Aug. 13, 1971 beginning of U.S. economic decline.

 ITS BEEN DOWNHILL EVER SINCE

NOW ESCALATING 

 

On August 13, 1971 Richard Nixon met with 15 advisers at Camp David and sealed the fate of the U.S. dollar and the economic future of the country. While this fate could have been reversed, and we have had some periods of slowing, it has been a downward spiral ever since. It is now generally conceded that reversal is now impossible, only an unprecedented crisis awaits.

 

On this day 55 years ago, Nixon, by executive order, temporarily ceased to exchange U.S. currency for gold. This was a reaction due to the increase in foreign countries demanding gold for their inflation ridden dollars and the U.S. feared that its gold reserves would quickly be depleted. It would have, only 2 years after the last balanced budget of the U.S., many were aware of the direction the dollar was going and hoped to cash in while they could. Nixon also imposed wage and price controls and a 10% tariff on imported goods, it had little effect and the rest is now history. 

 

In 1974 Nixon repriced gold from $35 an oz. to $42.22 were officially it remains today. The market price of gold today is $4375 an ounce. A glaring result of the continuous devaluation of the dollar in the last 55 years, much of it in the last 20 years, as the deficits increase, the debt is now considered unsustainable and any informed investors understand that it is all unsustainable and something will break very soon.

 

The Vietnam war and the great society socialist expansion resulted in the first budget deficits.  Raising taxes to pay for these things would be politically unpopular just as they are today, except today it is virtually impossible to increase taxes enough or cut spending enough without a serious economic crisis as a result. Most understand that it is now too far gone to be corrected.

 

Much of the focus is now on protecting and sustaining the dollar as the worlds reserve currency, it is no longer possible, it has been virtually destroyed over the last 55 years and much of the world is now moving to gold and silver as a better store of wealth. 

 

In fact we are now increasing the debt by $Trillions  in an effort to force others to keep accepting diminishing in value dollars, just making the matter worse.

 

While this act by Nixon was one part of the beginning decline of America there is much more that we will address in another time. 

 

We have been told repeatably that gold as a basis of real money is an antiquated relic of the past, but we are going to witness that unbacked paper money is an attempt to steal the labor and assets of all that count on it as a store of wealth, it is a purse with holes  and fraud on all those who rely on it.

 

 

 

 

 

 

Are West Asia countries hedging their bets?

 NEW ALLIANCES REPLACING THE U.S.?

IRAN WAR HAS HASTENED DECLINE OF U.S. INFLUENCE

 

The recent announcement of a new security agreement between Saudi Arabia, Turkey and Pakistan may be an indication that gulf countries are now planning to take control of their own security. They may have discovered that the U.S. is no longer in a position to offer that security. It is still not clear to what length this agreement goes and who they consider their biggest threat. While some assume it is an alliance to protect from Iran, it may be a growing alliance to protect from Israel and the United States.

 

Will Pakistan soon share nuclear technology to both Turkey and Saudi Arabia? Trump had proposed Saudi Arabia be assisted with nuclear enrichment, but only if they join the Abraham accords, which they refuse to do without a two state solution. Pakistan has had a close relationship with U.S. intelligence and one must wonder why they have been trusted by Iran in negotiations. Pakistan has also been cozying up to China, are they also hedging their bets?

 

This so called Mideast NATO has recently been proposed by Egypt, we will see if Egypt will be an addition to this group in the near future.  

 

One can understand the insecurity of these countries with the narrative coming out of Israel that Turkey is considered a greater threat to Israel than Iran and also concern about Egypt. It would be reasonable for these  countries to assume that the U.S. may also consider them a threat in the future. It is not far fetched to consider that even a alliance with Iran, insured by China could be in the future.

 

Then there is the clear indication that U.S. foreign policy is being based on the control of the worlds oil supplies, also a threat to their sovereignty. 

 

With the rise of MBS in Saudi Arabia the country  has cracked down on the support for international terrorism that once was financed by some in the country. His leadership has moved the country into a more aggressive entrance into the world financial community. The concern of the U.S. has been the acceptance of using Chinese currency in its oil transactions rather than the dollar. This is big no no for the U.S. and MBS likely understands that this will cause a problem with the U.S. The problem is, that most of these countries see China as a valuable partner for the future, both financially and politically, another reason for more hedging with an uncertain future. 

