Dollars, Dollars, Everywhere, and Not a One Worth Squat

Recall the hullabaloo resulting from Iran's announcement last summer that they were going to start an Iranian oil bourse (exchange) to conduct oil trade in Euros instead of US Dollars.

Iraq had infamously done this before and had suffered invasion. The conquering US immediately reversed the Iraqi policy.

The fate of the Iranian oil bourse became unclear as deadlines passed and contradictory statements were made. The threat seemed to lose its potency and the issue faded back into the desert sands.

Now comes Bush's soul mate Putin ("I looked into his eyes and saw his soul" to paraphrase Bush the seer) with a similar concept and the power to pull it off.

It is critical to American hegemony for the USD to remain the petro-dollar. A petro-ruble or a petro-euro would not do. Although I have seen some discussion of how devastating this change would be for the US, the consensus seems to be that the War in Iraq was launched in part to prevent the potentially devastating demise of the petro-dollar.

But boy-howdy, it looks like that former KGB soul mate may be on his way to creating competition for the Almighty (world reserve currency) Dollar.

Mike Whitney reports:

"On May 10, Russian President Vladimir Putin ignited a firestorm that is bound to sweep across the global economy. In his State of the Nation speech to parliament,, he announced that Russia was planning to make the ruble internationally convertible so that it could be used in oil and natural gas transactions. Presently, oil is denominated exclusively in dollars and sold through the New York Mercantile Exchange (NYMX) or the London Petroleum Exchange (LPE) both owned by American investors. If Russia proceeds with its plan, the ruble will go nose to nose with the dollar on the open market sending several billions of surplus greenbacks back to the United States. This could potentially send the American economy into freefall; triggering a deep recession and an extended period of hyper-inflation.

Currently, the central banks around the world carry large stockpiles of dollars to use in their purchases of oil. This gives the US a virtual monopoly on oil transactions. It also forces reluctant nations to continue using the dollar even though it is currently underwritten by $8.4 trillion national debt.

Putin's plan is similar to that of Iran, which announced that it would open an oil-bourse (oil exchange) on Kish Island in two months. The bourse would allow oil transactions to be made in petro-euros, thus discarding the dollar. The Bush administration's belligerence has intensified considerably since Iran made its intentions clear. In fact, just yesterday, Secretary of State Condi Rice said that "security guarantees were not on the table" regardless of any Iranian commitment to stop enriching uranium. In other words, Washington will not provide Iran a non-aggression pact whether it follows UN Security Council guidelines or not.

Surely, this is a sign that Uncle Sam is on a fast-track to war. (Empahsis mine.)

The United States must protect its dollar-monopoly in the oil trade or it will lose the advantage of being the world's reserve currency. As the reserve currency, the US can maintain its towering $8.4 trillion national debt and $800 billion trade deficit without fear of soaring interest rates or hyper-inflation. Trillions of greenbacks are constantly circulating in oil transactions just as hundreds of billions are stockpiled in foreign banks. In effect, the Federal Reserve is issuing bad checks with every dollar printed on the assumption that they will never reach the bank for collection. So far, they've been right, and as the price of oil continues to skyrocket, the Fed just keeps cheerily printing more worthless paper sending it to the 4 corners of the earth. Regrettably, if Russia or Iran goes ahead with their conversion plan, then the bad checks will flood back to their source and precipitate a meltdown.

America's economic supremacy depends entirely on its ability to compel nations to make their energy acquisitions in greenbacks. If the flaccid dollar is not linked to the world's most vital resource, then banks will dump it overnight. This extortion-racket is the system we are defending in Iraq, not democracy. It is a huckster's scam designed to perpetuate American debt by forcing worthless currency on the developing world.

In a recent article by Dave Kimble, “Collapse of the petrodollar looming", the author provides the details of Russia’s importance to the world oil market.

“Russia's oil exports represent 15.2% of the world's export trade in oil, making it a much more significant player than Iran, with 5.8% of export volumes. Russia also produces 25.8% of the world's gas exports, while Iran is still only entering this market as an exporter. Venezuela has 5.4% of the export market.

Obviously, it is not in Russia’s interest to trade with its European partners in dollars any more than it would be for the US to trade with Canada in rubles. Putin can strengthen the Russian economy and improve Russia’s prestige in the world as an energy superpower by transitioning to rubles. But, will Washington allow him to succeed?

