End of the Petrodollar?

Many of you know that the U.S. dollar currently has a lot of demand for it.

Most of you know that the value of something is based on the laws of supply and demand.

Only some of you probably know that for ANY country buying or selling oil...it needs to be done using U.S. dollars.  That was an agreement our leaders made with Saudi Arabia 50-60 years ago....we will defend their kingdom and they sell us oil and accept our US dollars as payment.

So clearly, we have a certain amount of DEMAND that is built into our dollar...because most of the world is involved in buying and selling oil and they need U.S. dollars to do it.

Cool.

So what happens if a bunch of countries decide to throw aside this practice...and come up with a new currency with which to trade oil?

Ummmm....guessing the value of it will go down...as the demand for it goes down.

Now throw in the fact that the Federal Reserve has PRINTED about $85 billion per month for the last 6 years and increased the supply of U.S. dollars by a huge amount...and one might soon say, "Houston...we have a problem."

Is the petrodollar monopoly about to be shattered?  When U.S. politicians started slapping economic sanctions on Russia, they probably never even imagined that there might be serious consequences for the United States.  But now the Russian media is reporting that the Russian Ministry of Finance is getting ready to pull the trigger on a "de-dollarization" plan.  For decades, virtually all oil and natural gas around the world has been bought and sold for U.S. dollars.  As I will explain below, this has been a massive advantage for the U.S. economy.  In recent years, there have been rumblings by nations such as Russia and China about the need to change to a new system, but nobody has really had a big reason to upset the status quo.  However, that has now changed.  The struggle over Ukraine has caused Russia to completely reevaluate the financial relationship that it has with the United States.  If it starts trading a lot of oil and natural gas for currencies other than the U.S. dollar, that will be a massive blow for the petrodollar, and it could end up dramatically changing the global economic landscape.

The fact that the Russian government has held a meeting to discuss "getting rid of the US dollar in Russian export operations" should be front page news on every mainstream news website in the United States.  That is how big this is.  But instead, we have heard nothing from the big mainstream news networks about this so far.  Instead, we have only heard about this from Russian news sources such as the Voice of Russia...

So will Russia go through with this?

After all, this wouldn't just be a slap in the face.  This would essentially be like slamming an economic fist into our nose.

You see, Russia is not just a small player when it comes to trading oil and natural gas.  The truth is that Russia is the largest exporter of natural gas and the second largest exporter of oil in the world.

If Russia starts asking for payment in currencies other than the U.S. dollar, that will essentially end the monopoly of the petrodollar.

In order to do this, Russia will need trading partners willing to go along.  In the article quoted above, the Voice of Russia listed Iran and China as two nations that would potentially be willing to make the switch...

So why is the petrodollar so important?

Well, it creates a tremendous amount of demand for the U.S. dollar all over the globe.  Since everyone has needed it to trade with one another, that has created an endless global appetite for the currency.  That has kept the value of the dollar artificially high, and it has enabled us to import trillions of dollars of super cheap products from other countries.  If other nations stopped using the dollar to trade with one another, the value of the dollar would plummet dramatically and we would have to pay much, much more for the trinkets that we buy at the dollar store and Wal-Mart.

In addition, since the U.S. dollar is essentially the de facto global currency, this has also increased demand for our debt.  Major exporting nations such as China and Saudi Arabia end up with giant piles of our dollars.  Instead of just letting them sit there and do nothing, those nations often reinvest their dollars into securities that can rapidly be changed back into dollars if needed.  One of the most popular ways to do this has been to invest those dollars in U.S. Treasuries.  This has driven down interest rates on U.S. debt over the years and has enabled the U.S. government to borrow trillions upon trillions of dollars for next to nothing.

But if the rest of the world starts moving away from the U.S. dollar, all of this could change.

In order for our current standard of living to continue, it is absolutely imperative that everyone else around the globe continues to use our currency.

Here;  http://theeconomiccollapseblog.com/archives/de-dollarization-russia-is-on-the-verge-of-dealing-a-massive-blow-to-the-petrodollar

What???  You mean this move by other countries could affect our standard of living??  Wait a second...this is America!!  Nothing like that could EVER happen to us!!  Haven't you read the papers??...the stock market just closed at an all time high!  The economy has come roaring back!! Huge houses are being built again!  People are borrowing money again!!  In fact, just today the Wall Street Journal had an article on the front page that says banks are going to start to ease lending requirements so more people can BORROW MONEY and spur on the home building!!

It's funny.  I've been in the financial business since 1987.  In fact I got my securities license in October...right before the crash of October 1987.  People can NEVER seem to see bubbles.  When things are going up...folks believe they will always go up.  Since we have owned the petrodollar advantage for the last decades...folks believe we will ALWAYS have it.

It's only after the crash that people stand around and say, "How could we have not seen that coming?"

Of course this WILL happen again...maybe tomorrow, maybe next week, maybe next month, or maybe next year.  But when you throw in the spiritual debauchery which has taken over this country and then throw in the collapse of our money-god...I believe this will be an event of MAJOR PROPORTIONS.

We need to cling VERY tightly to the Word of God and to Jesus our savior...because DECEPTION is everywhere.