Posted originally on Aug 19, 2025 by Martin Armstrong |
COMMENT: Mr. Armstrong, I just wanted to thank you for participating in our board meeting. We had come to the same conclusion that all of this talk of BRICS and de-dollarization was being promoted by people in the conspiracy category, lacking any honest experience in international commerce. Before the meeting, we called one, and our Chairman listened. They could not answer any real economic question. The claims that this is the end of dollar hegemony only exposed their lack of expertise.
Trump’s tariffs, Biden’s sanctions, and the freezing of Russian assets were all supposed to kill the dollar as Russia, China, India, Brazil, and South Africa were to construct parallel financial systems as if they would no longer sell to the United States. Then there was the mention of backing by gold. Our chairman was very impressed that you could answer every question. You pointed us in the right direction with common sense and your real-world experience.
Thank you once again. As you said, us is about one third of the entire world consumer market, and global financial transactions to IPO are predominantly in dollars. Our Chairman will be at your WEC personally this time.
SFD
ANSWER: Thank you. Because this is such an important topic and I do not have the time to attend every board meeting internationally, I thought it best that I lay out the gist of our discussions. Your company is in the global business, and it is pathetic how the majority of these people preach the same nonsense without understanding world commerce. The US dollar’s dominance in international finance is clear despite BRICS, but its share varies across different areas. Before World War II, countries issued their debt in British pounds in order to sell it in London.
U.S. Multinational Dominance: U.S. companies earn massive profits overseas. This is the PRIMARY reason why these analysts do not understand world commerce. Apple, Microsoft, and Pfizer all generate more than 50% of revenue abroad. In 2022, U.S. multinationals earned $1.6 trillion from foreign affiliates (BEA data). Then there is the Intellectual Property (IP) and Services such as our firm with offices around the world. The US is a net exporter of IP, royalties, and high-value services (e.g., Google’s ad revenue abroad).
The US traditionally runs a goods deficit (manufacturing) of $1 trillion/year but a services surplus of $300 billion if we look at the accounting based on the ownership of companies rather than location, US overseas affiliate sales ($6 trillion/year) dwarf foreign affiliate sales in the US ($4.5 trillion/year). Now throw in the net IP receipts ($100 billion surplus), the U.S. likely shows a net Trader Surplus on an ownership basis.
When combined with services, IP, and overseas profits, the overall balance shifts to a surplus. The US benefits disproportionately from globalized production because its firms capture value through branding, R&D, and IP—elements obscured by traditional trade metrics. This highlights why trade deficits alone are an incomplete measure of economic health. Looking at the ownership-based accounting better reflects where value is captured in global supply chains. I have argued this in Washington, but it goes in one ear and out the other.
Global Trade Invoicing & Settlement (Primary Focus):
Approximately 40-50% of all global trade (exports) is invoiced in US dollars. This means the prices of goods traded internationally are set in dollars, regardless of the countries involved. Over 80% of global trade finance (letters of credit, etc.) is conducted in dollars!!!!! Around 88% of global foreign exchange (FX) transactions involve the US dollar on one side (according to the BIS Triennial Survey). This underpins trade settlements and makes the whole stupid argument of de-dollarization laughable, for they are mixing geopolitical with economics.
SWIFT data (payment messages) accounts for roughly 46-48% of international payment messages (by value) that are denominated in USD (as of mid-2024). This is a key indicator of actual settlement currency. Given that the latest consumer spend at the end of 2025 amounts to $55.5 trillion, of which the American consumer is now $17.9 trillion, US consumer spending accounts for 32.3% of the entire world! So, will BRICS displace the dollar? Come on. They said the same BS about the Euro. The United States is the LEAST socialist country, and that above all accounts for its Dominant Share of the world economy. Despite having only about 4% of the world’s population, the U.S. consistently accounts for nearly one-third of global consumer spending. This underscores the immense size and importance of the U.S. consumer market to the global economy and thus the dollar.
The dollar’s dominance does impact consumer spending globally because many goods that consumers buy locally are imported in other countries. If those imports were invoiced and paid for in dollars, fluctuations in the dollar’s value could affect local prices (inflation/purchasing power). This is why your key commodities like oil, metals, and grains are predominantly priced in dollars. Changes in the dollar affect the cost of energy and raw materials globally, impacting production costs and ultimately consumer prices for a vast array of goods. When the US is about 1/3rd of the world’s consumer spending and about 50% of all world trade, that is why they are priced in US dollars rather than the pesos.
