Mainstream Media Admits "The US Dollar's Domination Is Coming To An End"

Tyler Durden's picture




 

Submitted by Simon Black of Sovereign Man blog,

“Whoever is winning at the moment will always seem to be invincible.”

 

– George Orwell

Wise words indeed as they aptly describe misguided confidence in the US dollar.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT), which helps manage the global banking system, tells us that US dollar settlement accounts for the vast majority of global trade.

And as Orwell suggests, many people take it for granted that just because the dollar is in the lead today, it will be that way forever.

They couldn’t be more wrong. There’s been a dominant reserve currency for thousands of years.

The Byzantine Empire’s gold solidus was the world standard for centuries; when they hit the reset button in the 11th century, it became the gold hyperpyron.

Eventually this was abandoned for Venetian ducats. Soon Spain’s silver pieces of eight became the dominant reserve standard to the point they were still legal tender in the United States until 1857.

By the 1860s, the British pound sterling was the world’s primary reserve currency, and over 60% of world trade was settled in pounds.

Reserve currencies come and go. So will the dollar. This is nothing new.

It’s bad enough that US debt is greater than any other nation’s in the history of the world. Or that the dollar is being rapidly debased by a tiny banking elite.

But what’s really driving the nail in the dollar coffin is the US government’s continued appalling arrogance, particularly in bullying around foreign banks.

Just one tiny example is the US government’s $10 billion threat against French bank BNP Paribas, which may even include criminal charges.

BNP’s bank in Geneva stands accused of financing deals with Iran. Never mind that it’s perfectly legal for a bank in Switzerland to do business with Iran. Iran, after all, is one of Switzerland’s largest trading partners in the Middle East.

The issue is that BNP violated a 2012 -executive order- from Barack Obama (#13622) that requires non-US companies to enforce US sanctions.

The arrogance is really overwhelming. This isn’t even an actual law. It’s just an executive order– a royal decree from King POTUS, first of his name.

And even if it were an actual law, on what possible grounds could the US government claim jurisdiction to regulate foreign banks? None. But this doesn’t stop them from doing so.

FATCA is another great example– a seismically destructive law passed in 2010 that mandates all sorts of US compliance requirements on foreign banks.

The only reason the US is able to get away with this is because the dollar (and hence the US banking system) is so important to their global business.

Their patience has run out, and things are starting to change.

The Chinese government has been rapidly loosening controls over the renminbi to increase its reserve status and compete with the dollar. And the rest of the world has quickly adapted to the opportunity.

The proof is clear. According to SWIFT, China’s renminbi is now the second most used currency in the world for global trade settlement, putting it ahead of even the euro.

In London, renminbi trade last year surged 50% to $25.3 billion per day. And there’s every indication that this growth will continue.

Singapore’s central bank is now offering overnight renminbi liquidity. Russian companies are preparing to pay for trade in renminbi. Even the World Bank’s IFC just issued its first renminbi-denominated bond.

It’s happening. And based on the data, it’s completely obvious… to just about everyone but the US government.

I was surprised to see an article in the Financial Times’ banking intelligence subsidiary (‘The Banker’) entitled “The US’s dollar domination is coming to an end.”

Shocking. This reality has become obvious to just about everyone… except for the US government.

And seeing it reminded me of another great Orwell quote– “[W]e have now sunk to a depth at which restatement of the obvious is the first duty of intelligent men.”

Orwell was right. Fortunately, intelligent people can choose to embrace this obvious reality and benefit from it… rather than ignore reality and be devastated by it.

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Fri, 06/27/2014 - 10:28 | 4902114 _ConanTheLibert...
_ConanTheLibertarian_'s picture

I hope the system crashes before GATCA comes. It may come anyway.

Fri, 06/27/2014 - 10:29 | 4902121 Chief Kessler
Chief Kessler's picture

Ted Nugget is doing some dominating on Clive's Bunghole tonight ladies!

Fri, 06/27/2014 - 10:34 | 4902143 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

According to SWIFT, China’s renminbi is now the second most used currency in the world for global trade settlement, putting it ahead of even the euro.

If the RMB is pegged to the USD, this does NOT matter!!! It is a defacto dollar. The USD will NOT be hurt. Get over it. When the peg is dropped then the USD will be threatened.

Fri, 06/27/2014 - 10:36 | 4902147 y3maxx
y3maxx's picture

...Soon after the USSA swallows Canada for its wealth of Natural Resources and tiny population, the Canadian Loonie will emerge as the World Currency Reserve...No pun intended.

Fri, 06/27/2014 - 10:41 | 4902163 Top Gear
Top Gear's picture

Just a bunch of gold-bug wankers hoping for the Financial Apocalpyse.

Rapture = Collapse

Heaven = Gold Standard

Harold Camping is on the white courtesy phone.

 

Fri, 06/27/2014 - 10:45 | 4902190 MeMongo
MeMongo's picture

"Think of it men, hoof and mouth disease a thing of the past!

..........

