Christian persecution is at an historic high thanks to global rise of religious fundamentalism, most notably by radical Islam, Christian charity Open Doors has found. Persecution has seen the biggest rise in countries such as Pakistan and Eritrea where radical Islam is on the rise, but North Korea still tops the list with its systematic oppression of Christians.
Essentially, Paul is saying that understanding the petrodollar system and the forces affecting it is the best way to predict when the U.S. dollar will collapse.
Paul and I discussed this extensively at one of the Casey Research Summits. He told me he stands by his assessment.
This is critically important. When the dollar loses its coveted status as the world’s reserve currency, the window of opportunity for Americans to protect their wealth from the U.S. government will definitively shut.
At that point, the U.S. government will implement the same destructive measures other desperate governments have used throughout history: overt capital controls, wealth confiscation, people controls, price and wage controls, pension nationalizations, etc.
The dollar’s demise will wipe out the wealth of a lot of people. But it will also trigger political and social consequences likely to be far more damaging than the financial fallout.
The two key takeaways are:
- The U.S. dollar’s status as the premier reserve currency is tied to the petrodollar system.
- The sustainability of the petrodollar system relies on volatile geopolitics in the Middle East (where I lived and worked for several years).
The geopolitical sands of the Middle East are rapidly shifting.
Saudi Arabia’s strategic regional position is weakening. Iran, which is notably not part of the petrodollar system, is on the rise. U.S. military interventions are failing. And the emerging BRICS countries are creating potential alternatives to U.S.-dominated economic/security arrangements. This all affects the sustainability of the petrodollar system.
I’m watching the deteriorating relationship between the U.S. and Saudi Arabia with a particularly close eye.
The Saudis are furious because they don’t think the U.S. is holding up its end of the petrodollar deal by more aggressively attacking their regional rivals.
This suggests that they might not uphold their part of the deal much longer, namely selling their oil exclusively in U.S. dollars.
The Saudis have even suggested a “major shift” is under way in their relationship with the U.S. To date, though, they haven’t matched their words with action, so it may just be a temper tantrum or a bluff.
The Saudis need an outside protector. So far, they haven’t found any suitable replacements for the U.S. In any case, they’re using truly unprecedented language.
This situation may reach a turning point when U.S. officials start expounding on the need to transform the monarchy in Saudi Arabia into a “democracy.” But don’t count on that happening as long as Saudi oil sells exclusively for U.S. dollars.
Regardless, the chances that the Kingdom might implode on its own are growing.
Today, another paradigm shift seems inevitable. As Ron Paul explained, there’s one sure way to know when that shift is imminent:
We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or euros.
It’s very possible that, one day soon, Americans will wake up to a new reality, just as they did in 1971 when Nixon severed the dollar’s final link to gold.
The petrodollar system has allowed the U.S. government and many U.S. citizens to live way beyond their means for decades. It also gives the U.S. unchecked geopolitical leverage. The U.S. can exclude virtually any country from the U.S. dollar-based financial system…and, by extension, from the vast majority of international trade.
The U.S. takes this unique position for granted. But it will disappear once the dollar loses its premier status.
This will likely be the tipping point…
Afterward, the U.S. government will be desperate enough to implement capital controls, people controls, nationalization of retirement savings, and other forms of wealth confiscation.
The simple reality is that Israel and the United States are long-standing friends and allies in an increasingly dangerous world – and we ought to treat each other as such. From an American perspective, Israel has proven itself to be an exceptionally capable, resourceful and valuable ally to the United States in a very important and treacherous region. We share many fundamental interests, and we face enemies that wish to do both countries harm. Just as importantly, we share core values and we therefore wrestle with many of the same questions – about how to keep our people safe from the forces of terrorism that seek our destruction while preserving our respective democratic freedoms, rule of law, and respect for fundamental and eternal human rights, which define who we are.
Should Clinton become president, it is safe to assume that she will disregard Petraeus’ advice and employ the same destructive policies championed by her predecessor, placing the final nail in the coffin of an alliance that has endured for 68 years and causing tremendous harm to the interests of two great democracies. Let’s hope it doesn’t come to that.