VIEWS: 2 PAGES: 2 POSTED ON: 2/25/2012
It's all about the US Dollar. Iran's threat isn't nukes; Iran's threat is the EURO. Interesting that Israel’s (the UK's, USA's etc) deadline for Iraq coincides exactly with Iran's opening of it's own Oil Bourse (trading exchange) that's completely denominated in Euros. The exchange will complete head-on with the NYMEX and the EURONEXT exchanges. Not good for the US $. To find the enemies of the US, look to those who have completely abandon US Dollars for oil and only accept Euros for payment for oil. (North Korea, Iraq - just before our invasion, Iran.) To find where tensions are strained between the US and other countries, look to those who recently began accepting some level of Euros for oil payments. (Russia, China. Venezuela always threatening) The dollar is built on one thing and one thing only, a belief. With no belief there are no investors. With no investors there’s no one to cover our deficit. With no investors to cover that deficit…poof…the economy comes tumbling down. King Fahd is dead and that leaves only one ally within the royal family, Prince Abdullah. He ain’t gonna live-forever. He’s also sewn to the Bush family’s hip. When Bush leaves in 2008, expect subtle, yet consistent, changes. Sure it’s great that Reagan made the Saudi’s keep 1 trillion in the US, but when push comes to shove they’ll bolt in a heartbeat. When the Saudi’s sneeze, the US catches a cold. When they get really ill, look out below for the US Dollar. I find it interesting that in the history of mankind there isn’t a single government that hasn’t abandon a currency when it reached 1% of its original value. The scenario usually goes like this: once the currency gets to 10% of its original value the government borrows everything it can against it. Once it gets to 1% it abandons it and leaves those holding the bonds etc up-a-creak. In 1984, the US dollar hit 10% of its original value. In 1984, our borrowing against the dollar began escalating and hasn’t let up. In 2005 the US dollar is valued at 4.3 % of its original value. It’s on schedule to hit the magic 1% in 2009. mmmmmm. The US will defend its currency to the last drop. Don’t get me wrong, you won’t wake up the day after the dollar hits 1% of its original value and see the government announce that fact, then abandon it. No no no. It will happen very slowly and very painfully and will last over the course of about 4/5 years. My take is that they’ll do several devaluations first, each time sending the holders of our debt screaming and threatening etc. Then after years of this, say about 2014, they’ll abandon it. That’ll be the bottom. Exactly the time everyone panics. They always panic at the bottom. The world we see today will look much different then. These times, albeit chaotic, will seem mellow compared to what lies ahead. So, keep your eye on the Euro for dollar story and you’ll be able to follow the plight of the US economy. Who’s asking for Euros for their oil? Who’s asking for dollars? Take care, Jim Goulding www.jamesgoulding.com
"It about the Euro"