U.S. Debt, Deficits, global consequences.

 REJECTION OF DOLLAR WILL RESULT IN U.S. INFLATION

THE BEGINNING OF THE END OF FIAT CURRENCY?

While U.S. politicians debate increasing the debt, much of the world is now viewing the debased, non backed dollar with increasing skepticism. While it has been the mainstay of world trade for near 70 years, it is now on the verge of being replaced by numerous trading vehicles.

The dollar, at one time, had the reputation to be "As good as Gold". Sadly that is no longer the case. The dollar has not been exchangeable for any asset since 1971. It is a wonder that it has lasted this long. 

At one time, the United States was the envy of the world. An experiment in self government, civil rights, and the rule of law. It also had a reputation of sound money and fair play. Sadly, if thought about objectively, that is no longer the case. The United States is no longer to be admired and copied, it has destroyed its reputation by its own drift to a policy of power politics, both at home and in world relations. A policy not backed by law and righteousness, but just pure raw power. A power that was granted by its former reputation that has now been diminished.

For years, no one questioned the dollars supremacy as the worlds reserve currency, acceptable and sought after everywhere. That is no longer the case, while the reckoning is now on the horizon the seeds have been sown decades ago. First the policy of deficit spending that became not a temporary aberration but the norm beginning in 1969. This was followed by the first revolt against the dollar, by the Oil exporting countries who realized they were being paid in ever declining in value dollars for their most important commodity, oil, The lifeblood of word economic growth. This brought about the creation of OPEC which sought to control and maintain the value of their oil as the value of dollars diminished.  Of course, this was considered a hostile act by the United States.

While the massive inflation of the 1970's was brought under control, it pushed off any more rejection of the dollar for a long time. Then came the 1990's when the United States adopted the policy of using its economic and now unchallenged military power to replace a policy of being good example and a benevolent persuader into a policy of rule by power both economically and militarily. It began a 30 year period of death and destruction of any adversaries whether economic or otherwise.

For years our major trading partners where willing to except huge surpluses of American dollars, printed and created out of thin air, in exchange for their oil and manufactured goods and then use those dollars to buy U.S. debt. While they received a modest return in interest, they accepted this arrangement. 

Then the policy of zero interest rates came and they received no return and found it increasingly difficult to find things they wanted to buy from the U.S. market at a competitive value.

Then came policy of economic sanctions and actual freezing of assets of other counties by the United States. It became an escalating policy of threats over disputes and even domestic social policies. This came to an escalation with the Russia/Ukraine /NATO conflict and has sent an alarming message to the world. If you resist U.S. power you will be punished.

It was easy to isolate countries, like Iran, Libya and Iraq and even destroy them economically or militarily if necessary, but now it has escalated to Russia, China and many others. It is without a doubt, except in Washington, a very different matter. We are now in a world economic war and possibly soon a world military war.

It is now clear that the countries that have over half the worlds population and the majority of economic assets are on their way to escaping the power of the United States particularly in economic matters. When the dollar is no longer needed for trade between these countrie there will be glut of U.S. dollars in the world and those dollars will find their way home and bring about a collapse of the dollars buying power and hyper inflation in the United States. It may be too late to halt these developments.

So while we see Washington politicians debate taking on more debt, with the same old narratives, "we owe it to ourselves" and "it increases the domestic economy" and other nonsense, a tidal wave is building that will end the dollars dominance and with it, U.S. economic and military power.