DEDOLLARIZATION AS BARTERIZATION - THE SAUDIS

The declaration of the Saudi Arabia today being open to trade in currencies other than USD is nothing less than stunning.


This is not a catastrophe yet but it's creeping up there slowly but steadily. Lacking a replacement, the world is going for Barter trade, which I call caveman economics.

The results are self evident, supply chains keep breaking down, affordability in the West is crashing, social unrest is boiling up everywhere from it. I explained it here quite sucincly.

Strange enough there is a precedent to it, the oil starvation period of 1970s. Saudis/Gulf oil producers held up oil supplies demanding higher interest rates from Washington DC, in order to trade in USD. Supply chains collapsed.

DC replied with Paul Volcker who shot up rates to 20%, satisfying the gulf oil producers. Oil price collapsed, thus providing the energy necessary for the supply chains to recover in 10 years thus providing 50 years of prosperity for the West, that is until 2000s, when rates collapsed again and as a result oil price and commodity prices shot higher due to rehypothetication in Eurodollar shadow banking.


This was quite similar with Weimar Hyperinflation, only that it happened in Eurodollar Shadow Banking.

During Weimar years in the 1930s, there was no shortage of commodities, it was only that commodities were withheld from the economy because the Weimar government was supplying excess money. The same until now, Federal Reserve was supplying excess money to the Eurodollar shadow banking system, which Weimarized oil and commodities into rehypothetication in London (oil) and Shanghai (copper). The real economy has been starving from energy and commodities from it.


As I predicted for 2023, Washington DC will not stay idle to this threat. The first and only NON MILITARY option is again, emulate what DC told Paul Volcker to do, shoot up rates to 20%, if need be, just to STOP CHINA and avoid Global Barterization of Trade. Jerome Powell idolizes Paul Volcker.

Jerome Powell has a job he is appointed for by Washington DC, and that is to save the dollar. 10% rates are coming inevitably, 20% likely, if need be.


MAKE NO MISTAKE ABOUT IT!



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