Is the end of the Fiat Petro-Dollar Drawing Near?
Update #1: Breaking the Spell of the Warlocks: the Counterinsurgency
In my May 2022 essay “Breaking the Spell of the Warlocks: The 11.11.18 Decode & the Counterinsurgency Operation” I provided a Thumbnail sketch of the Worldwide Counterinsurgency, in which I argued that the Fiat Petro-Dollar—the lifeblood of the Warlocks—is slowly and carefully being brought to an end.
In this essay, I am backfilling that section, as well as augmenting it with what has happened since I published that essay.
For those who may need it, here is a brief primer I prepared on the following topics and terms.
What is currency?
What is money? What is gold?
What is the Fiat US dollar?
What makes the USD the world’s reserve currency?
What’s wrong with fiat USD and the Petro-Dollar Hegemony?
Update #1: Nearing the End of US Dollar Hegemony?
A global monetary reset—and quite possibly the end of the US Dollar (USD) as the world’s reserve currency—is by now well underway.
The end of the USD would change nearly everything about the world as we know it. Especially if by “we” I mean Americans and the Anglo-sphere in general.
After all, the USD is the common thread connecting the entire global financial and economic system. Currently 60% of global reserves are in USD; and 80% of global payments are made in the USD.
Consider as you read this essay: many if not all of the developments I describe below would have been unthinkable just a few short years ago.
And yet, here we are. As I see it, there are five (5) geopolitical realities—chess pieces being slowly put into place—that are bringing an end to the USD hegemony.
#1. In 2017, Gold was “reclassified” during Basel III as a Tier-I Asset by the BIS (Bank of International Settlements).
Gold is now officially recognized as being a high-quality asset; indeed, as being as liquid as cash. (After being deprecated as a “barbarous relic”—and systematically suppressed as an asset—for more than half a century.)
And in preparation for—and in reaction to—this development, we have seen:
Repatriation of Gold by Central Banks worldwide (“hey, give us our gold back.”).
Central Banks worldwide are buying gold at unprecedented rates.
This, by itself, is a threat to USD hegemony and its status as the world’s reserve currency. Why? Because Gresham's Law:
Good money drives bad money out of circulation, where and when people can decline to accept less valuable [desirable, stable] money.
That last clause in italics is key in two ways.
First, as a fiat currency, the USD has no inherent value. Indeed, it loses purchasing power every second of every day. Which means that holders of US dollars—whether individuals, companies or countries—inexorably lose their purchasing power (re: “wealth”) as the Federal Reserve continues to create more and more USD out of thin air via fractional reserve banking. (Which, not incidentally, forces regular people to invest in increasingly risky asset classes.)
Second, no nation can “decline” to use and hold the USD. The use of the USD in international transactions for oil—making it necessary that they hold the USD in their reserves, thereby creating enormous synthetic demand for the USD globally—was made mandatory by the Petro Dollar arrangement brokered by Kissinger in 1974; an arrangement that is ruthlessly enforced by the weaponization of the dollar and the threat of US military kinetic power.
Now, of course, let it also be said: the USD is often referred to as the “handsomest horse in the glue factory.” Meaning, it’s a kind of relative safe haven from what are even worse currencies. However, this is a temporary phenomenon made possible only by the Petro Dollar arrangement (the USD is only a safe haven because nations are forced to hold and use it, not because it’s uniquely or per se stable or sound, or particularly well managed), as well as the absence of real money in the monetary system—that is, money that is backed by commodities and/or precious metals.
And that “temporary phenomenon” is growing ever more temporary by the hour. As we shall see below, nations are now increasingly able to “decline” to use the USD and circumvent the Fiat Petro Dollar arrangement.
Moreover, now that gold has been reclassified by the BIS as a Tier-I asset, real money—that is money that isn’t someone else’s liability, such as physical, un-hypothecated gold—will drive out bad money (i.e. the USD, a fiat currency.)
#2. The largest infrastructure project in human history—the so-called “Silk Road”—is increasingly isolating and marginalizing the US Dollar
This new trade route/infrastructure is slowly but surely connecting most of the world’s economic activity:
70% of the world’s population
40% of global GDP,
All 13 OPEC producing countries
152 nations, mostly developing.
