Will Anything Burst the Dollar Bubble?
What accounts for the dollar’s strength? On the day of a government shutdown,
two weeks before a potential default, the US currency is flying high and gold is
down. Robert Bonomo looks at other events that, in an un-manipulated market,
should impact the Teflon currency.
by Robert Bonomo
“A Bad Month for the Dollar”
Robert Bonomo is a blogger and novelist based in Spain. He has a Masters Degree in Management from
Boston University and worked for Cofinoga, the banking arm or Galeries
Lafayette.
September has not been a good month for the U.S. dollar. The world’s reserve currency is sustained in large part by the Petrodollar, the agreement by the Saudis and OPEC to price oil in dollars and only accept dollars for payment. The US gets a guaranteed demand for its fiat currency and in exchange the US has agreed to protect militarily Saudi oil fields. However, after President Obama was forced to back off his plans to attack Syria in support of the Saudi backed insurgency fighting the Assad regime, one of the pillars of the Petrodollar scheme was shaken to its core.
If America has no more stomach for war in the Middle East, how certain can the Saudis be that America will protect the regime militarily if the need arises? Now that the President has acquiesced to public opinion in his decision on whether to use military force, can he be counted on in the future to hold up his end of the bargain in the Petrodollar scheme? The United States may have by far the world’s largest military, but what use is it if it can’t be used? And even when it is, seven years of war in Iraq has done little more than bring the country under the influence of Iran.
Another major problem for the dollar is the fact that the Fed has spent five years printing money and its balance sheet, at about 3.4 trillion dollars, is almost a quarter of US GDP. When Bernanke let the world know he was going to tap on the brakes, interest rates soared and the equities markets got spooked. He, like the President, had to back off.
And to finish the month we get an exercise in game theory galore with the House leadership playing high stakes chicken with the President by offering him only two solutions to the debt-ceiling, both of which would leave him devastated politically. He can either postpone implementation of his signature accomplishment, Obamacare, or shut down the government- it seems Mr. Boehner has taken a page from Mr. Putin’s playbook. After the foreign policy debacle with Syria, can the President afford to reside over a shutdown government? His other option is to be made politically irrelevant. One would think that his opponents will feel emboldened to hold their ground.
The dollar is backed by a military that has been left neutered by an incalcitrant home front, by a Federal Reserve Chairman who has no idea how to stop printing money by the trillions, and by an executive and legislative branch who spend billions on election campaigns yet are unable to renew the credit card used to pay the monthly bills of the government they supposedly serve.
It seems difficult to fathom that gold will not recover its march toward $2,000 an ounce and beyond while the dollar’s stature as a secure store of value continues to be gutted by an inept and irresponsible national leadership.
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Robert Bonomo’s latest novel, Your Love Incomplete, is about a spiritual awakening and delves deeply into alternative history, the financial system as well as esoterica. It’s free on Smashwords, https://www.smashwords.com/books/view/343638 Here are his interviews.
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Thom Beecham on Tuesday’s plunge in Gold, and the Pope:
Why does this come at a surprise? In all my writings I said it would. Gold is clearly going lower. All managed, however. Trades that size can only be official. The markets are all operating counterintuitively. This mean they are operating as predicted. I have positioned myself to get excited at lower gold prices. They are heading that way, so why fight it?
I hope to go long on the equity futures soon, as catastrophe looms. Think logically, then flip it. That’s what I do. It’s guaranteed to make money.
Maybe we are in end time Babylon. As a former Catholic, I marvel at what the pope is saying. He says not to get bogged down on such issues as homosexuality (he is the first pope to say “gay”), abortion, birth control, etc. He says to be inclusive like a big mega church. He says, who is he to judge? He is the Vicar of Christ. According to Catholic doctrine, he represents Jesus until He comes again. The pope says we all can go to heaven. We don’t need to belong to the church, nor do we need to even believe in Jesus. Why have the church? Just believe in your conscience. He says everything that is antithetical to Christian, and Catholic doctrine.
Seriously, this guy is the false prophet.
So can gold drop below 1,000? Of course… I have been saying for a long time that gold was managed higher, so it could bleed all while the NWO is being brought in. This is important to consider. Everyday that goes by is confirmation of this. I don’t have an opinion on what is going on. I just act react and prepare accordingly. My thesis is the only thing that makes sense and has saved me, and made me, more than 200k so far this year.
Source: http://henrymakow.com/2013/10/Will-Anything-Burst-the-Dollar-Bubble.html
