Sunday, April 12, 2015

WHAT IF THE AMERICAN DOLLAR FAILS INTERNATIONALLY?


WHAT HAPPENS AFTER THE COLLAPSE? You need to know about these 3 media blackouts



by Don Hank

Regarding geopolitics, economics and finance, and US foreign policy, there are three key developments that almost all media outlets, including independent web sites, are ignoring. The main reason for this blackout is no doubt the fact that most of the staffs of these outlets rely on monolingual sources, while the best of them merely supplement their offerings with news from European language sources, paying little attention, for example, to the Russian-language and Asian-language press. I am not implying that they ignore English-language reports from the foreign media. However, as shown below, the English language versions of news from Asia, for example, may differ greatly from the native language versions, and this means a lot of important news is blacked out for news consumers.

Another reason is lack of interest on the part of both editors and the US public. Both parties have been taught from infancy that the US is the center of the universe, that we are the keepers of morality and righteousness and that we, and our dollar, are the masters of the universe. The rest of the world must therefore follow our lead and dissenters must be punished. Hence, events and opinions in foreign countries are of little or no interest or value except as a measure of our need to respond.
Another important factor in the blackout is politics. Neocons who rely on a public conviction of US exceptionalism to promote their wars naturally do not want you to know the opinions of foreigners. They strongly suggest that any foreign government or public that disagrees with the US government is the enemy, in keeping with GW Bush’s declaration “if you’re not for us you’re against us.” Both major political parties agree on the whole because, after all, war is the best source of their power. It is their bread and butter.
These three ignored developments are:
1) the rapid progress being made in the use of the Chinese RMB Chinese RMB (yuan) in international trade,
2) the rapid economic and financial dissociation of traditional allies from the US, as evidenced by the growing number of RMB clearing centers in Europe and Asia (as detailed in the article linked above) and by the association of the major economic powers with the AIIB (China's Asian Infrastructure Investment Bank), and the implications thereof for the US dollar; and
3) More ominously, the association of Saudi Arabia, the country that has been back-stopping the petrodollar since 1973, with this Chinese bank.
Thus, key US allies are following the money to China and will not come back. They have finally seen that there is nothing here for them. Worse, Europe still resents the consequences of its purchases of subprime mortgage junk. They are aware, if only subconsciously, that the economic debacle of 2008 was triggered by irresponsible US banking and regulatory policies and was the cause of the European malaise today. The US response has been that no one forced them to buy our junk, but they resent the fact that our evaluating agencies assigned high grades to this junk, deceiving them into buying.
This dissociation of former allies from the US suggests that dedollarization is proceeding at break neck speed and that the phenomenal growth of the RMB, coupled with the blackout of these developments in the media suggests that Americans are almost completely unprepared for the coming consequences. The silence of the financial and economic media, the general media and even most of the independent media on these issues show that we are like cattle awaiting the slaughter of our savings.
Putting my characteristic modesty aside for now, I believe I was probably the first Western analyst to warn of the rapid growth of the RII (RMB Internationalization Index) and its dedollarizing effect. This is because I have observed that most news agencies do not monitor the foreign language press, especially the Chinese-language media, which I have found do not report in their English language editions the same information that they present in their media for home consumption. This is no doubt part of their desire for harmony, a very important Confucian concept that has survived Mao's Cultural Revolution intact. Thus the reserve they show in their reporting is not so much deliberate censorship as it is a sensitivity to our sensibilities as a trading partner. Similarly, due to long standing traditions of diplomacy, the Europeans decline to state outrightly that they disagree, for example, with our virulently anti-Russian policies (I infer this, for example, from talk shows I view regularly on Deutsche Welle).
In a press conference, China's top monetary policy expert Chen Yulu stated last June that the RII, which then ranked number 9 among internationalization indices of world currencies, would soar from a ranking of number 9 at that time to number 3 in just 3-5 years (that was about a year ago, so we can make that 2-4 years).
Less than a year later we now read that Europe's major economies, BRICS, Australia and Saudi Arabia are joining the Chinese AIIB, as stated above, and turning their backs on the US-dominated World Bank, which has shifted its focus from aiding Third World development to foisting leftwing social change on lendee countries, as I have shown here.
Since monetary expert Chen Yulu was not including this momentous AIIB event in his calculations, there is a good chance that the RII will rise to 3rd place much sooner than he predicted. Americans need to be prepared and I know of no one who is coming even close to preparing them in all 3 of the key areas listed above. Far from that, major news outlets keep touting the increasing value of the USD and the US stock market.
To recap what you need to know about what is coming at you from three directions, my translation and analysis of the Chinese interview with Chen Yulu are here:
My analysis of the association of our allies with the AIIB (amounting to a rejection of the US-dominated World Bank) is here:
My analysis of the Saudis' vital role in backstopping the petrodollar (now coming to an end) is here:
These analyses show that China and Saudi Arabia control US foreign policy (in part by controlling our allies) in unseen ways that few or no Western geopolitical analysts are reporting.
All of the above-described blacking out of vital news leads to utterly failed foreign policies and uninformed investments for both households and business. I would encourage you to study these analyses and use them as a basis for personal financial decisions, and for communication with friends and family about the coming dedollarization and the course that America must take to avoid disastrous conflicts.

No comments:

Post a Comment