Why the Dam is Finally Breaking on the US Dollar

Maybe Iran wants a bomb. Maybe not.

But blocking it out of the SWIFT system, in other words cutting it off from using the US dollar for its oil trades (among other things) because we suspect it does, simply meant that countries that still want to trade with Iran and which are not beholden to our political whim, have found ways of doing business without a dollar in sight.

That was a reckless decision at best. It opens the door to alternatives... alternatives that Russia, China and India – all major dollar holders – may just like better.

As Doug explains, it may be a step toward a return to a gold-based monetary system, something we've discussed many times in the past.

Watch Doug's illuminating interview with Border Gold's Michael Levy.

13 thoughts on “Why the Dam is Finally Breaking on the US Dollar

  1. The world is changing so fast that it passed me by years ago. At 73 years of age I am dumbfounded at the abilities of the youngsters to blend into this complicated technical society. My father needed to blend into his early-1900's culture too, including a tough time during the depression. Now I am looking at a repeat of that dismal time, complete with depression and simultaneous inflation. Oh boy, that will be a hard one. Eventually our economy will be a replica of the Weimar Republic in the pre-Hitler days.
    Going one step further, we'll gladly accept a dictator to get us back on our feet again. I believe the panacea for depression he/she will use will be WWIII and government projects. Those who don't read history are doomed to repeat it. Adios.

  2. All these American doom-talkers and fundamentalist freedom-preachers seem to have their mind made up for ages, so I won't confuse them with facts. But the facts are that the debt per capita of the USA is higher than that of the EU taken as a whole, as well as the yearly budget deficit. Facts are that a generalized state-operated medicare like in (Western) Europe is less expensive than the private system in the USA. Fact is that the perceptions against the Euro made euro exports cheaper. The shining city on the hill is to blame for the start of the financial crisis by immoral lending banking practices and Europe (plus China) have to pay part of the bill. It's very easy to preach freedom when somebody else has to pay the bill, isn't it?

    1. Although I agree with much of what you have written, Hugo, I take issue with the second half of this sentence: "The shining city on the hill is to blame for the start of the financial crisis by immoral lending banking practices and Europe (plus China) have to pay part of the bill." The simple truth that has emerged is that for all of their santimonious protestations of innocence and holier-than-thou condemnations of US corruption, European, and Chinese, and Australian financial systems were utterly complicit and equally corrupt. It is nice to have someone to blame, and the US has much to answer for, but do not be diverted from the global pandemic of corruption by finger-pointing politicians intent on diverting popular attention from the fundamental issues. And the most fundamental issue of all is the corruption that is rife throughout the financial sector globally: bankers have no allegiance to a political system or a nation, only profit--which is why they must be very tightly regulated and monitored by a citizenry. In the case of the US or the EU or Australia, the notion of the financial sector being self-regulated, which we allowed to happen on our watch, has proven to be one of the most grevious errors of our generation. Until citizens recognize that they enabled this behavior because they could not bother to pay attention to these people's shinannigans and admit our culpability in the crisis, nothing will be resolved and the world will blunder along to the next stage of the crisis.

  3. P. J. O'Rourke said. "Giving money and power to government is like giving whisky and car keys to teenage boys."

  4. The Central Banks of the EU and US are now in the Fast and E-Z lane printing /creating money. With stuttering fingers they instantly turn Millions into Trillions and ship it in seconds anywhere in the world. The opportunity for abuse is staggering. IOUs are electronically matched to YOMs (You Owe Me) through so called Derivatives while boatloads of goods are brought in from Asia paid for by cyber bytes. Bloated and rapidly expanding bureaucracies in the western world are financed by imaginary future revenue. We have a card house on steroids and there is no political will to deal with it. I guess there is an argument for a store of value such as gold, silver and other tangibles.

  5. Rebuild for Free?

    halburton is a charity? Look harder at the reality of US aid spending and who is making the $$$$$

  6. some f'ing empire........................all we ever did was save the world and rebuild it for free.

    viet nam.......not so much so.

  7. Although I am a British, Anglo-american bilateralist (at heart) I think the U.S. has to accept that their imperialism is on the wane. The U.K. had to give up its empire.

    As these former colonies & emerging markets grow then the playing field becomes equal - India, China & Brazil are major players now and that is something new for the 21st century.

    The U.S. (& the UK, Germany, France etc) has to re-evaluate its role in the world and get its own house in order (debt levels).

    The old, nordic, thrift culture has given way to profligacy and we in the west need to change our ways.

    However, all said and done, the global demographics suggest continued growth is inevitable and there is one asset class that is international which is commodities, i.e. everybody eats food from far-away countries these days, building materials etc etc.

    1. Never think this "old lady" will fall, She may stumble here and there but Our founding fathers have set up a system that the people control.
      WE the people are slow sometime but when We wake up LOOK OUT.
      Remember this nation is the most rich nation as far as natural resources. After the masses completely wake up to this fact we will get going again. India and China needs US more than we need them when it is all said and done.

      1. Sounds great Ronnie, however this nation is technically insolvent. The only way out is eventual default, it cannot be fixed. Way past that point. Soon, simply just the yearly interest on the outstanding debt, not counting massive future unfunded laibilities, will exceed that of many large annual budget expenditures. That is not sustainable in any stretch. That also does not take into account higher interest rates, exacerbating the disease.

Comments are closed.