The 1944 Bretton Woods international monetary system as it has developed to the present is become, honestly said, the greatest hindrance to world peace and prosperity. Now China, increasingly backed by Russia—the two great Eurasian nations—are taking decisive steps to create a very viable alternative to the tyranny of the US dollar over the world trade and finance. Wall Street and Washington are not amused, but they are powerless to stop it…Now, ironically, two of the foreign economies that allowed the dollar an artificial life extension beyond 1989—Russia and China—are carefully unveiling that most feared alternative, a viable, gold-backed international currency and potentially, several similar currencies that can displace the unjust hegemonic role of the dollar today.
The above is an excerpt from William Engdahl’s essay, “Gold, Oil, Dollars, Russia and China.” The essay is a must-read if you want to understand how the dollar was cleverly forced on the world as the reserve currency and how it is about to be cleverly removed and replaced with a trade system that reintroduces gold into the global monetary system.
Unfortunately, the U.S. educational system presents a fraudulent account of world financial and economic history from Bretton Woods to present. Fed on a steady educational diet of U.S. propaganda, anyone raised and educated in the U.S. will wake up one day to an economic cold shower and eventual poverty unless they’ve taken the steps necessary to protect their savings (if they have any).
Let’s face it, the entire western monetary system is basically a fraud. It is privately made and privately owned, with the entire international payment system being controlled by the FED – which is totally privately owned – and the BIS (Bank for International Settlement, in Basle, Switzerland – also called the central bank of centrals banks). – from an interview with Peter Koenig, geopolitical analyst and a former staff-member of the World Bank
Without a doubt, the Russia-China led BRICS axis is working toward a “reset” of the U.S.-centric dollar reserve global currency system: “Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”
That quote was delivered by Putin at the annual BRICS summit in Xiamen, China. I don’t know how Putin could have more plainly, yet diplomatically, laid out the inevitable demise of the dollar’s status as the world’s sole reserve currency.
The news report from the Nikkei Asian Review of a gold-backed yuan oil futures contract to be traded in Shanghai was treated with predictable skepticism from the those who require an event to have already occurred in order to “see it.”
That report surfaced shortly after the BRICS summit in China. I suspect China intentionally has made the world aware of its plan to roll out this contract eventually well ahead of the actual event. China is imminently launching a yuan-denominated crude oil contract on the Shanghai Futures Exchange. Please note, for anyone skeptical of this event, that the announcement came from the vice chairman of the China Securities Regulatory Commission. I suspect that once this contract is trading smoothly with a high level of liquidity, the next logical step would be to enable the users of this contract to convert the yuan received for oil into gold. The gold-backing would be an incentive “sweetener” to use this contract instead of dollar-settled futures contracts.
A gold-backed, yuan-denominated oil futures contract makes sense certainly from the perspective that Russia and China are already settling Russian energy sales to China in yuan. They have also set up a mechanism by which Russia can convert the yuan received into gold. Furthermore, the Central Banks of Russia and China combined, are by far, the two largest buyers of gold in the world. Why else would Russia/China accumulate a massive Central Bank gold reserve other than to eventually reintroduce gold as a currency stabilizer and a trade settlement “equalizer” into the global monetary ?
Introduction of an oil futures contract traded in Shanghai in Yuan, which recently gained membership in the select IMF SDR group of currencies, oil futures especially when convertible into gold, could change the geopolitical balance of power dramatically away from the Atlantic world to Eurasia. – William Engdahl, ibid.
The consequences for America as a whole will be catastrophic. Currently the parabolic issuance of U.S. Treasury debt is funded primarily by a recycling of dollars used to settle the majority of global oil trades. Once a dollar-alternative for settling oil trades is established, the amount of dollars available to finance U.S. debt-fueled consumption will rapidly decline. But it’s the ability of the U.S. to issue debt unfettered right now that keeps the U.S. economic system from collapsing. The Fed’s printing press will be the only alternative to immediate collapse. History has shown us what the end of that pathway looks like. It’s far worse than waking up and stepping into an ice-cold shower.
The Daily Coin has published a fascinating interview with William Engdahl: Gold, China and The Deep State.
I listened to that interview yesterday and it was well worth it.
You can call this karma, blowback, schadenfreude, …whatever. When you hollow out your industrial base by offshoring production to low wage economies, so that the Wall Street gangsters can disguise their non-stop money printing to acquire all assets and financialize the economy and then, by default, allow those low-wage economies to eventually dominate and monopolize global merchandise trade, what did you think was going to happen to the currency?
Link is broken, here is :
F. William Engdahl: Gold, China and The Deep State
Yes, and gold and silver will skyrocket in dollars and rise sharply in other currencies. Got gold? You better get some.
The story about China is fake and was planted by the FED minions in Japan. The article mentioned no Chinese officials and there is nothing in the Chinese media. If you go to both the websites of the exchanges mentioned there is no mention of this either. In fact the one in Shanghai states that the new crude contract will be traded in yuan but traders can use foreign currencies to satisfy margin accounts. Folks this is not a physical crude market but is a futures market with the only difference is that yuan is used instead of dollars. These are for hedging. During a recent video by Rory Hall and David Morgan, Rory said he can find not one verification either. It seems the guy made it all up. Which he did by the way.
China is not stupid and they know this would strengthen the yuan and collapse their exports, their economy and the new silk road project. Another problem is that they know the US would convert the stronger dollar to the weaker yuan and drain their gold reserves. Still we have another problem. China has over $22 trillion in liquidity. The total amount of gold ever mined is only $7 to $9 trillion so where are they going to get the gold? Now if that is not enough this requires a country to constantly buy gold to back the new liquidity an economy needs to grow and to restock what went out the gold window. There is simply no country that can afford this at today’s prices.
