Washington Is Destroying American Power

Guest Post by Paul Craig Roberts

Readers at home and around the world want to know what to make of the announcement that China henceforth will conduct oil purchases and sales in gold-backed Chinese currency.

Is this an attack by Russia and China on the US dollar? Will the dollar weaken and collapse from being discarded as the currency in which oil is transacted? These and other questions are on readers’ minds.

Below is my opinion:

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The US dollar’s value depends on whether central banks, corporations, and individuals are content to hold their assets or wealth in dollars. If they are, it does not matter what currency is used to transact oil. If they are not, it does not matter if all oil is transacted in dollars. Why?
Because if they don’t want to hold dollars, they will dump the dollars as soon as the transaction is completed and move into other currencies or gold. What China is doing is creating a currency that might be a more attractive currency to hold.

It is possible that the gold-backed Chinese currency is a move against US power, but I see it differently. I see it as a protection against US power. China and Russia are disassociating from the dollar system, because Washington, in its abuse of the world currency role, uses the dollar payments mechanism to impose sanctions on other countries and to threaten them with exclusion from the payments clearing system.

In other words, Washington, instead of operating a fair system, uses its world currency role to dominate other countries. Russia and China are too strong to be dominated, and, thus, are throwing off the dollar system. If other countries follow, the dollar will cease to be an instrument of US control over the rest of the world.

To put it in different words, Bretton Woods gave Washington the responsibility for the world financial system. Washington abused the power entrusted to it by using the dollar system to destabilize other countries, such as Venezuela currently. Washington’s abuse of the world currency role in order to advance American financial and business interests and Washington’s power over the foreign and domestic policies of other countries has set in motion forces that will eliminate the dollar’s role as world reserve currency.

The hubris and arrogance of Washington are destroying American power.

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Wip
Wip

Bitcoin? Gold? Silver? RE? Farmland? Quatloos? All of them?

I still think a business is the best way but tis difficult ala LLPOH.

Innovation + Marketing.

Anonymous
Anonymous

I’ve got a feeling that gold backed Chinese currency isn’t actually going to be convertible into gold.

Otherwise in short order we and other oil producing nations will have the gold and they will have nothing since they used what they bought.

credit
credit

I’ve been in finance/markets professionally for 34 years. The old conundrum paraphrased ” buy it if you can drop it on your foot and it hurts” applies now more than ever

Westcoaster
Westcoaster

Every leader who has tried this has been murdered by the U.S.A. Who’s next?

Oilman2
Oilman2

Bitcoin is Quatloos…..no slaves, Quatloos worthless. No internet, Bitcoin worthless.

People generally don’t try to fix things that aren’t broken. I know I don’t randomly go out and tear out my brickwork just to put it back in a different shade or color. I don’t replace machines in plants that are working either; I wait until they fail to replace them because there is a lot of effort and cost to do so.

So this article does make sense, assuming there is not some kind of nefarious plan to simply wreck America. Then again, America has pretty much burned all bridges, even many with the EU of late.

I agree with Credit above regarding hard assets, but would toss in a working farm as well, not some random farmland or hobby farm. And you need to work it, not some foreman and cheap illegal labor.

Peaknic
Peaknic

to be immediately followed by bankruptcy and losing said working farm.

The margins just aren’t there for today’s “working farm” without going HUGE and requiring massive investments. Hobby farms allow you to hedge being able to make a living in today’s economy and being prepared for tomorrow’s collapse. I agree that you need to learn how to work it, though.

rhs jr
rhs jr

Ode to the USA Fiat Dollar: https://www.youtube.com/watch?v=f07HqO8KE3g

Mike Murray
Mike Murray

We (as a nation) brought this shit storm on ourselves.
Some of us will live with it, some of us will die from it.

“The most terrifying words in the English language are: I’m from the government and I’m here to help”.
Ronald Reagan

Stucky

“The US dollar’s value depends on whether central banks, corporations, and individuals are content to hold their assets or wealth in dollar” ——- article

The US dollar’s value depends on ten thousand nukes and the willingness to use them.

There. That’s better.

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