You may not have noticed it or you may have missed its significance, but there have been some landslides in recent days that are telling but hardly named in both the media and the alternative media: Saudi Arabia and Iran may start delivering oil in Chinese yuan instead of dollars. Saudi Arabia is no longer cooperating with oil price limits imposed by the U.S. and Russia is now China's largest oil supplier. China also stopped the war in Yemen by convincing Iran to stop arming the rebels.
How can we sum this up? The United States has been kicked out of the Middle East. It is end of business. If the main partner of the U.S. is going to do business with the arch-enemy of the U.S. and Israel, that is simply end of play for the U.S. The U.S. military has a number of important military bases in Saudi Arabia, but what's that worth when Mohammed Bin Salman (the Saudi crown prince who is actually in charge of the country) gets completely in bed with China and Iran and also abandons the dollar as a means of payment for that oil?
That important fact, of trading oil in the Chinese yuan (also called the petroyuan), seems to have been deliberately omitted in the media reports regarding this deal. Indeed, the dollar has thus lost its hegemony over that which until recently constituted the dollar's "gold standard": oil. In fact, OPEC is thus destroyed and, even more factually, the dollar's influence on international trade is completely undermined.
Specifically, what does that mean? Well, while the U.S. appears to be going bankrupt, Russia, China, Iran, Saudi Arabia and many other countries have rigged their own systems and at best can help provide the final push to accelerate the dollar's crash.
That the dollar is on the verge of collapse becomes clear with the banking crisis in the US. The fact is that the Central Bank (the FED) is a private institution, so it is not under the grip and control of the government. That Fed prints money (out of thin air and in the form of digital numbers in a computer) when the U.S. government needs extra money. Before the banking crisis, the Treasury Department created a Federal Deposit Insurance Corporation (the FDIC, a government agency); a $125 billion reserve pot. The Department also has a $25 billion Exchange Stabilization Fund (ESF). The latter pot was used, for example, to bail out Silicon Valley Bank (SVB) bank account holders.
Now what is the problem? Well, there is not enough money in circulation for when people would actually want to withdraw those digital numbers from their bank accounts or use them to pay bills. That's because banks buy debt securities (from sovereign debts with the Fed) as investments (read: buying hot air with a little interest). The total value of "money that could be withdrawn" (aka deposits) across all US banks is 18 thousand billion ($18 trillion). So if everyone would want to access their money, in times when people are afraid that banks will fail, there is only $25 billion available in the pot that is now used for that at the SVB bank.
Should the Treasury Department, under the supervision of Janet Yellen, decide to use the FDIC reserve pot of $125 billion, you would have a total pot of $150 billion (the FDIC 125 billion pot + the ESF 25 billion pot). Does that cover the need of 18 thousand billion (18 trillion)? No, that is not even 1%* of the necessary amount of money to save the assets of account holders of a collapsing bank (*calculation update).
Zerohedge now reports that there are reportedly plans for the Federal Deposit Insurance Corporation (the FDIC) to guarantee all the bank balances of every account holder across America and for every bank account. That would mean it would have to borrow $18 trillion from the Cenral Bank (the Fed) and that would mean that the balloon of money created out of thin air would grow many more times its current size. In short, the entire US financial system and the hegemony of the dollar is on the verge of total collapse. The only thing that can still work is a total reset of the system and that seems to be exactly the intention.
A crash of the U.S. financial system, will have a domino effect on Europe. If you have some money in reserve and want to secure it, read here how to do so.
Link entries: amwaj.media, middleeasteye.net, bloomberg.com,militarybases.com, wsj.com, zerohedge.com
20 Comments
Hi Martin
it is unfortunate for people who have nothing to be able to read that message .
I understand that, but if you have nothing, you have nothing to secure. And this website also needs to be able to keep running.
My costs doubled last month due to moving to a more secure server, so those who do have money have a win-win situation if they support me by becoming a member.
Martin,
Thank you for all the wisdom you share, very valuable to me! I read your articles, reflect, look around me but often feel lonely because so much is happening but people near me seem to be blind/deaf. I know you write that the outcome will be positive in the end (and I try to focus on that too) but is it crazy that I am scared?
It is not crazy to be afraid; that is an emotion that is ingrained in your brain operating system.
The trick is to look at that fear from the player position (consciousness) and then calm down again.
thank you for your reply
Strong article again Martin! I recognize what you write, because when I was listening bnr news radio yesterday they were actually kind of positive about the banking crisis and that it would all work out.
Interesting detail, every time I post on your website every time my screen on my mobile goes black and takes about 5 minutes, still odd! Maybe a coincidence but don't think so....
