Is Trump's hardline towards China the beginning of the fall of the dollar and the collapse of the economy?

Filed in NEWS ANALYZES by on 18 May 2020 10 Comments

source: abril.com.br

With the successive release of the gold standard and the oil standard, the dollar turned into a currency that will be printed without limits. We call it Fiat money. Fiat money is bad for international trade. After all, printing hundreds of billions causes a depreciation of money.

Because the US central bank (the Fed) controls this dollar creation process and the dollar is the standard in international trade, this depreciation of the dollar also influences the depreciation of other currencies, including the euro.

With the price of a barrel of oil momentarily going negative (which meant so much that you got money to buy oil) in recent weeks, it's a good thing that that oil is no longer the standard. Oil will be replaced anyway by Bill Gates newest toy (focused sunlight to make hydrogen for combustion engines).

The only reason we are left with that nothing-to-be-covered dollar standard is US military hegemony (so far). NATO has forced every country or leader to turn away from the dollar. It has always intervened with bombs and grenades and cleaning up the leader.

Examples?

  1. Yugoslavia 90s. Hardly any debt (so dollar independent). Strong own army (not a NATO member and at no. 4 in terms of army strength in the world). After Tito's death, the populations began to be pitted against each other to start a war that had to destroy the country, allowing the IMF to step in to borrow money for reconstruction (dollar dependence).
  2. Iraq, Saddam Hussein wanted to trade the oil in euros. So clean up.
  3. Libya, Moammar Mohammed al-Qadhafi wanted a gold-backed African dinar to release dollar dependence. Tidy and neat.

Now that the war in Syria has shown that NATO (American toy) power is no longer predominant, so is the beginning of the end of the global dollar standard. More and more countries are turning their backs on the US, and Donald Trump's only answer is a tougher line: trade wars. And now - with the coronavirus situation - he falls back on further stepping up China bashing. In his last interview with FOX News he stated even that he wants to sever all ties with China.

For the record, it is useful to know that the Chinese government has managed to keep its economy more or less dollar independent. That dollar was only used for international trade, but the Chinese central bank has always bought dollars from the country's multinationals and has managed to keep the Chinese yuan strong within its own borders.

In addition, China has a large economic influence in many countries around the world and the Chinese Belt and Road Initiative (BRI) project ensures cooperation with 120 countries and 40 large multinationals. That makes those countries and companies more dependent on China.

When Donald Trump shouts that he wants to completely drop China, it is very much like the latest act of desperation of a superpower that is losing its grip. While Trump pretends that his anger is related to China's approach to the corona virus, the real reason for his frustration is likely that the dollar is about to lose its world trade standard and that the Chinese yuan is gaining ground.

China introduced one within its own borders new cyber money means of payment: the e-RMB (Ren Min Bi, which means 'people's money'). This e-RMB is currently being tested in several Chinese cities, including Shenzhen, Suzhou, Chengdu and Xiong'an. In these cities, the e-RMB is almost universally accepted for salary payments, public transportation, food, and purchases in most stores. The system is linked to WeChat and AliPay (from Alibaba). This new cryptocurrency is covered by the Chinese Central Bank.

The IMF established the principle of the Special Drawing Rights in 2016, in which existing “old currencies” form a kind of backup for this new SDR cryptocurrency standard. The problem in this IMF initiative, however, is that the dollar forms 41,73% share within this new cryptocurrency standard, while the Chinese yuan has only 10.92% share (Japanese yen 8.33%, British pound 8.09%, euro 30.93%). So while the Chinese economy is about to become the strongest economy in the world, the share of the IMF crypto standard (the SDR) is disproportionately small.

So there is actually a financial war going on; a war that revolves around setting a new money standard. The dollar seems to be losing power and the corona crisis has given the final push, as the money press has never run so fast. Now that is proverbial, because no money is printed anymore. Only a number in a computer is incremented.

The Chinese yuan appears to be getting stronger, while the dollar is losing more and more value.

The question now is whether multinationals and banks want to move from the dollar standard to the yuan standard or whether there should be some sort of international gold standard again. The SDR as a crypto standard does not seem to be a reliable choice either, because with the depreciation of the dollar, that SDR will also fall (because of the dollar share of 41,73% in that SDR). So you have to get rid of the influence of fiat money (infinitely printed money) as the basis of an international financial system.

The dollar seems to have reached its end time. The economy in the US and Europe will be hit hard in the coming months by the effects of the corona crisis. Prices in supermarkets are already rising. Many companies will fall over and because hundreds of billions have been printed, this depreciation of money will become immediately tangible for everyone in the coming months. People who still have some savings will start to worry.

