should have the ability to act on their own free will, but I suspect many feel the need to conform. The studies citing the ineffectiveness of mask usage have been swept under the rug. As the original commenter stated, masks now signal that the wearer is considerate of others. If only the government would come out and let the people know it is safe for both them and their neighbors to breathe in the air.

Apr 1 2023

Trump & Likely Gag Order to Create Imprisonment


Armstrong Economics Blog/Rule of Law Re-Posted Mar 31, 2023 by Martin Armstrong

Trump will now find himself silenced and whatever Free Speech he once had, will now be stripped away from him like the rest of his constitutional and human rights. We are about to witness just how corrupt our legal system truly is. This is George Soros’s puppet. Alan Bragg will now show the entire world that in the United States, there is no such thing as constitutional or even Human Rights.

Bragg will most likely seek a Gag Order in addition to a denial of bail, which no matter how ruthless the judge, will probably realize he cannot deny bail to a former President. Still, they will most likely put a Gag Order on Trump, and that way they can throw him in jail even indefinitely as they did to me using Civil Contempt of Court which is not a crime. If they charge him with Criminal Contempt, then he gets a trial by jury. Under Civil Contempt, you have ZERO rights and no right to a trial.

Because I did an interview in the Japanese press and told all my clients to file suit against the bank, they then put a gag order on me FOR LIFE to prevent me from providing my own clients with evidence against the bank. Normally, you are supposed to get more time if you do not assist the victims. Law means ABSOLUTELY nothing in court. They do as they like and the Constitution means absolutely nothing.

This is who I believe is a disgusting individual. I have been told he ran for office saying he would indict Trump. Screw NYC. Crime is off the hook. It is no longer a safe city to even go to visit. At the last coin show there, they robbed a dealer and stole his entire inventory when packing up to leave. That’s OK – but for Trump to pay money to a porn star warrants endless taxpayer money to be spent for this guy’s career.

BEWARE Mr, Trump. They kept me in prison on Civil Contempt from 2000 to 2007. I was released ONLY because I got to the Supreme Court and they ordered the government to explain how I could be held for 7 years without anything on statute 28 USC 1826 which had a maximum of 18 months. To avoid having to answer, they suddenly released me.

So forget the payment to a Porn Star

They can now gag trump, restrict his movements, and harass him to PREVENT him from running in 2024. They will listen to every word he says and are just going to wait to be able to throw him in prison on Civil Contempt indefinitely with ZERO Constitutional Rights. Welcome to the REAL America. They call it a “protective order” to protect the Government and Bragg as you are stripped of ALL your First Amendment rights.

Mar 31 2023

Earn Six Figures Without Working


Armstrong Economics Blog/Politics Re-Posted Mar 31, 2023 by Martin Armstrong

The US government has been on a spending spree over the past few years and there is absolutely no way they can ever pay the bill. Federal spending hit $4.45 trillion in 2019 in the wake of the pandemic, according to the Congressional Budget Office (CBO). That figure hit $6.21 trillion as of the latest report, marking a 40% uptick in four years. What has changed?  

 This goes far beyond the Ukraine fiasco. While defense spending rose 18% over the past four years, nondefense spending shot up 43% to $941 billion. Spending on Social Security and retirement increased 33% from 2019 to 2023 as the Baby Boomer generation began to exit the workforce. Retirement has become a luxury with the current cost of living and many are opting to continue working rather than retire. Yet, the mentality of hard work paying off is dwindling. The effects of the pandemic can still be felt as the workforce dynamic has changed. The supplemental unemployment income distributed freely during the pandemic has had disastrous consequences. 

Spending on food stamps has increased by 102% from $63 billion in 2019 to $127 billion in 2023. Welfare support rose 50% as well from $32 billion to $48 billion. Unemployment costs have increased 32% over the past four years, despite the record-low unemployment rate. The US spent $53 billion on educational pandemic aid and $71 billion to help failing PBGC plans. The CBO now foresees a federal budget deficit of $1.4 trillion in 2023, and this number is expected to rise. 

Biden’s Build Back Better Act pushed for the largest welfare spending in US history. It pays NOT to work in Biden’s America. According to the Heritage Foundation: 

"Total government spending on the average poor family will rise from $65,200 per year to more than $76,400. When limited private earnings are added to this massive government spending, combined total resources will reach nearly $94,600 per year for the average poor family."

Biden repealed some of the reforms issued by the Clintons to boost reliance on government aid. People who choose not to work are eligible for unconditional cash grants funded by working taxpaying citizens. “Taxpayers would be required to pay larger sums to support welfare recipients, but recipients would have no reciprocal obligations,” the Heritage Foundation continued. Those who decide to marry receive less funding. Mothers who have children by multiple fathers receive more funding. Traditional values are punished. Why rely on family when you have the government? 

Some states pay six figures to “low-income” families through benefits and subsidiaries. A family earning nearly a quarter million per year could still qualify for ObamaCare subsidies, and in some states, families earning $300,000 annually still qualify. Unemployment benefits plus ObamaCare subsidies for a family of four are equivalent to the national median income in 24 states. Some states offer more than others. In New Jersey, a family of four can receive benefits up to $108,000 even if no one is working.  

Welfare was supposed to be a tool to help people during times of need. It should incentivize people to get back to work. Biden is giving your money to foreign countries. He is giving your money to US citizens who chose not to work. This is clearly socialism at play, as it does not pay to work in Biden’s crumbling America. 

Mar 30 2023

Meanwhile, The Petrodollar Just Got Smaller Today as The First LNG Shipment Between UAE and France Is Traded in Yuan


Posted originally on the CTH on March 29, 2023 | Sundance 

Two major energy trade developments today highlight how the Western Alliance is quickly losing a grip on the world energy market, as an alliance between China, Russia, Iran and the Middle East Gulf Cooperation Council starts to take shape with actual trade exchanges that are not in dollars.

Last year, in response to big panda’s own interest and seeking to exploit two western alliance self-created weaknesses; (1) sanctions against Russia and (2) weakened investment in LNG production; China spearheaded the Shanghai Petroleum and Natural Gas Exchange.

The exchange was aimed at group purchasing services for liquefied natural gas (LNG) though the use of the yuan to replace the dollar.  Essentially, team Gray operating without the global trading system of team Yellow (map).  The Shanghai exchange allows purchases of LNG portions by small and medium-sized buyers in yuan.

Today, CHINESE national oil company CNOOC and France’s TotalEnergies have completed China’s first yuan-settled liquefied natural gas (LNG) trade through the Shanghai Petroleum and Natural Gas Exchange, the exchange said on Tuesday (Mar 28).

Approximately 65,000 tonnes of LNG imported from the UAE changed hands in the trade, it said in a statement. TotalEnergies confirmed to Reuters that the transaction involved LNG imported from the UAE but did not comment further. (read more)

This exchange between the UAE and France is taking place without dollars. If the process continues the dollar weakens.  In the geopolitical world of currency valuations and trade, this might be considered the Archduke Ferdinand moment for the end of the petrodollar.  The question will become, can they grow this process with OPEC+ support and begin eventually trading oil in yuan?

A second energy targeted development comes from a shipment of Russian diesel fuel into Mexico.  The raw material was: (A) sold at an originating discount; and (B) presumably refined in Spain, making it exempt from the current energy embargo against Russia.

(READ ARTICLE)