Just to clarify, isn't 18 trillion just 18,000 billion? Thanks in advance.
Yes, modified. I had initially assumed the original meaning of the English word (see here: https://en.wikipedia.org/wiki/Trillion).
If you assume it is 18 thousand billion, then still 150 billion is a small fraction of what is needed, namely 150/18000 x 100 = 0.83% of what is needed to bail out. Not even 1% "reserve" in the pots....
Hi Martin,
I what is needed is not the windfall loss of the government bonds or the balance sheets of the bank. After all, if deposit is 100 and initially the government bond is 100 and then there is an increase in interest which reduces the value of the bond to 90, then you do not need 100 guarantee but 10.
You have been led to believe that, but in fact those bonds are debts that are speculated with to make a profit over difference in value, but when it comes down to it, the debt has to be paid off and if that is an impossible pile of baked-air money, then the bond is worth nothing and so must be covered 100%.
When you buy a bond (government bond in Dutch), you are actually buying a debt security in the hope that someday that debt will be repaid out of the taxpayer's pocket.
Everyone has long known that this is never going to happen again, and so they speculate on the difference in interest on that debt incurred. Taxes are never going to pay off that mountain of debt. It is too big for that.
We have really come to believe that this form of debt has value and as if there will always be a buyer for such a debt security. It is assumed that hot air has value. It doesn't. It is so pretended because everyone is collectively pretending; because the experts are pretending. That pretending is over.
It's a bit like with vaccines:
If everyone insists that a virus exists, you can keep selling vaccines.
If everyone insists that a debt security represents a value, you can keep selling debt securities.
As soon as someone starts shouting "But that debt is never going to yield anything and is worth nothing," the house of cards collapses.
The only one who could still buy these government bonds is the party to whom they must be redeemed: the Central Bank (the Fed). It would then pay the same amount for the money it lent out, but would never get it back.
That is: offsetting air with even more air.
That's no longer going to happen. It is a self-reinforcing vortex. Literally.
During the period of Quantative Easing, the Fed (and the ECB for that matter) engaged in that kind of bond buy backs.
Then the Fed bought up billions in corporate and bank debt securities.
In effect, the Fed thereby repaid its own lending.
Large corporations and banks were thus effectively given tens to hundreds of billions for free.
With that, they bought up their own shares in the stock market, so the prices artificially rose.
And the joke is that the Fed creates that money out of thin air. So that's giving value to air. But because everyone accepted that value it was pretended to be fine.
So we have been fooled for years with feigned growth in the economy.
That game is over, because that so-called Quantative Easing has stopped and interest rates have risen.
The house of cards is collapsing. The balloon is bursting. The expensive terms for trickery and deceit like "bonds," "treasuries," "securities," "reserves," "quantative easing" and so on are losing their value. Indeed, they have always been worthless; only now is it becoming apparent.
And it's all by design! Not for nothing did I already predict this crisis in my article of December 30, 2021. I was only a little too quick and expected it for 2022. It is now happening in 2023.
https://www.martinvrijland.nl/nieuws-analyses/vond-u-2020-en-2021-ook-zo-vervelend-wat-kunnen-we-voor-2022-verwachten/
Indeed!!! Thanks.
They will provide false security and declare peace. We see that they are using China for that purpose. It is now also the Chinese who are openly declaring a new (economic) world order that Russia envies (according to Putin).
That peace will be relatively short-lived and suddenly the government in Israel will not tolerate Iran becoming a nuclear weapons power. Also what Poland is doing is an indication that the peace they will declare will be short-lived.
https://www.youtube.com/watch?v=x0EvGhJVIkE Alliance Germany Japan in the making.
https://www.youtube.com/watch?v=0gqLpfERb8k Alliance Russia China warns.
While everything is being prepared and getting ready, peace and security will be proclaimed for the SHINE.
I am watching the latest Tarot by Izabella with viewer questions, the first of which is whether Germany will join the BRICS countries and thus turn its back on the EU. Should that come up anyway it will indeed mean some sort of implosion of the E.U.
Did investors (read the AI systems) just regain a bit of confidence as Jerome Powell's (Fed chairman) prediction of a 0.25% interest rate hike took place as expected, Janet Yellen blows that (false) confidence back up within hours:
https://www.reuters.com/business/finance/first-republic-could-rally-if-fdic-insures-deposits-analyst-2023-03-22/
Or to speak with Zerohedge:
So, the goal of today was to stabilize banks and instead, they blew them up... "Damn it, Janet!"
first 25 seconds Kenya PM warns about possession of dollars.....