By Brandon Smith
The decline of a currency’s world reserve status is often a long process rife with denials. There are numerous economic “experts” out there that have been dismissing any and all warnings of dollar collapse for years. They just don’t get it, or they don’t want to get it. The idea that the US currency could ever be dethroned as the de facto global trade mechanism is impossible in their minds.
One of the key pillars keeping the dollar in place as the world reserve is its petro-status, and this factor is often held up as the reason why the Greenback cannot fail. The other argument is that the dollar is backed by the full force of the US military, and the US military is backed by the US Treasury and the Federal Reserve – In other words, the dollar is backed by…the dollar; it’s a very circular and naive position.
These sentiments are not only pervasive among mainstream economists, they are also all over the place within the alternative media. I suspect the main hang-up for liberty movement analysts is the notion that the globalist establishment would ever allow the dollar or the US economy to fail. Isn’t the dollar system their “golden goose”?
The answer is no, it is NOT their golden goose. The dollar is just another stepping stone towards their goal of a one-world economy and a one-world currency. They have killed the world reserve status of other currencies in the past, why wouldn’t they do the same to the dollar?
Globalist white papers and essays specifically outline the need for a diminished role for the US currency as well as a decline in the American economy in order to make way for Central Bank Digital Currencies (CBDCs) and a new global currency system controlled by the IMF. I warned about this years go, and my position has always been that the derailment of the dollar would likely start with the end of its petro status.
The rise of Mohammed Bin Salman (in Saudi Arabia) was backed by the Public Investment Fund (PIF), a fund comprised of trillions of dollars supplied by globalists within Carlyle Group (Bush family, etc.), Goldman Sachs, Blackstone and Blackrock. MBS garnered the favor of the globalists for one specific reason – He openly supported their “Vision For 2030”, a plan for the dismantling of “fossil fuel” based energy and the implementation of carbon controls. Yes, that’s right, the head of Saudi Arabia is backing the eventual end of oil based energy, and part of that includes the end of the dollar as the petro currency.
In exchange for their cooperation, the Saudis are being given access to ESG-like funding as well as access to AI advancements and the so-called “digital economy.” It sounds crazy, but there is much talk of AI developments to cure numerous health problems and extend lifespan. With those kinds of promises, it’s not surprising that Saudi elites would be willing to dump the dollar and even oil.
Arms deals and energy deals are becoming a mainstay of trade and this has led to a quiet but steady distancing of the Saudis from the dollar. This past week, the dominoes were set in motion for dollar collapse when Saudi Arabia announced at Davos that they are now willing to trade oil in alternative currencies.
In response, Xi Jinping pledged to ramp up efforts to promote the use of the Chinese yuan in energy deals. This falls in line with another article I wrote in 2017 titled ‘The Economic End Game Continues,’ in which I described how conflict with Eastern nations (China and Russia) would be exploited to create a catalyst for the end of the dollar’s petro status.
The importance of the Saudi announcement cannot be overstated; this is the beginning of the end of the dollar. The dollar’s world reserve status is largely dependent on its petro-status. Without one, you cannot have the other. This is almost the exact same dynamic that led to the implosion of the British Sterling decades ago as the global petro currency which resulted in the rise of the dollar to take its place.
This time, though, it will not be a single foreign currency that takes on the role of world reserve, it will be a basket currency system controlled by the IMF called Special Drawing Rights, along with a single global digital currency that is yet to be named but is now under development.
The consequences of the loss of reserve status will be devastating to the US economy. It is the only glue holding our system together – The ability to defer inflation by exporting it overseas is a superpower only the US enjoys. The Fed can print money perpetually if it wants to in order to fund the government or prop up US markets, as long as foreign central banks and corporate banks are willing to absorb dollars as a tool for global trade. If the dollar is no longer the primary international trade mechanism, the trillions upon trillions of dollars the Fed has created from thin air over the years will all come flooding back to the US through various avenues, and hyperinflation (or hyperstagflation) will be the result.
This dynamic is already in play, as foreign holders of US debt and dollars have been dumping them at record pace since 2017. The process continues at a time when the Federal Reserve is cutting it’s balance sheet and raising interest rates, which means there is no longer a buyer of last resort.
This may be why multiple foreign central banks have renewed their purchases of gold reserves and are once again stockpiling precious metals. They seem to be well aware of what is about to happen to the dollar, while the American public is kept in the dark.
The effects of the decline of the dollar may not be immediately felt, or become obvious for another year or two. What will happen is consistent inflation on top of the high prices we are already dealing with. Meaning, the Federal Reserve will continue to hold interest rates higher and prices will barely budge or they may climb in spite of monetary tightening. Even in the face of a major recessionary contraction, which I predict will be triggered starting in April, prices will STILL remain higher.
This is wonderful news!
Indeed. It’s just a matter of time now.