Checkers Versus Chess

Tyler Durden's picture

Submitted by Jeff Thomas via Doug Casey's International Man blog,

For quite some time, we have been predicting that the Russians and Chinese will, at some point, bring an end to the petrodollar system that has virtually guaranteed the US the position of having its currency be the world's default currency. This position has allowed the US, in recent decades, to go on a borrowing and currency-printing spree, the likes of which the world has never seen.

First, a Little History

It's important that we back up a bit here to have a look at how this came about in the first instance.

In 1971, the US government, under Richard Nixon, took the US off the gold standard. This meant that, from that point on, the dollar was backed by nothing. However, as long as the dollar was accepted as legitimate currency (even though it was now mere paper), not only could the game continue as before, but the US would then be free to print as much "currency" as it wished. It would also be free to borrow as much as it wished, thereby building as large an economic house of cards as it wished.

Of course, the foolhardiness of this decision would not be immediately clear to all and sundry. It would take some time before the chickens would come home to roost.

Enter the Petrodollar

Back in 1971, it was necessary to assure that the dollar would retain its position in world trade as the world's premiere currency, in spite of the fact that it was no longer backed by anything. The US reached an agreement with Saudi Arabia that, in trade for arms and protection, the Saudis would denominate all future oil sales, worldwide, in dollars. The other OPEC countries fell into line, and the "petrodollar" was assured.

Returning to the present, we have stated for some time that the methods by which the US, the Russians, and the Chinese have been playing the game have been very different. The Chinese, for over 4000 years, have played the game of wéiqí, and the wéiqí philosophy is a primary part of Chinese philosophy. The idea is to distract your opponent whilst you subtly surround him. Once he is enclosed, with no support from outside, it's game over.

By contrast, the Russians are perennial chess players. Chess, played correctly, involves the concept of imagining each move that your opponent may possibly make. For each possible move, you imagine each possible move you could make and how your opponent might retaliate. You then select your best move. A good chess player is one who has learned to imagine several moves in advance. Therefore, once your opponent makes his move, you are never taken off-guard. You are prepared for anything he does.

Mister Putin is a consummate chess player, and since he has returned to office, each time the US has made a move, he has been ready. Each of his moves has not only countered the US, but trumped them. At every step that the US gets tough on Russia, Russia immediately says, in effect, "Okay, remember, you brought this on yourselves." Russia then makes a move that puts the US in a far worse position than it was before.

The amazing fact here is that the US method recognises neither wéiqí nor chess. They appear to be playing checkers. The US has, since World War II, used the approach of "The Yanks are Comin'." The US has been the biggest boy in the schoolyard and has, through a combination of bluster and bullying, been able to intimidate the world and, as a result, get virtually everything it wanted for a very long time. Conventional diplomacy has taken a back seat with the US, and, particularly since the administration of George Bush, the US has very much ramped up its "biggest boy in the schoolyard" approach, much to the irritation of the rest of world.

Here Come Those Chickens

But now, the US is broke, and its stature as the biggest boy has begun to wane. The other kids in the schoolyard are playing smart, whilst the US is still playing tough…and it's no longer working.

Claiming that Russia was overstepping its power in the Ukraine (when, in fact, it was the US that was guilty of this move), the US applied economic sanctions to Russia. The US media treated this as a major blow to Russia, from which the Russkies had better back off if they knew what was good for them.

But, in fact, this served as an open invitation for Russia to retaliate. Since the very first thrust by the US, each parry and thrust by the Russians has been both effective and well planned. (It should be borne in mind that the latest announcement that Russia would not accept US dollars in payment for gas could only be enforced if Russia could get its international gas customers to agree. At the time of announcement, nine out of ten customers had, in fact agreed. These decisions were, unquestionably, not reached overnight. This chess move was planned well in advance.)

When Russia announced that Gazprom, the largest gas supplier in the world, would no longer be accepting US dollars from its clients, the West was shaken by the news.

End of the Petrodollar     

So, does this spell the end for the petrodollar? Not just yet. But it does add a nail to the petrodollar coffin, and a rather large nail, at that. It most certainly announces to the world that, if the US continues its schoolyard bully approach, both the Russians and the Chinese are more than ready. They have greater power than the US gave them credit for and, as we are witnessing, are more adept at the game itself.

Time after time, the US announces a flimsy new policy that is half-baked at best, and the US media announce, in effect, "This'll show 'em!" And yet, at every turn, the Sino-Russian tag-team deals blow after blow to US hegemony in the world.

The US is at war with China and Russia. It's an undeclared war, and it's monetary warfare, not military warfare. Yes, there are the military distractions, such as in the Ukraine and the Middle East, but the primary war is being fought monetarily.

If we observe the Asian responses to the US attacks in this war, and assess them objectively, we see that the Asians do not seek to kill off the US. In each battle, they, like skilled bullfighters, deflect the charging bull, then thrust the sword forward, wounding him again and again with every charge.

As this approach is becoming a pattern, it would indicate that the Russians and Chinese, much like a bullfighter, are wearing out the bull and provoking him to lose enough blood that, soon, he will no longer be able to continue the fight.