A growing number of nations are now focusing on the empire’s Achilles’ heel, the dollar. Venezuela, Russia, Norway and Iran are all threatening to move away from the greenback. Is this a spontaneous uprising or is it a new type of asymmetrical warfare?

Whatever it is, Washington is bound to be reeling from the affects. After all, war maybe possible with Iran or Venezuela, but what about Russia? Would Bush be stupid enough to risk nuclear Armageddon to protect the drooping dollar?

The administration is exploring all of its options and is developing a strategy to crush Putin’s rebellion. (This may explain why Newsweek editor and undeclared spokesman for the Council on Foreign Relations (CFR), Fareed Zacharia, asked his guest on this week’s “Foreign Exchange” whether he thought Putin could be “assassinated?!? Hmmm? I wonder if we’ll hear similar sentiments from Tom Friedman this week?)

The Council on Foreign Relations (CFR), the secretive organization of 4,400 American elites from industry, finance, politics, media and the military (who operate the machinery of state behind the mask of democracy) has already issued a tersely worded attack on Putin (“Russia’ Wrong Direction; Manila Times) outlining what is expected for Russia to conform to American standards of conduct. The missive says that Russia is headed in “the wrong direction and that “a strategic partnership no longer seems possible. The article reiterates the usual canards that Putin is becoming more “authoritarian” and “presiding over the rollback of Russian democracy”. (No mention of flourishing democracy in Saudi Arabia or Uzbekistan?) The CFR cites Putin’s resistance to “US and NATO military access to Central Asian bases (which are a dagger put to Moscow’s throat) the banishing of Washington’s “regime change NGOs from operating freely in Russia (“Freedom Support Act funds) and Russia’s continued support for Iran’s “peaceful development of nuclear energy”.

America has never been a friend to Russia. It took full advantage of the confusion following the fall of the Soviet Union and used it to apply its neoliberal policies which destroyed the ruble, crushed the economy, and transferred the vast resources of the state to a handful of corrupt oligarchs. Putin single-handedly, put Russia back on solid footing; taking back Yukos from the venal Khordukovsky and addressing the pressing issues of unemployment and poverty-reduction. He is a fierce nationalist who enjoys a 72% approval rating and does not need the advice of the Bush administration or the CFR on the best path forward for his country.

The US has purposely strained relations with Russia by putting more military bases in Central Asia, feeding the turmoil in Chechnya, isolating Russia from its European neighbors, and directly intervening in its elections.

When the G-8 summit takes place next week, we should expect a full-throated attack from the corporate media on Putin as the latest incarnation of Adolph Hitler. Watch the fur fly as the forth estate descends on its newest victim like feral hounds to carrion. (Putin’s announcement that Russia would be converting to rubles HAS NOT APPEARED IN ANY WESTERN MEDIA. Like the Downing Street Memo, the firebombing of Falluja, or the “rigged 2004 elections, the western “free press scrupulously avoids any topic that may shed light on the real machinations of the US government)

Putin’s challenge to the dollar is the first salvo in a guerilla war that will end with the crash of the greenback and the restoration of parity among the nations of the world. It represents a tacit rejection of a system that requires coercion, torture and endless war to uphold its global dominance. When the dollar begins its inevitable decline, the global-economic paradigm will shift, the American war machine will grind to a halt, and the soldiers will come home. Maybe, then we can rebuild the republic according to the lost values of human rights and the rule of law. Putin’s plan is set to go into effect on July 1, 2006.


On a different topic:

I hope you've been taking advantage of the "correction" in the price of gold and silver to fortify your holdings. For you procrastinators, there is still time as the precious metals slowly climb back (and will soon surpass their former highs).

You Will Start Watching YouTube

Back in the '70's I used to teach film and video at the Western States Film Institute. I was always yakking about the coming digital revolution - that some day "real soon" people would be picking up their own cameras and creating meaningful content. That day has come. (I really didn't think it would take 30 years.)

YouTube.com has become the de facto repository for such efforts. Over 6000 videos are being uploaded there every day. Google tried with Google Video, but the interface (special viewer) and posting requirement were onerous. YouTube even went a step further and enabled embedding of linking code in other sites. Kinda viral, and very brilliant.

At first the YouTube postings were real lame. Soulful kids in front of their webcams being all emo and stuff. Weird dog clips. Hurtful boarder accidents. Lots of Japanese anime. Some pure junk.