 

 

 

 

No Iran deal, just dueling economic warfare.

 U.S. WILL NEVER MAKE A DEAL WITH IRAN

IT WILL BE BACK TO WAR SOONER OR LATER 

 

It appears for now that the latest strategy is imposing economic hardship on Iran until it submits or surrenders to the U.S.  At the same time Iran will keep the strait closed until the U.S. is forced by internal and global pressure to back off from this war. 

 

The Israeli's concede that they may have to wait some time for the Iranian's to collapse and succumb to economic pressure, but they assume they will go the way of Syria, even if it takes years.

 

The Iranians also believe that in the short run they can cause severe damage to the presidency of Donald Trump  by continuing the economic pressure caused by the dispute over the strait. 

 

They all have reason to assume their analysis is correct, except there are many more interlocking variables to consider.

 

There is substantial evidence that this conflict will soon result in a global economic crisis that may far overshadow this conflict, way before Iran or the U.S. are willing to concede.

 

The internal politics of both the U.S. and Israel are very likely to become far more complicated in the short run than for Iran. 

 

Israel is claiming that Iran is forgoing attacks on Israel because they fear Israel's retaliation, I doubt this is the case.  Iran understands that without U,S. it will be at the mercy of Iran, so its focus is now on the U.S. 

 

We should expect that it will soon become obvious that economic pressure on Iran will not end this and a a last ditch attempt to overwhelm Iran militarily will eventually be on the agenda. It may be the last all or nothing throw of the dice.

 

 

 

 

 

 

 

 

 

Ukraine down to their last strongholds?

 DONBAS DEFENSE BELT UNDER EVACUATION 

MAY BE FINAL BATTLE FOR REGION 

 

Civilians are being evacuated from the main defense belt of the Donbas region,  the stage is set for the final battle for the Donbas region. While the war may continue, it will be a major step to ending this war. 

 

Most observers believe that when Russia secures this region plus the other 2 reaming areas, Kherson and Zaporizhzia, it will be a prime time for a negotiated settlement. When this area falls it will make the defense of the other regions far harder to defend.  At present this battle shapes up as the largest and most defining battle in this 4 year war. With anticipated causalities of 100,000 on both sides and possibly lasting for the rest of the year, it may be anticlimactic. It may be that Ukraine will not be able to last another 6 months and internal crisis will actually bring all this to an end sooner. Either way, it will be a pivotal battle in this war.

 

While much is made about Ukrainian drone attacks on Russian ships and infrastructure, the reality is that Ukraine has lost control of the Black Sea and the port of Odessa, a another pivotal reality.  Ukraine is on its way to being a landlocked nation whose economic future will be greatly diminished.

 

It is hard to envision any real peace in Ukraine,  even after hostiles end, it looks like years of suffering  and economic decline. Will the west be in an economic position to rebuild what will be left of Ukraine? It is likely that the areas that are part of Russia, will outperform what remains.

 

 

 

Growing cost of maintaining empire.

WILL $1.5 TRILLION DEFENSE BUDGET BE ENOUGH?

BLEEDING TO THE POINT OF EXHAUSTION

 

Osama bin Laden warned the US that if they continued on their path in the middle east they would be bled to the point of collapse.  The architect of the 911 attack is long gone, but his worlds are more relevant today than in 2001, 25 years ago. With another prolonged costly war underway in Iran and another in Ukraine, can the US continue to be the master of the globe?

 

We hear the new demand for $1.5 Trillion defense budget, an increase of $500 billion, as being necessary to defend the country from adversaries hell bent on the US destruction. The US has an estimated 750 to 800 military bases around the world, only an estimate, as no one really knows for sure how many. The UK also bankrupt, has the next largest number at around 100. The great so called threats to the US, Russia and China may have several dozen in lands adjacent to or bordering their countries. 

 

The US present Defense or War budget is now $954 billion and is claimed to be seriously inadequate.  China, a country with over 1 billion citizens, is next at $335 billion, admittedly rising, mostly due to continuous threats of US military and political leaders of inevitable war with China. Russia's military budget is estimated at $190 billion. Israel at $48 billion and Iran at $7.4 billion. No one is counting the pallets of US dollars handed out as bribes and incentives for other players to do military related operations for the greatest spender on the planet in human history, much of it borrowed or just plain printed money.