The next HUGE area these one-issue analysts ignore is the Debt & Financial Markets. Countries and corporations borrowing in dollars face repayment costs affected by dollar strength, influencing their economies and potentially consumer spending power within those countries. This has often been one area that I get called into a lot. Currency Pegs/Reserves have been a critical issue over the years. Many countries manage their currencies relative to the dollar or hold significant dollar reserves, influencing their domestic monetary policy and economic stability. This includes Foreign Exchange Reserves. The dollar constitutes about 59% of allocated global foreign exchange reserves held by central banks (IMF COFER data Q1 2024).
Approximately 75-80% of emerging market (EM) external sovereign bonds are denominated in US dollars. For corporate EM bonds, the share is slightly lower, around 60-70%. As I pointed out, before World War II, EMs would issue their debt in British pounds because that was where there was a market to sell their debt. Today, the pound has been replaced with dollars, and the FINANCIAL CAPITAL OF THE WORLD is now New York – not London or Paris.
Of the Sovereign Debt issues globally (Government Issuance), that works out to be 75-80% USD-denominated (e.g., IMF, BIS, and J.P. Morgan EMBI Index data). For example, as of 2023, over 75% of EM government bonds held by foreign investors were in USD. Turn to the corporate world. There we see 60-70% USD-denominated corporate debt issues (e.g., Bank for International Settlements data). This is even higher in sectors like commodities or multinationals.
New York City is unequivocally the world’s leading global financial center, and its banks play a dominant role in key aspects of international banking. This ensures the dollar’s role in global transactions. The vast majority of international trade and finance is conducted in USD. NYC banks are at the heart of that system. On a clearing basis alone, the Clearing House Interbank Payments System (CHIPS) in NYC clears roughly $1.5 trillion daily in cross-border USD payments. That represents a massive share of global USD flows.
Then there is the Correspondent Banking network. Major NYC banks act as correspondent banks for thousands of banks worldwide, facilitating their international USD transactions. Investment Banking (Capital Markets) takes place in the heart of the NYC-based banks (Goldman Sachs, JPMorgan Chase, Morgan Stanley, Citigroup) and this consistently dominates global aspects of Mergers & Acquisitions, Equity and Debt underwriting (IPOs, bond issuances), and Sales & Trading (especially of US Treasuries, the world’s most profound and most important bond market). Even if we look at the global investment banking fee revenue, you will find that more than 50% takes place in New York City.
Europe and Britain, along with India and Switzerland, cancelled their currency. The $500 and $1,000 Canadian banknotes were withdrawn from circulation and are no longer legal tender as of January 1, 2021. However, they can still be redeemed at banks or the Bank of Canada for their face value, and they may hold additional value for collectors. Trump has proposed bringing back the $500 bill. Yet, while Roosevelt stopped issuing high-denomination bills, they are still valid. This is a MAJOR issue that the dollar remains the reserve currency around the world – it is TRUSTED!!!!!! While 60% of all U.S. bills circulate abroad, about 80% of $100 notes dominate foreign holdings due to their high value and portability.
The dollar is involved in roughly 40-50% of trade invoicing, over 80% of trade finance, and about 46-48% of international payment settlements. Research has shown that allocating world commerce according to ownership rather than location results in the US having a trade surplus, not a deficit.
The dollar remains the undisputed dominant global reserve and transaction currency, involved in the vast majority of cross-border financial flows. All of the nonsense about “de-dollarization,” with some countries (like China, Russia, Brazil) increasing the use of other currencies in bilateral trade agreements, is a distraction. Such a shift is gradual and hasn’t significantly eroded the dollar’s overall global share, and cannot until the economic changes, and that will not come until AFTER 2032.
Anyone who says the BRICS are displacing the dollar cannot possibly have any experience in world finance.
Posted originally on Aug 4, 2025 by Martin Armstrong |
QUESTION: I find it very interesting that Earth passes closest to the densest part of the Taurid stream in late October and early November, when both the Southern and Northern Taurids are active. However, 2032 is predicted to have enhanced activity due to gravitational influences from Jupiter, which can bring more debris into Earth’s path. Some have suggested that an impact of a cosmic event caused the Younger Dryas, perhaps from this Taurid stream, if the Earth were hit by a comet or asteroid impact around 12,900 years ago, which triggered the Younger Dryas that sent the planet into an abrupt cooling lasting about 1,200 years. That would be like a mega volcanic winter. If you divide 12,900 years ago by 8.6, that is precisely 1500 cycles. Since the forecast for the highest intensity in the Taurid stream is 2032, is your computer picking this up?
Jos
ANSWER: The cycle is fractal, like everything within nature. We know that the world dramatically changed about 11,000 years ago. Six waves build into 51.6 years, and six of those build into 309.6 years, with six of those creating waves of 1857.6, and 6 of those take us right to 11,145.6. This is a significant turning point. I cannot dismiss the scientific forecast for 2032, coinciding with the Taurid stream out of hand. I think we do need to pay attention and be prepared to divert such an impact if it becomes obvious. We are headed back into a cooling period – not warming. These nut jobs who want to put dust in the air to reduce global warming will kill most of humanity when a volcano of 7+ erupts on top of their dust.