But now creative good stuff is beginning to emerge. Remember the "desktop publishing" revolution that produced at ton of crap at first, then gave way to talent and creativity? This new "video publishing" revolution is going through the same unfolding.

Interesting features at YouTube include near instantaneous posting - without review. (Google's review took days.) The poster is responsible for the content and the copyright considerations. They also have a built-in rating system and view counter. Easy to find the good stuff that's bubbling to the surface. Professional producers and directors are using it for exposure. Even good ads make it to the top.

And this is no small audience. A recent comic vidi (my term for these short videos, borrowed from "A Clockwork Orange") entitled "The Evolution of Dance" has been viewed 25,325,048 times so far.

Recently I saw a broadcast TV executive make a bold prediction that "it would be a long time before people are watching TV on their computers." Harharhar. These guys are so dumb. Like the music "industry", they are stuck in yesterday while the streaming broadband internet leaves them behind.

YouTube is the embodiment of Web 2.0. User created content, viral distribution, no impediments to ease of use... just slick, damn slick.

I'll be "embedding" some of the better vidies that I find on this site, as a respite from the usual topics of gloom and doom. Hope you enjoy them.

This Really Works

You've probably been spammed more than once with bogus invitations to "make money on the internet - earn money online by taking surveys." Yeah, sure.

But, there is one that really works. I know because I've signed up and earned $108 so far. Not a huge amount, but nonetheless a steady stream. Once registered, and once you have taken their introductory survey, you will receive occasional invitations to take a particular survey. After answering a few qualify questions, you take a short (sometimes as much as 15 minutes) survey about telecommunications or other retail products. You will not be spammed as a result of your survey taking, and I've detected no misuse of email addresses or other bothersome side effects.

Some surveys will add $10 to your account. Others as little as $2 or as much as $50. Even if you do not qualify for a particular survey, you will be placed in a pool for a chance to receive a random "prize" of $10. An additional benefit is that if you sign up others, you continue to benefit when they complete surveys. For example, if you follow this link, and sign up, I will receive $2 every time you take a survey. You can do the same, add referrals, and make more money when they take surveys.

Soooo, try it out, and make money taking surveys online. For real.

Fresh Analysis of Peak Oil and Declining Dollar

Earth's Land Mass (turned on its side for emphasis)

Red dots = oil

Blue dots = gold

Does it seem strange to you that all of the oil is in one-half of the planet? Read Rob Kirby's astute analysis. It may stand you on your head.

Financial Advice Comes in Many Forms

Be sure to click on the MP3.

Thanks to FreeMarketNews.com

Continental United States

Remember my fantasy from the 1970’s that Canada, the USA and Mexico should form one big collection of States into The USNA? Well, others seem to be working on that idea. Check out the new vertical transcontinental highway which appears to be going to be built across your country. How many illegal aliens can you fit into an 18-wheel container?

Who Killed the Electric Car?

Oh yeah, I remember that.

http://www.apple.com/trailers/sony/whokilledtheelectriccar/trailer/

Back in Time

Sometimes you have to repeat yourself.

Some of my friends, including the guy who said this blog was "nothing but bad news that I can't do anything about”, are now asking, "Okay, suppose you are right, what am I supposed to do?"

1. Start reading. Educate yourself with Google. Subscribe to newsletters and news feeds. I strongly recommend that you get “The Daily Reckoning”. I’ve been reading it for years and I think the contributors are very perceptive. I fact, I just signed up for Doug Casey’s newsletter on gold and silver investing.

2. Buy some CEF stock. This Canadian company does nothing but hold gold and silver. You own the stock, not the metal. Check its trend and buy if it dips.

3. Buy GLD stock. This is a fund that tracks the exact price of gold - each share = 1/10 of the price of an oz. of gold. Buy SLV stock - each share = 10 oz. of silver.

4. Buy some gold or silver Eagles – 1 oz coins produced by our Mint. Very beautiful. Go to your local coin dealer - in Denver that would be Rocky Mountain Coin on Broadway. If you don't have a local coin dealer you can do it all on the internet, phone and mail. Go to http://www.kitco.com/. Put them in a safe, or safe deposit box (but be mindful of the previous confiscations).

And speaking of educating yourself - start by clicking on the movie below - very easy to take explanation of how and why you are getting screwed every minute of every day (maybe that could explain your crankiness lately) by the so-called FED.