 

No one doubts that the US can ultimately defeat any adversary, ultimately with the use of nuclear weapons if necessary, at least for now. The question is how long can the US maintain the financial power to keep maintaining this empire, that is fraying badly. In December the selective service registration will become automatic and some suspect that it will be necessary to add many more warm bodies to the ranks to keep up the defense of empire. Reluctant warm bodies have often proved to be sometimes a liability rather than an asset, but I suspect this is were the country is going, like on a rail, with out brakes, until it ultimately self derails.

 

All the while, the adversaries may understand better than the architects of this empire that it is all unsustainable and time is running out, they just need to survive and not directly confront the monster, until it self destructs. 

 

 

 

 

Iran and Oman agree to strait plan.

 WILL TRUMP END BLOCKADE?

THE CHANGING GLOBAL ORDER

 

Iran and Oman have announced that they have worked out the details on a plan to insure safe passage through the strait of Hormuz, if this is correct, the only obstacle for free flow of passage is the Trump blockade, another dilemma for Trump. It seems that traffic will enter the strait on Iran's side of the strait and exit on Oman's side. Both countries will cooperate in maintaining orderly traffic to insure environmental guidelines and assist in any safety problems. They will charge a small fee for this service, no toll, maintaining that such fees conform to international maritime law.   

 

In effect, this agreement maintains that the strait can now be open and it will all depend on whether Trump will accept this arrangement. We can expect the majority of the countries who depend on traffic through the strait, will agree to this plan. There is speculation that Trump will agree, if the US shares in the income from the fees or assists in Oman's share of the regulation.

 

This may be another opportunity for Trump to declare victory and get out of this mess, without destroying the global economy. We can bet the wires are burning up from all those opposed and possibly from those that will accept this solution.

 

In the Ukraine conflict Russia has in effect disabled Ukraine from using the port of Odessa. It is unlikely that Ukraine can regain use of the port, making it a landlocked country.

 

The US is attempting to intervene in the Japan bond market crisis, also part of the consequences of the energy problems in Asia caused by the Iran war. 

 

The world is watching as the dynamics of the existing world order are in transition.

 

 

 

 

Iran negotiating with Oman on future of strait.

 NEW REALITY EMERGING IN WEST ASIA

 NEW REALITY WITHOUT ANY DEAL?

 

While much angst and threats of escalation continue, Iran and Oman have come to the final details on the plan to regulate traffic in the strait of Hormuz. One must wonder if the Iran crisis will end with a gradual change in the political alliances rather than a destruction of Iran. Of course, it is too early to tell, but world economic pressure is rising on many fronts and a continuation of the present conflict is becoming harder to justify.

 

While Iran has for most of this conflict had a policy of retaliation from attacks in a measured 1 on 1 response, it now seems it is attempting to increase its retaliation to be more aggressive in response. At present things have died down militarily, and escalation is becoming very dangerous politically, economically and even militarily. While there is talk of negotiations, there may be talking between intermediaries, there is not any direct talks between Iran and US and it seems there is not going to be any.

 

The Gulf countries are now in a box of their own, there is reluctance to support further escalation that could destroy these countries economically for years to come. Also, and one must suspect while the governments fear and are reluctant to deal with Iran their populations are now beginning to view Iran as the strong actor in the region. The much touted Shia Sunni division may be less real  in the general populations than in their governments. Is Iran becoming more of a hero to the Muslim population as this crisis goes on?  Iran has been able to engage in a rational unemotional policy that has been very disciplined and transparent, resistance with power, almost predictable and pragmatic responses, they do seem to have a plan and are following it.

 

The danger for Iran is over reach which could spell their doom, but so far, considering what they have endured, they have have been steady in their policies. Then while support in the US is weak for this war. it may be expected some sort of false flag attack by US players or Israel in the hope to gain support for the ultimate destruction of Iran. The immediate labeling of the migrant attack in Spain, by the majority of observers, blaming Israel and the US for punishing Spain for not being co combatants in this war may put a real damper on any attempts for such an attack.

 

At present there seems to be desperation in Washington, Tel Aviv and the Gulf countries, but time is running out, this situation needs to have some sort of conclusion soon, or the economic crisis emerging will possibly be more dangerous than this war.