Most of the economic activity around the “silk road” project revolves around the Chinese digital Yuan, with over $20B in successful transactions thus far; and they are just getting started.
In other words, the “silk road” infrastructure project—and the trade it will enable—is devoid of US dollar participation. This is despite the USD still being the nominal world’s reserve currency.
Good money drives out bad.
#3. The rise of the Petro-Yuan, which is creating a vast synthetic demand for the Yuan (evidently, the Chinese learned from the 1974 US/Saudi agreement)
Iran is already selling their oil to China in exchange for the Petro-Yuan (which is immediately convertible to gold on the Shanghai Commodity Exchange)
As we shall see below, Saudi Arabia (who more or less lead the other OPEC countries) plans to do the same.
Nigeria (who recently signed a joint military agreement with Russia) are selling their gold to China for the Chinese Petro-Yuan bond (which again, is immediately convertible to gold on the Shanghai Commodity Exchange.)
Good money drives out bad.
#4. The rise of what analysts and historians have long called the unthinkably powerful “supercontinent”: Eurasia
And this will almost certainly entail a new monetary system with currencies backed by commodities and/or precious metals—that is, real and sound money—rather than a system backed by debt instruments (fiat USD).
In addition to to developments described above:
Xi Jinping recently travelled out of China to meet with Putin; signaling increased military and economic cooperation between the two powers.
Russia—booted off the SWIFT system by the US—is creating, jointly with other countries such as China, their own Eurasian transaction network.
China recently created what is referred to as the M-bridge, a cross border payment system for Central Bank Digital Currencies (CBDCs) - which also allows payments to increasingly sidestep the SWIFT system, particularly around the construction of the “silk road.”
Russia recently offered to help Iran create a gold-backed currency.
BRIC/Eurasian countries want their own currency backed by commodities and/or precious metals
BRIC/Eurasian countries are buying most of the world’s gold, even when they aren’t producing a good portion of it. (Interesting tidbit: Ukraine sold $25 Billion in gold to fund the war. To whom, one wonders?)
…All of which increasingly marginalizes the USD and the US. Including it’s influence via the Petro-dollar and SWIFT.
And just to say: the slow marginalization of the SWIFT transaction system is far more provocative than it may appear. The SWIFT system has been one of the key ways that the US has projected its power and enforcing the use of the USD for a half century around the globe: the ever-present threat of being “excommunicated” from SWIFT was often more than enough to keep most nations in line.
…But it gets still worse for Fiat Petro-Dollar…
#5. Saudi Arabia is decisively shifting its allegiance from the US to BRIC nations and especially Russia. This signals we’re nearing the end of the 1974 Kissinger Agreement that created the Petro-dollar.
Here are some examples of how this is manifesting:
Shortly after the US pulled out of Afghanistan in 2021—deserting weaponry, allies, and leaving our own servicemen/women behind enemy lines (nothing short of treasonous)—Saudi Arabia announced a join military cooperation agreement with Russia. This cooperation has recently stepped up significantly.
The Saudis announced at Davos in early 2023 that they would consider accepting payment for their oil in currencies other than the USD.
Saudi Arabia is also formally seeking to join the BRIC countries.
Once again, consider: these developments would have been unthinkable just a few short years ago.
“But if the Saudis actually do this, it’s WWIII, no? The US won’t simply allow this to happen.”
Perhaps, but remember: we are already in WWIII. And I’ve argued elsewhere, Ukraine is one of the proxy-fronts. And the Eurasia/BRIC countries are no longer as unorganized, poor, and weak as they were decades ago, especially as a group. So yes, at potentially explosive, dangerous and kinetic situation.
“So, what does all of this mean?”
That the days of fiat Petro Dollar dominance are possibly nearing an end.
All the above pieces are being slowly put into place.
Eventually it is going to be Checkmate.
But wait: Checkmate against what or whom?
Who or what is the enemy? Consider the following…
What is the common enemy of the American people? The fiat USD and it’s debt structure.
What is the common enemy of most nations around the world? The fiat USD and its debt structure.
