Will Petro Gold Replace the Petro Dollar? - kitco.com
“Obama’s Goal: Assure Saudis As Paths Split.” That was a front-page headline in today’s New York Times. The article started out stating, “Over seven decades, the United States and Saudi Arabia forged a strategic alliance that became a linchpin of the regional order.” What I would say to that statement is that the alliance was not only a linchpin of the regional order but also the global order, with the dollar being backed by America’s military order, which enabled it to essentially back the world’s reserve currency with oil.
With gold detached from the dollar by Nixon in 1971, Kissinger managed to use the strong arm of the U.S. military and strong armed diplomacy to save what would become an increasingly fraudulent dollar without gold. The establishment was even able to convince Wall Street that the petro dollar was better than gold. And indeed it has been better for the U.S. in the sense that without any limit placed on dollar creation, the U.S. has been able to live beyond its means for all those seven decades. Not only has it meant that Americans could borrow money to buy goods from China and other countries but it also meant that there has been virtually no limit on the amount of resources that can be stolen from the American people and other citizens around the world to fund the U.S. military and its exploits around the world to expand the Anglo-American empire.
But alas, the U.S. Military Industrial Complex has abused its license to steal to such an extent that Russia is now being pushed to the points where its very sovereignty is being threatened. It has no choice but to dig in its heels and fight for all it has, if it wants to avoid being sucked into NATO. And there is little doubt in my mind that China will in the end side with Russia. Indeed there is a move on the part of the BRIC countries now to set up their own banking system and to commit the cardinal sin from the U.S. point of view—namely, to use currencies other than the dollar for trade. These countries have also been pushed in the direction of setting up their own financial system by the U.S. when it has tried to seal off Iran’s trade by kicking them out of the existing international payments system. With Iran being a trade partner of Russia and China, that resource-rich country also becomes a part of the emerging alliance to oppose the imposition of NATO and the demise of their sovereignty.
In my radio interview of March 28, 2014 with David Jensen that has been posted at JayTaylorMedia.com ( http://jaytaylormedia.com/media/taylor20140328.mp3 ), David explains how recent moves on the part of China to establish a gold trading exchange in a trade free zone are likely being set up to enable Russia to sell its gas to China in exchange for yuan, which can then be exchanged for gold. This seems to be a highly logical evolution back toward honest money, because the dollar is certainly on a pathological course. The U.S. is broke. It has to continue to gobble up new countries and gather cheap raw materials to fund excessive consumption in the U.S. But the U.S. may now be running out of global turf to gobble up.
But the main point that needs to be made as far as how we protect our personal interests in light of these major geopolitical forces is that if Jensen is right about what is about to take place, then the real price of gold relative to the dollar is headed for a moon shot. The global monetary system will require a gold price many, many times higher than its current price to accommodate global trade. I truly believe we are on the verge of a bull market in gold that will shock even the most zealous of gold bugs. |