Now with a limited amount of gold and the world with hundred of trillions in liquidity sloshing around no country or trade block is going to use gold as part of their monetary system. Folks this is fantasy land nonsense!
I almost was not going to post that commentary and send it to the trash, where it belongs. But I wanted anyone who reads the comments to see how stupid some people can be. No idea where you are getting your numbers or information from but you, unwittingly, point out the reason why the price of gold is going to be reset – either by the market directly or by the market indirectly by Chinese resetting the price higher, just like FDR did in 1934. Of course I’m certain you think that event was fake news too…
jj, you say there is no notice of this on their websites, how much prior notice do you supose Nixon gave about closing the gold window?
LOL – great point
Most probably If China will introduce “oil – for yuan – for gold” program , USA will expel them from Swift system and will place trade sanctions , but before that happens I think they will go to war with North Korea and then maybe with China and Russia. They not going to allow any collapse.
Expel them from the Swift system? Obviously you haven’t been paying attention to what they have been up to as they have their own version of Swift: http://treasurytoday.com/2016/05/cips-and-swift-the-payments-partnership-ttti
That along with their developments of the AIIB, Shanghai Cooperative Org., and the Belt and Road project they are now implementing their systems to continue forward with their agenda of world trade with an alternative attitude toward the exuberant privilege of the Dollar over other nations.
The hand writing is on the wall, to use an old cliché .
This past week the Saudis were in Russia signing
agreements. Most likely regarding gold for oil transaction
process’s. Then an article that stated that joint U.S. military
training with the Saudis was cancelled this week while
the Saudis met with Vladimir Putin.
The MSM will never talk about any of this. Too focused on
another false flag in Las Vegas or athletes showing disrespect
for the country. Turn off the T.V. read more blogs like this one.
Educate yourself and your children and buy gold at these sub
$1300 levels. The picture is wide screen if your willing to look.
Here is a piece of information that you might find interesting.
I’ve been purchasing PMs from APMEX since 2008; over 25 orders. Looking at the order numbers, I decided to plot them as a function of time. The slope of the data points is number of orders per day. In my data, I see two inflection points (points where the slope changes). First inflection point: Nov 2010. Second inflection point: Feb 2013. Up to the first inflection point, APMEX was averaging about 1000 orders per day. Between the first and second inflection point, APMEX was averaging 2000 orders per day. After the second inflection point, APMEX is averaging 5000 orders per day. I made a purchase last week, which filled a gap from my last order from 2 years ago. The latest order number is right on the 5000 order per day slope. Take it for what it’s worth. Those orders could be more APMEX buys than sells, but in either case they have been doing a lot of consistent business since 2013.
Order numbers probably may not correlate in a linear fashion with actual numbers of transactions. If the number of transactions is up since your last order of two years ago, it is probably buys they are making from soft hands [owners], plus an increase of sales to other dealers; a shift in their businessmodel.
For example, I have some “inside information” without exact details on PM sales from two dealers, and know sales are way down this year. But the fact that sales are down [this year] industry wide is common knowledge; underscored by low sales figures on ASE’s
I say the story is true. Time will tell, Od love to bet someone on this.
As I stated in my commentary, the average boor out there has to see an event occur before they can analyze it.
“As I stated in my commentary, the average boor out there has to see an event occur before they can analyze it.”
Did you mean emotionally react to it? lol…or not?
Well, I will keep buying gold.
But my mood has finally changed. I believe our “financial masters” are firmly in control…
So, I don’t expect anything before a long long time…
I also wonder if the Yuan oil contract is really coming over the next several weeks. I say that because in 2015 there were several articles from reputable news agencies claiming that the Yuan oil contract was expected in 2015. I’m not saying the Yuan contract is not on the near horizon..only that I’ve seen this claim before.
Article from 2015
Article from 2017
Dave you should post this podcast on Bitcoin it a real eye opener.
I’m wondering how this new oil for gold procedure is any different from the situation that exists today. If an entity sells oil for dollars as they do today, can’t they just exchange the dollars received for gold on the open market? How does the new contract from China change anything? Perhaps the Chinese gold exchange dealing only in physical gold is the difference? That would explain all of the other developments that China has implemented in recent years such as the large increase in their reserves and the opening of the physical gold exchange in China.
Lovely piece, I think the reason the fiat, oild, gold trade is treaded on so carefully is the Iraq Euro oild deal. Europe ofcourse supported that deal and thus did not support the American war on Iraq (unlike any other war America started). I think China wants to be very sure all major players are on board before this happens and I would think a ”nice financial crisis” might be a good excuse to hit two flies with one swath. It being, a good excuse to launch this reserve currency breaking act without much attention and a good excuse and two, America’s attention (including popular opinion) is focussed on different things, no money for war, money for the crisis.
I do think financial officials tend to publicly warn of a crisis coming. Maybe even helping to create one by stating that but lets not delve into that. Today the head of the Dutch central bank warned of a crisis coming and all MSM outlets picked it up.
Let me translate the starting of one of the main MSM outlets in Holland. If you want I can translate it all and yes, he also talks about your other favorite subject Dave, housing and how that is unsustainable as well (smile).
Financial markets, like stock markets, are moving almost up almost constantly and big swings in it are almost extinct. That situation will not last says Klaas Knot, head of the Dutch central bank
As far as Iam concerned another dot.
In the past one of the main things supporting the dollar after Nixon severed the gold tie was the fact that the Saudis would only accept dollars for their oil. Therefore other nations needing oil were forced to procure dollars to buy oil. The new Chinese plan substitutes Yuan for dollars, and by listing gold on the same exchange China has one stop shopping for oil to Yuan to gold. This will result in less dollar demand and a higher gold price.