There will be no H-bomb moment here. No point at which the US, to the entire world's surprise, suddenly self-destructs. Just as Rome wound down 2000 years ago, we shall observe a similar winding down of the US. (Although there will be many sudden crashes along the way, the entire process will stretch out for years.)

And I believe the US will be kept alive by the victors. It will remain in business as a country and will serve the East, particularly as a consumer of Eastern-produced goods.

But it will cease to be the world's empire. Much as the British Empire wound down as a result of the world wars, the US will be greatly diminished in power.

More and more, US residents are coming to realise that the "recovery" that is forever being heralded as "just around the corner" will not arrive. No "green shoots," no "shovel-ready jobs" will materialise. The US are attempting to win a chess game by playing checkers, and they will not succeed. The US's place in the world will be a casualty of that error, as will be the US economy.

Editor’s Note: Unfortunately there’s little any individual can practically do to change the trajectory of this trend in motion. The best you can and should do is to stay informed so that you can protect yourself in the best way possible, and even profit from the situation.

This is what Doug Casey’s International Man is all about: helping you cut through the smoke and mirrors while making the most of your personal freedom and financial opportunities around the world. The free IM Communiqué is a great place to start.

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Squid Viscous's picture

doubtful that Obozo is even good at checkers...

El Vaquero's picture

He's still trying to determine if the red checkers taste any different from the black checkers.  See, he's smart like that.  He wants to choose the worst tasting checkers to play with so that he can eat his opponent's checkers every time he captures a piece.

WayBehind's picture

Obama is too busy dealing with more important issues ... like canceling trademarks names for a NFL team

Publicus's picture

The East has more than enough consumers for it's own goods. When the time comes, just as Rome, the US will fall into the dark ages while the East enters a golden age.

ZerOhead's picture

With bankers, neocons and Israel at it's helm we can only hope.

That'll make for a short ride.

SafelyGraze's picture

what they don't realize is that the fed can lend unlimited amounts of dollars into existence, or just issue them to outright buy things

so even if the russians and chinese and europeans and south americans don't use the dollars, the fed can *still* generate more and more and more of them.

and that's what keeps the economy safe and stable.

and keeps the value of the dollar high.


ZerOhead's picture

Somewhere around 1 quadrillion dollars or so the wheels suddenly fall off of that argument...

Anusocracy's picture

One comparative disadvantage the US has is the conga line of Obamaoid wannabes, both red and blue, waiting to take charge of the US Demolition Derby.

SafelyGraze's picture

zerohead -

you know that I am reluctant to take issue with you but ..

"Somewhere around 1 quadrillion dollars or so the wheels suddenly fall off of that argument... "

just try telling that to my 100 trillion zimbabwe note

that's right. signed by mister gono. 

backed by the full faith and credit etc.

so now who is holding Real Wealth and who is on the outside, staring at my zimbabwe note. I think we know the answer to that.

keep on zeroing!



strannick's picture

A US elite that destroys its own Twin Towers and disaopears A Mayasian jestliner and kills everyone on board as collateral damage, will to anything to perpetuate its power. Get to know God/Jesus, because the elites are enthralled to a demon (,living lie)

MeMadMax's picture

I don't think the author of this article has taken into account that the US has more debt than ever recorded in history...

We are in uncharted economic territory and anything goes...

Steverino's picture

once the dollar loses some of its hegemony... all that gold being socked away by the #1 consumer and producer of gold (China) will come into play... backing the yuan... and the dolla will devalue.. and you just might get a "100 trillion dollar USD note" to go with your 100 trillion zimbabwe note..

Urban Roman's picture

One Avogadro, two Avogadro ...

How much does a mole of dollars weigh?

Ness.'s picture

Brazil, Russia, China, India, Japan, Australia, Africa, UAE, Chile and Iran have all been making arrangements since 2009 to trade in something other than the USD.

SNAP!!  that's some shit right there.  Your move Barry!


tonyw's picture

"The US is at war with China and Russia. It's an undeclared war, and it's monetary warfare,"

Not only China and Russia but anyone who uses USD and those who try to use something different e.g. Ghaddafi, Hussein.


Nexus789's picture

Don't think so. At some point the Dollar will reach an inflexion point where it is not worth holding as there are alternative 'stores' of value. Dollar denominated assets will then collapse in value. You can carrying on printing but it would be a fruitless exercise with no demand for US currency, bonds or other dollar based financial assets.

COSMOS's picture

We are surely on our way out... I mean look at the # hashtags, its Tick Tack Toe, this is all these politicians can play on the international scene.

Crazy Or Not's picture

Agree COSMOS. 
There are fundamental flaws in ratios of resource consumption for USA v Rest of the World.
Marry those to contributions/products or services produced and US of A does not stack up as a player.
i.e. it takes far more than it gives, so RotW is going to take any opportunity to action any "What Gives" stratergy to "rebalance the field".
And here we on. 

Monty Burns's picture

If/when the petrodollar dies Americans won't be doing much consuming of foreign produce.

