by Thomas Reiner, ©2024
(Jun. 22, 2024) — “I love my country but sometimes I feel my country doesn’t love me” – Author
Do you ever get the feeling that those in government and the MSM are withholding key information from you? Maybe the most important news story is not being widely reported. Two weeks ago, Saudi Arabia failed to renew a contract, in place since 1974, which made the dollar the reserve currency for oil transactions. This opens the door for oil to be paid for in Chinese RMB, Euros, Yen, Yuan, Bitcoin or maybe even carne asada burritos.
So what’s the big deal? The dollar has been the world’s reserve currency for decades. This makes America strong. This means that countries that purchase oil from Saudi Arabia must own or have an interest in dollars in order for their wheels to turn. This is one of the reasons why foreign countries have been buying American debt such as Treasuries for decades. Once those purchases start drying up, the United States government will have a more difficult time funding the seemingly infinite programs that the collusion of Congress and the Executive branches have been creating. Eventually we will purchase expensive debt to pay off current debt.
There are only three options to fix this problem. The best option is to increase US productivity, but we have already offshored our manufacturing capability to enemies such as China. There is only so much productivity enhancements we can achieve in an increasingly competitive world. The second option is to make Treasuries more attractive to investors by raising bond interest rate yields. This merely pushes debt further down the road. The last option is unthinkable but is the most likely for unaccountable politicians. The federal government has the unique power to print money and will. America, meet 1923 Germany. Then, the exchange rate between the dollar and the Mark was one trillion Marks to one dollar, and a wheelbarrow full of money would not even buy a newspaper.
We have to raise our beers and chug the contents quickly because BRICS will accelerate the loss of American influence in the world. BRICS is the collusion of several countries (currently Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates) to de-dollarize our currency in world transactions.
America is virtually and actually leaderless in 2024. The failing chess moves of the current administration have been entirely predictable. The chaotic surrender in Afghanistan led to Putin’s invasion of Ukraine which then emboldened Iran’s client, Hamas, to attack Israel. The putrid smell of 1939 wafts into every home in America. Russia, China, North Korea and Iran have created the Bride of the Axis of Evil. The invasion of Taiwan is next, and say goodbye to the ICs inside your I-phone. No I-phones might finally wake sleepy America up.
The process of weakening America is slow but it is happening. Luckily, there is still time for effective leadership to reverse course. We are inherently and morally strong but we fall asleep during good times, which are always temporary. The moral of this story is to think carefully who you vote for but the meter is running.