In fact, a doom scenario is lurking for many companies and savers. With the fall of the dollar, gold seems to be the only safe haven, because the amount of gold in the world is often used to cover a currency during a financial reset.

However, bitcoin also seems to increasingly provide that safe haven. With the potential threat of falling banks (because bankrupt companies and individuals can no longer pay their loans or the interest on those loans), the threat of bail-out and bail-in is lurking. This means that either the state saves the bank (read: the taxpayer) or that savings are used to save the bank.

So we will probably see a strong flight of money towards bitcoin and gold in the coming months.

It is predictable that the flight to bitcoin will be the largest, because you simply do not buy gold with the push of a button. You have opened a bitcoin wallet in no time and what is in your bank today will be on your bitcoin wallet tomorrow. That flight to bitcoin, combined with the mining principle on which it is based, is likely to give bitcoin such a strong international position that it has the potential to take the dollar's place.

The Chinese yuan may be covered by the Chinese central bank, but the reason that gold still serves as a backup worldwide is slightly hidden in the fact that you have to mine gold. You have to get that out of the ground through excavation work in gold mines, which is an expensive and labor-intensive process and there is scarcity. The Bitcoin mining principle is based on the same idea, as explained in this article.

The volume of bitcoin trading worldwide is now so great that more and more multinationals and large investors are interested in it and are entering it. If you add that fact to the lurking hyper-money depreciation and a possible fall of the dollar, it seems that for many bitcoin will be the bomb shelter. It therefore has the potential to set the new international standard and if the dollar falls, bitcoin may well take the dollar's place in the IMF's SDR cryptocurrency standard.

Source link listings: edition.cnn.com, ft.com, globalresearch.ca

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  1. frameworks wrote:

    In my opinion, we will first see a split of the USD between an international (petro) dollar and a local USD for the USA itself. The latter will devalue enormously, such as the scenario such as Venezuela. The split of the dollar is part of the financial reset, as each country has invested a lot of citizens' savings (in local currency, such as Iniase rupees) in US debt securities in its bank loan system to fund international trade that is settled in USD. Countries will therefore never want to see their claims of USA z = evaporate due to hyperinflation, therefore the idea of ​​the split. Furthermore, China owns more than a trillion of US debt securities. If China wants to go wrong they can dump the debt on the market and if there is no demand, the FED will have to buy this debt which will trigger hyperinflation in the USA. Trump's hardline regarding the tariffs war therefore seems to me to be the stage for the masses to implement the financial reset. Don't forget that a financial reset means that a lot of debt will be written off, because with a reset there is no point in including bad debts from the bankrupt system in the new system. Please note, this will only apply to a select group and not to the mortgagees or people with private debts, these will simply be continued in the new system. I also believe that we will see a huge appreciation of the international dollar before it disappears from the scene. This increase is mainly due to the demand for dollars to settle the entire derivatives complex. I think this will also be the time when the players (banks and central banks) will sell their American debt.

  2. SalmonInClick wrote:

    Hydrogen is the energy revolution that is coming and will cause a paradigm shift. Quite apart from the direct economic implications, almost all models based on the old energy sources can leave the window.
    https://www.rtlnieuws.nl/tech/artikel/5016231/bill-gates-jacht-waterstof-schip-superjacht-duurzaam-varen
    https://archive.org/details/ColdFusionTheSecretEnergyRevolutionByAntonyC.Sutton1997_201903/page/n13/mode/2up/search/hydrogen

    The proxy war between China and America is already underway and will only escalate given the fairly recent death of the Chinese ambassador to Israel and the biowarfare allegations. The build-up of troops in the South China Sea (Diego Garcia) should also be monitored.

    Hong Kong was a classic CIA Otpor operation and of course China will respond in its way when the time is right.

  3. Analyze wrote:

    even more sanctions, TSMC is a Taiwanese company a sensitive blow to China.

    World's Largest Contract Chipmaker Halts Deliveries To Huawei As New US Sanctions Bite
    https://www.zerohedge.com/markets/worlds-largest-chipmaker-halts-deliveries-huawei-new-us-sanctions-bite

  4. Sun wrote:

    An Israeli poster on 4 chan said Shin Bet, Israel's internal 'Mossad', killed the ambassador at China's request after Du Wei tried to defect and share info on China bio-warfare labs, and then was double-crossed.

    Henrymakow.com

  5. Riffian wrote:

    well, usual suspect Bannon is already anticipating the upcoming directed conflict with China.
    https://www.breitbart.com/politics/2017/11/13/im-proud-to-be-a-christian-zionist-steve-bannon-gets-standing-o-from-leading-jewish-organization/

    Bannon WarRoom - Citizens of the American Republic
    66,6K subscribers

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