Posted originally on Aug 2, 2025 by Martin Armstrong
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Posted originally on Jul 30, 2025 by Martin Armstrong
The fact that Trump is threatening sanctions against India for buying Russian oil and to hammer Russia to somehow force Putin to his knees and accept whatever terms Europe demands, proves that Trump is now taking advice from Lindsey Grachm, NATO, their puppet EU leaders, and the Neocons with the likes of Cheney in the background witgh a HUGE smile on her face.
Cuba (1960s-present): U.S. sanctions have failed to topple the Castro regime or force democratic reforms. Despite economic hardship, the government adapted through alternative trade partners and domestic resilience, suggesting sanctions can entrench regimes and slter the world economy, which has taken place with the development of BRICS. The U.S. embargo (blockade) against Cuba remains in place, requiring Congressional action to lift it entirely. While some sanctions have been eased temporarily, no administration has completely ended them. After more than 60 years, this stands as a prime example of how sanctions have NEVER worked even once.
The United States has imposed sanctions on German and other European companies involved in the construction of the Nord Stream 2 gas pipeline, which was designed to transport Russian natural gas to Europe. In 2019–2021, the U.S. sanctioned firms like Swiss-based Allseas (forcing it to withdraw) and later targeted Russian and German entities.
The U.S. imposed sanctions on the Soviet-European gas pipeline in 1982 (under Reagan), targeting Western companies supplying equipment for the Urengoy–Pomary–Uzhhorod pipeline, which supplied gas to Western Europe. The U.S. opposed this project due to concerns over European energy dependence on the USSR. They, too, failed and had to be relaxed under Allied pressure.
The Neocons, from the outset of any negotiations between Germany and Russia back in the communist days, did everything in their power to deny Germany access to Russian energy. It was 1955 when West German Chancellor Konrad Adenauer (1876-1967) visited Moscow in June and then established diplomatic relations for the first time between the new Federal Republic of Germany and the Soviet Union. The Neocons were outraged, but President Eisenhower saw it as no threat given Adenauer’s oppression by Hitler. The Necons wanted to prevent any meeting but Eisenhower declined.
Adenauer was Chancellor from 1949 to 1963. Adenauer was one of the first opponents of the leader of the Nazi Party. Konrad Adenauer helped draft a constitution completed in May 1949. He opened the door for the trade agreement that followed in 1958, and by 1960, bilateral trade between the countries was booming.
The Trade Agreement was reported worldwide by the Associated Press on April 9th, 1958 (1958.271). Even so, from the very beginning, that trade link between Germany and Russia was controversial, to say the least. The United States, at the direction of the Neocons, was always against it and would criticize Germany behind every closed-door session. However, the US intimidation failed because it was necessary for the German people and their future.
While the U.S. did not impose formal sanctions on German pipe producers in 1955–1958, it actively discouraged such trade, setting the stage for the 1960s pipe embargoes. The major crackdown came later, but diplomatic and economic pressure began in the late 1950s.
Iraq (1990s): UN sanctions after the Gulf War devastated the economy, reducing GDP by nearly 50%, but Saddam Hussein’s regime remained intact. Political change only occurred after the 2003 invasion, not sanctions alone, and civilian suffering often strengthened regime propaganda.
North Korea (2000s-present): Decades of sanctions have crippled the economy but haven’t shifted the Kim regime’s policies or structure. Black market trade and Chinese support have mitigated impacts, and the regime uses isolation to reinforce control.
South Africa (1980s-1990s): Comprehensive sanctions, including trade bans and financial restrictions, the Neocons insist, contributed to ending apartheid. However, there was already internal resistance. It still took 14 years before any democratic reforms took place by 1994. Studies estimate that the sanctions reduced South Africa’s GDP only by 1-2% annually.
Iran (2010s): Heavy U.S. and EU sanctions targeting oil exports and banking, which the Neocons insist forced Iran to negotiate the 2015 nuclear deal (JCPOA). Oil revenues dropped by over 50% from 2011 to 2013, and inflation soared, but the regime did not fall. The regime didn’t fundamentally change its political system, showing again that sanctions have NEVER even once overthrown the core governance.
FDR deliberately imposed sanctions on Japan to get them to attack the United States, all because Congress would not authorize joining World War II in Europe. That led to a Senate investigation later because it became so obvious that FDR even knew when Pearl Harbor would take place and deliberately allowed thousands to be killed just so he could enter the war. It came out that US had broken the Japanese code and knew all about the attack. There was even a lead to the press a few days before reporting that they were about to be attacked.