What does a common enemy do? It unites people and nations who do not normally unite. “The enemy of my enemy is my friend"
Here are a few of many reasons for this “common enemy”:
The Federal Reserve isn’t “federal” and it isn’t a “reserve.” It’s essentially a consortium of private banks that have been authorized—in 1913, via a highly-deceptive campaign—by Congress to conspire against the American people. And nearly the entire globe.
The global fiat USD-dominated international monetary system has ushered unprecedented (and unconstitutional) power into the hands of very few, who have spent the past half century summoning at will a currency into being out of nothing via fractional reserve banking.
This “summoning at will” into being of every dollar via fractional reserve banking entails the immediate creation of a debt/credit relation, as every dollar is technically “lent” into existence. Thereby fabricating over time an inconceivably vast system of credit and debt that makes the very few very rich.
This has also created a global debt structure so large and complex that it is difficult to even conceive much less understand at a basic level. And impossible to ever pay back.
Inflation is theft. Anyone—a company, a person, or a country—who holds USD loses wealth with every second that passes. If the “currency” you earn and save depreciates inexorably, the value of your labor—your purchasing power, your wealth—does so too. Which forces average citizens into riskier and riskier asset classes to keep up with inflation.
Moreover, all of this debt and inflation creates enormous distortions in asset prices because real price discovery is nearly impossible. The last half century of real estate and the stock market prices are prime examples. There are virtually no real markets left.
The Fiat Petro-Dollar is not optional: sovereign actors are forced to use it for transactions and therefore to hold the USD in their reserves. This creates a truly massive synthetic demand for the dollar; and thus creates, perpetuates and ensures the USD as the world’s reserve currency.
The Fiat Petro Dollar is enforced via the threat of—or actual—kinetic action by the US military. And US military power, in turn, is made possible through the very same Fiat Petro dollar system it enforces.
And anyone who has tried to go around the USD has been bombed (Saddam Hussein, Gadaffi, etc.) and overturned; or, kicked out the SWIFT System (Russia), thereby isolating that power financially and economically.
While the amount of private deb in this sytsem—much of it shadow debt of inconceivable magnitudes—cannot even be known, the amount of debt the US government has created is in the many Trillions. This will never - ever - be paid back. People simply don’t understand what a Trillion is. Think of it this way: if a million seconds is 12 days. And a billion seconds is 31 years. A trillion seconds is 31,688 years. And the US government—who will never default despite ritual threats to do so—will simply try to inflate their way out of it. Which means that every USD loses still more purchasing power or “wealth.”
Gold has been deprecated as a “barbarous relic” and financially repressed for more than half a century. The price of gold has been systematically manipulated in part through the trading of un-hypothecated gold (re: merely paper with no real backing) via the COMEX Futures Exchange. Why? Because gold is an independent measurement of how well a currency is being managed. Or not. The real price of gold would reveal how distorted and corrupt the current Fiat USD system truly is.
Central Banks worldwide have initiated and funded nearly all the major wars, revolution and conflicts in history since the French Revolution. During the past half century, that Central Bank has been the Federal Reserve, which has wreaked havoc worldwide.
In short, the fiat USD has been weaponized politically and financially against the American people and the world.
As Uncola characterized it:
Like a snake consuming its own tail, and expanding into a skin-tight balloon of its own digestive gases, the Creature from Jekyll Island [The Federal Reserve here in the US] has grown through the cannibalism of Fractional Reserve Banking. As a result, Americans have been consumed on their ancestral lands. The manufacturing capabilities of the United States have been decimated, as wars were funded around the globe, as the citizenry was dumbed down, as governmental welfare programs were expanded, and as the populace was lulled into deceptive dreams via the financial acquisition and consolidation of the nation’s media outlets and entertainment venues.
What if patriots around the world are united by—and working against—this common enemy?
Who principally benefits from the fiat USD? It should be obvious by now. The Warlocks. Who can create as much USD as they like; enabling them to increasingly control governments, resources and people around the world.
“GIVE me control of a nation’s money supply, and I care not who makes its laws.” Mayer Amschel Rothschild.
In other words, the Fiat Petro-Dollar is the lifeblood of the Warlocks. They control the Central Banks. It is the fundamental source of their power.
