Compelling evidence that FinancialCryptography.com is not deeply read in Washington DC arrived with this fascinating article:
Itís the biggest mystery in global finance right now: Who conducted a sneak attack on the U.S. dollar this week?
It began with a thinly sourced but highly explosive report Monday in a British newspaper: Arab oil sheiks are conspiring with the Russians and Chinese to quit using the dollar to set the value of oil trades ó a direct threat to the global supremacy of the greenback.
Is it true? Everyone from the head of the Saudi central bank to U.S. officials scrambled to undercut the story, but no matter.
Wakeup America? The collapse of the dollar was first heralded around 2001. The clue was the weaker-than-deserved crash after the dotcom era. Then, as evidence continued to pile in that the Fed was managing the US crises and economy too nicely, and the President was spending too many of the toys chasing towelheads and oil in Asia, the idea of a shift from dollar hegemony to multiple leading units went from theory to inevitability.
War Against the Dollar, the Pillar of United States Power
Whatever happens, Washington can no longer backtrack. In fact, the survival of the U.S. is menaced - not by an external enemy, but by internal economic weakness and tensions running between its communities. Many are becoming conscious of the fact that U.S. power is based upon a mirage, the dollar. These are only pieces of paper, printed when more are needed, while the rest of the world feels obliged to use them.
For the past three years, Jacques Chirac and Gerhard Schroder have engaged France and Germany in a pitiless war against the United States. They have sent emissaries world wide to convince other States to convert their monetary reserves to euros. The first to accept were Iran, Iraq and North Korea. Precisely the countries described by George W. Bush as those of the "axis of evil".
Meanwhile, Vladimir Putin has begun restoring the economic independence of the Russian Federation. He has reimbursed - ahead of time - the debts that Yeltsin had contracted with the International Monetary Fund and will also make an early repayment, before the end of the year, of the remaining debts to the Club of Paris.
That was 2003. It was reported here, not because we like poking fun at the Yanks, but because a monetary shift of this proportion is HUGE. Such a shift passes as news, except in Washington DC of course, where it's a sneak attack! The evidence in monetary terms was compelling enough to make it not only hypothesis but a clear progression; this blog reported it at least a dozen times back to 2003 (when the blog started. E.g.: 2008, x, x, x, x, The Coming Collapse of the Dollar, x, x, x, x, x, 2004).
Meanwhile, back in Washington DC, where the brightest and best are analysing this surprising development:
For American officials, the possibility of the dollar losing its long-term dominance in global commerce is a nightmare scenario because it would likely mean sharply higher interest rates at home and a declining ability to finance the U.S. debt. No one believes it could really happen right now, but stories like the British report this week make it seem incrementally more likely.
Reading the article, I get the feeling that because the report is British, it isn't credible. And Fisk, the author, is apparently a radical who consorts with Osama bin Laden. That's good news for us here in financialcryptography. That means it is not personal, the people in Washington DC don't read anything from outside their borders....
And so the USA seals its fate. With analysis like that, American policy is apparently immune from forces beyond the board, even when triggered from within.
In other news, President Obama was awarded the Nobel Peace Prize, which comes with a gold medal. Going up in value every day...
If he can save the dollar, he could be in line for another gold coin. He's probably too late this year as the Prize in Economics, in memorium of Alfred Nobel, will be awarded this Monday. But there's always next year.Posted by iang at October 9, 2009 10:34 AM | TrackBack