Savyindallas's picture

Fine  -that's a task I think he should be involved with  -just stay out of foreign policy and economic matters. As a Cowboy fan who hates the arrogant billionaire Jew Dan Snyder and the Washington Redskins, I think we should change the name. I have several suggestions - how about the Washington Native American indians? Actually, I think these people should be offended by any affiliation with the scumbags in DC. The city is mostle  black anyway- except for the few Ivy League protestants and the jews who the inhabitants serve and who really run things. Maybe we should still honor the locals by Calling them the Washington African Americans  -or to be totally honest -the "Washington Uncle Tom's" ?   

Savyindallas's picture

"Hail to the Washington Uncle Tom's!

Hail Victory!

Former slaves on the warpath

Fight for Ole DC!


I think this works. They can even keep their old fight song-with these slight adaptations. 

Al Huxley's picture

How 'bout the Washington Sociopathic Bankster Toadies?  The logo could be a guy in an expensive suit sucking off a guy in an even more expensive suit while simultaneously lifting the wallet out of  Joe Sixpack's back pocket.

BlindMonkey's picture

I see where you are coming from but you are new to this marketing thing.

IronForge's picture

District of Marion Barry...

with Hizzonner as the Mascot, with Pipe in hand...

Pairadimes's picture

I can't read the cartoon, but I think Obama is saying "King me!".

erg's picture

El Vaquero: The ten pound dumbbell was just too damn heavy so now he just curls a couple of checkers.

RafterManFMJ's picture

Nah, Amurika is being bled dry, defanged and shuttled off to the ash heap of history like an incontinent old dog.

And that is Amurika - an old dog with rotten teeth; can still bite but if you're nimble it cannot quite get to you, and besides it's easier to bark threateningly and lie in the sun, dreaming of the glory days that in reality, never were quite as good or as pure as remembered.

drendebe10's picture

Putin allegedly said, negotiating with obama is like playing chess with a pigeon.  It knocks all the pieces over, craps all over the board and then struts around like it won.

COSMOS's picture

That may work in the hood in Chicago, but it don't work in Afghanistan or anywhere else around the world.

BKbroiler's picture

what's funnier is where that quote was misapropriated from:

"Pigeon chess" or "like playing chess with a pigeon" is a figure of speech originating from a comment made in March 2005 on Amazon by Scott D. Weitzenhoffer[1] regardingEugenie Scott's book Evolution vs. Creationism: An introduction:

Debating creationists on the topic of evolution is rather like trying to play chess with a pigeon — it knocks the pieces over, craps on the board, and flies back to its flock to claim victory.

booboo's picture

As much as I hate to admit this (and I despise the fucker) Oblahblah is just a distraction, selected more for his narcisism and loosed on the American landscape by his masters and told he could do anything his heart desires, a perfect patsy for a perfect moment. The transitional President deludes himself into thinking he is in control and walks around saying "Crown Me"

BlindMonkey's picture

Yes but shake-weight Barry is just so much fun to fuck with.

Savyindallas's picture

BTW, now that Obama's handler butt-buddy rahm is back in Chicago  -who is his new handler? I should know this, but I don't think I know.

TheReplacement's picture

To paraphrase what someone here once said about him before, 'Obama's still trying to figure out why the black checker tastes the same as the red one.'

It's that or Obama is the real evil genius and his goal is to kill the USA. 

Either way, mission accomplished.

CPL's picture

The don't put an end to it.  They escape it.  Slightly different strategy when dealling with something that is so broken, out of control and well on it's way off a cliff.  They are doing the only option any country can do right now, which is jump, tuck and roll.

Beats the alternative to staying on the 'train'.

DanDaley's picture

If the object were to actually help the US or be on the side of the US, Obama's attitude would be different, perhaps...but that's not what he's after, quite the contrary,

buzzsaw99's picture

owebomba doesn't want the usa as a whole to win at anything. only his maggot billionaire owners matter to him and winning is not in their best interest.

...It wasn't my war! You asked me, I didn't ask you! And I did what I had to do to win! But somebody wouldn't let us win! [/Rambo]

NoDebt's picture

TPTB know full well the US is basically just running out it's clock on the world stage.  So they're extracting as much as possible from it as it goes down and moving on to the next.

noob's picture

ya, again with the checkers analogy,


End of the Petrodollar
Enter the Gazprom-dollar

New ( / Old ) World Order wise, what's the difference?

thestarl's picture

Can say that again ND,private equity, hedge funds etc been snapping up anything and everything down here in Oz last couple of years. 

thestarl's picture

Can say that again ND,private equity, hedge funds etc been snapping up anything and everything down here in Oz last couple of years. 

LuciusGermanicus's picture

Chess is a game with finite outcomes.

Chess...checkers it doesn't matter.

All those "chess strategies" can be usurped simply by recognizing the pattern or having calculated every possible outcome.

drendebe10's picture

Your premise requires cerebral horsepower....  the incompetent, corrupt arrogant narcissistic illegal indonesian kenyan muslim sociopathic liar in chief only cares about its celbrity grand imperial golf life style at the expense of hard working US citizen tax payers... 

COSMOS's picture

# they only know hashtags and tick tack toe, that is the full extent of their cerebral power.  They cant think longterm

LuciusGermanicus's picture

Maybe they can dust off Deep Blue and consult the Oracle ;)