Perhaps the above Chess pieces are being orchestrated by the global community—now united against this common enemy—to neuter the Federal Reserve and eliminate the PetroDollar while creating a new monetary order based upon sound money?
And perhaps, by so doing, they are also draining the world of the source of the Warlocks’ power?
Does thats sound like a pipe dream? Perhaps. However, consider the following:
Who is the primary figure in US history who fought against the creation of an independent central bank in the US? Andrew Jackson.
Whose painting hung in Trump’s oval office? Andrew Jackson.
Who loves gold and uses it prolifically in his private spaces? Trump.
Who has settled major real estate transactions in gold? Trump.
Who went on an unprecedented whirlwind tour at the very beginning of his Administration, meeting with all of the leaders who now seem to be cooperating at very high levels against the Fiat USD? Trump.
And consider also the following five (5) US Domestic Chess Pieces.
Piece #1. The Treasury—not the Federal Reserve—holds and controls the 9000 metric tons of US gold.
What is often said about gold? “He who owns the gold makes the rules.”
Piece #2. The question was always: do we actually still have the gold at Fort Knox? Yes.
We have been assured that the gold is in fact in our possession by the Trump Administration and others. For example, in a Dec 12, 2018 Drop in answer to the question: “Do we have the gold”? Q answered “yes.”
Piece #3. The Federal Reserve is now actually “Federal” for the first time since its (illegal) creation. Since 2020, it exists and operates under the auspices and control of the US Department of Treasury. Meaning it is no longer consortium of private banks conspiring against the American people and the world. No longer a rogue actor.
In 2020, the Federal Reserve was rolled into the Department of Treasury by the Trump Administration
“So, meet your new Fed chairman, Donald J. Trump,” chirped the Bloomberg author. Not far from the truth, at least effectively.
Piece #4. The Federal Reserve is under Patriot control now also in terms of leadership and personnel.
Trump filled an unprecedented number of Fed governor vacancies.
Piece #5. Accelerate the “printing” and spending of the USD into virtual oblivion.
During the past two years, it almost looks as if they are trying to destroy the currency. And that is exactly what the domestic patriots are doing.
*****
Conclusion: so what’s the Checkmate maneuver?
The Treasury could revaluate a heretofore hidden yet massive US asset on the Fed Balance sheet: US Gold
The 9000 metric tons currently on the Federal Reserve’s balance sheet is valued at only $42.22/oz. [NB: The Federal Reserve, in fact, holds gold certificates (reflecting the Treasury’s stewardship of US gold) on its balance sheet dating from the mid-20th century, when gold was valued in USD at $42.22/oz.]
Which is to say, far below the current price of $1800-1900/oz. And even farther below the real price of gold—estimated to be somewhere between $10,000-50,000/oz—if real price discovery were allowed in the market.
Now, suppose the Department of Treasury were to revalue the US gold at current market prices? (Say, by issuing the Fed a gold certificate valuing the Treasury gold at the going market rate.)
And suppose the Treasury issued a gold-backed USD through the now Executive-branch-and-patriot-controlled Federal Reserve?
This would mean, effectively, taking a more or less hidden asset that has always been in US vaults and bringing it out as a “trump” card. In other words, nothing would be added to our debt, and yet it would create a massive new asset class on the US balance sheet.
And what if the gold backing this USD were visible via a Blockchain ledger so that all sovereign parties could verify it?
Now the the Federal Reserve would be not only Federal, but also—and finally—a real Reserve.
And under the auspices and control of the US Government. And an issuer of sound money which can no longer be printed out of thin air.
Now the US would be both the entrenched-mover and the early-mover in the emerging global monetary system.
Confidence in the USD would surge.
And we would move into a multipolar world with sound money at the heart of a new monetary system.
And if sound money monetary systems of the past are any guide, we would perhaps enter a new era of real and even unprecedented prosperity.
And it gets better…
If good money drives out bad, perhaps that goes for people too? One can always hope.
After all, currency is often analogized to blood in a circulatory system, no? And what is the lifeblood of the Warlocks but the fiat USD?
Perhaps what we are watching, folks, is the slow exsanguination of the Warlocks? (A chilling image, I know. But sadly, also quite fitting.)
Let’s hope so.