Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years. (Article Link)This development should not come as a surprise to anyone paying attention to public statements being issued by China and other economically powerful countries. Ever since Nixon dislocated the dollar from its gold-backing in 1971, the U.S. Government and the Federal Reserve have embarked on 38 years of extraordinarily reckless - ultimately catastrophic - fiscal and monetary policies. Policies which allowed the middle class to feign prosperity, while the business and political elite have engaged in years of escalating fraud and corruption, culminating in the consolidation of wealth and power into the hands of very few people and have completely sabatoged our Constitution and system of democracy. Policies which furthermore have inflicted a continual and insidious devaluation of the U.S. dollar currency reverves being held by every other country in the world, especially the massive dollar reserves held by China and Japan.
It was the recycling of these petro/export-based dollars back into the U.S. via Treasury bond purchases by the OPEC countries, Japan and China that allowed the U.S. to run its now trillion-dollar spending deficits and 12 trillion dollar Treasury debt outstanding. It should have been clear to everyone long before we reached this tipping point that this behavior by the U.S. was unsustainable. And now it looks like the rest of the world is going to force the issue by pulling the rug out from under the U.S. dollar, thereby ultimately ending the U.S. system as we've known it since the end of World War Two.
This could well be the event which precipitates the escalation of "quantitative easing," aka monetary printing press policy, by the Fed. In the 2nd quarter of 2009, Bernanke's Federal Reserve purchased 50% of all the Treasury bonds issued by the Government. If our trading partners no longer need to recycle their dollar reverves back into our financial system, we could well see the monetary hyperinflation that a small but growing number of financial commentators have warned is inevitable, as the Fed would be forced to print even more money in order to finance U.S. spending deficits.
The bottom line is that, while Americans are being well-fed by Bernanke and Obama with the illusion that the recession is over and economic prosperity is right around the corner, the rest of the world is preparing funeral arrangements for the U.S. financial system. Anyone who wants to preserve some modicum of their remaining wealth would be advised to shift as much money as possible into gold, silver and mining stocks. Do not be the last one out of the dollar.