Before the attack on Pearl Harbor on December 7, 1941, President Franklin D. Roosevelt (FDR) imposed a series of escalating economic sanctions on Japan in response to its aggressive expansion in Asia, particularly its invasion of China. These sanctions were meant to pressure Japan into halting its militaristic actions, but ultimately contributed to the tensions that led to war.
In 1938, FDR imposed a “moral embargo” on aircraft and aviation parts sales to Japan following its bombing of Chinese civilians. This was not a formal ban but a strong discouragement of exports. Then in July 1939, FDR announced the termination of the 1911 U.S.-Japan Treaty of Commerce and Navigation, removing legal barriers to future trade restrictions. This took effect in January 1940.
Now that the door was open for sanctions, in July 1940, the U.S. restricted exports of aviation fuel, lubricants, and high-grade scrap metal to Japan under the Export Control Act. That was followed by the September 1940 complete embargo on scrap iron and steel.
Then, FDR, like the West has done to Russia, froze all Japanese assets in the U.S. (July 26, 1941), effectively cutting off trade and financial transactions. That was followed by a complete oil embargo along with Britain and the Dutch government-in-exile. Since Japan relied on the U.S. for 80% of its oil, this was a crippling blow. FDR knew that Japan would take it as an act of war, as they then saw these sanctions as an existential threat, as they crippled its ability to fuel its military and industry.
The oil embargo, in particular, forced Japan to either negotiate a withdrawal from China (which it refused) or seize oil-rich territories in Southeast Asia (which risked war with the U.S.). The sanctions contributed to Japan’s decision to attack Pearl Harbor (December 7, 1941) to neutralize the U.S. Pacific Fleet before invading British and Dutch colonies. These sanctions deliberately pushed Japan toward a desperate military confrontation, culminating in the attack on Pearl Harbor and the U.S. entry into World War II, which was the objective of FDR from the outset. The outrage was so intense that in 1945, after the war, the Senate was forced to investigate FDR’s action and whitewashed the affair, claiming they were unsure if FDR had been fully advised of the Pearl Harbor attack in advance, even though leaks made the papers in advance.
There is NOT a single incident to demonstrate that sanctions have EVER worked. Nevertheless, the Neocons constantly advise heads of state to impose sanctions, hoping that they will bring about the collapse of that government. They will not work this time either and the real risk is that they will lead to war as we saw in FDR’s actions against Japan.
Posted originally on Jul 31, 2025 by Martin Armstrong
President Trump announced a 25% on India beginning August 1 due to its continued purchase of Russian oil. “Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country,” the president posted to Truth on Wednesday morning. “Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE,” he added.
India began drastically increasing its imports of Russian crude at the start of the Russia-Ukraine war in 2022, with good reason, as the oil became significantly cheaper and India was able to resell it at a premium to nations that simply wanted to bypass all things Russia. In January 2022, India was importing around 68,000 barrels per day (bpd) in Russian crude, which represented only 0.2% of crude imports. The war broke out a month later and by June India was importing 1.12 million bpd from Russia who overtook Iraq as the nation’s top supplier. Nearly a year later in May 2023, Russian imports peaked at 2.15 million bpd, with India currently importing around 1.7 million to 2.1 million bpd as of July 2025.
Around 35% to 40% of India’s crude oil now comes from Russia. Now, Russian crude was around $50 per barrel in May 2025 when imports to India peaked. Middle Eastern grades were around $10 to $20 higher at the time. The deal was a no-brainer.
India-US bilateral trade hit $118.4 billion in 2024. India exported approximately $79.4 billion in goods to the US and imported $39 billion. The current trade deficit with the US sits at $45.7 billion. A 25% tariff could cost India billions in lost revenue from exports and threaten jobs in key sectors such as autos, chemicals, jewelry, gems, electronics, and textiles. Other Asian exporters would become more desirable, but China actually purchases more Russian crude than India at this point and other nations in the region have drastically smaller economies. Estimates state India could risk losing $15 billion to $20 billion annually as a result of the 25% tariff.
Now, if India were forced to buy from the Middle East for $10 to $20 more per barrel, the nation would need to spend around $6 to $10 billion more on energy annually. India does refine and resells Russian crude and is said to bring in around $1.5 billion to $3.5 billion from that practice.
On paper, it would seem as if India has more to lose by continuing to purchase Russian oil. However, the US is showing the world that it has the ability to dictate political policy through economic warfare. India declared that it remains committed to continuing “mutually beneficial bilateral trade” with the US after the 25% tariff was announced. The US will go after all BRICS nations in an attempt to dismantle the alliance, but BRICS members have shown that they no longer need to rely on the West, and tariffs from the US may not hold the same leverage as they once did.
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