Fri, 06/27/2014 - 11:25 | 4902220 JRobby
JRobby's picture

Damn miracle anti-biotics

Fri, 06/27/2014 - 13:17 | 4902765 SamAdams
SamAdams's picture

Once the dollar loses its reserve status, it can be canceled, and the whole debt/inflation scam started anew.  The only reason it has not yet been canceled, is that the gold and the financial system took time to move to the new wealth extraction land of China.  Why do you think all the gold is moved?

Currencies have been canceled many times in European countries, but they were not a reserve currency.  For all practical purposes, Bretton-Woods is moving to China.

Remember, a dollar in 1913 is worth 4 cents now.  That means it is about played out.  And over that 100 years, they have bled the USA dry, just like a parasite should.  Now that the host is nearly deceased, and it is time to move to a new host.  However, there will be plenty of parasites left behind to keep the old host down.  Agenda 21, fracking, illegal immigration, etc.

Fri, 06/27/2014 - 10:49 | 4902209 El Vaquero
El Vaquero's picture

I'm not a Christian and I fully expect an economic collapse. 

 

The average life expectancy for a fiat currency is 27 years.” Onward to gold.

 

http://www.forbes.com/sites/ralphbenko/2014/06/23/ron-paul-and-rand-paul...

The USD has been pure fiat since 1971.  That's roughly 43 years.  The dollar is an old and worn out whore.  What now, BITCHEZ? 

Fri, 06/27/2014 - 10:57 | 4902255 Azannoth
Azannoth's picture

I don't think "True Belivers" buy much gold, it's "God" they trust remember? not Gold

Fri, 06/27/2014 - 11:09 | 4902305 Top Gear
Top Gear's picture

God, Gold, Guns, Grub, and Girls! (not in that particular order) or is it Bible, Bullion, Bullets, Beans, and Babes?

Fri, 06/27/2014 - 11:21 | 4902346 Grande Tetons
Grande Tetons's picture

Prayer, Pms, Power, Preperation and Pussy....and then more Pussy. 

Fri, 06/27/2014 - 11:42 | 4902418 MuleRider
MuleRider's picture

Sprituality, Silver, Shooting, Sustenane and Skanks....hey this s fun!

 

 

Fri, 06/27/2014 - 11:47 | 4902437 Grande Tetons
Grande Tetons's picture

I am going to add this exercise to my home schooling curriculum. 

Fri, 06/27/2014 - 14:17 | 4903081 Cathartes Aura
Cathartes Aura's picture

I'm sure your daughters

will be pleased

to learn their place.

Fri, 06/27/2014 - 14:37 | 4903167 Miles Ahead
Miles Ahead's picture

Real True Believers?  Not Gold, nor Silver.  More like 401-K.  And...

KillingAbortionists, K9 Knots, Kerosene, Kissing Kin, Ku, Klux, and Klan...

Fri, 06/27/2014 - 11:26 | 4902371 JRobby
JRobby's picture

There is a sale on Toughshed's this weekend

Fri, 06/27/2014 - 11:39 | 4902409 Son of Loki
Son of Loki's picture

Gold at $2,800 and oil at $150 is a real probability in the near future as the dollar weakens, costs to make things rises and geopolitical conflicts increase. The lady down the block is a buyer for a large retail chain and says textiles like cotton, merino wool, cashmere and up over 30% yoy. She also said due to the Vietnam problems many Chinese companies are relocating back to mainland and will pay the higher labor. This translates into much higher clothes prices next year.

 

I guess it’s just a matter of timing when these commodities/textile prices soar.

Fri, 06/27/2014 - 12:05 | 4902513 Praetorian Guard
Praetorian Guard's picture

Guns, Grub and Gold

www.gunsgrubandgold.com

Fri, 06/27/2014 - 12:51 | 4902669 Citxmech
Citxmech's picture

You keep fiddling - I'll keep prepping.  We'll see who's wager pays bigger dividends.

Fri, 06/27/2014 - 12:09 | 4902526 Space Animatoltipap
Space Animatoltipap's picture

These Top Gear guys are indeed megalomane. They are just living tragedies. Cynical, arrogant, incompetent. But popular with the blind masses.

Fri, 06/27/2014 - 12:26 | 4902596 Slave
Slave's picture

They still haven't banned this fucking troll?

Fri, 06/27/2014 - 14:19 | 4903090 Cathartes Aura
Cathartes Aura's picture

heh, "fucking trolls" are becoming the

backbone of commentary threads.

get 'em while you can though, as those same

comments dis-appear every few months. . .

Fri, 06/27/2014 - 20:38 | 4904441 The Merovingian
The Merovingian's picture

Fuck off troll.  

Fri, 06/27/2014 - 11:15 | 4902330 BobTheSlob
BobTheSlob's picture

Define "pegged"...more like a "managed float" and who controls it?

"The true value of the yuan is difficult to ascertain, and although various studies over the years suggest a wide range of undervaluation - from as low as 3% to as high as 50% - the general agreement is that the currency is substantially undervalued. By keeping the yuan at artificially low levels, China makes its exports more competitive in the global marketplace. China achieves this by pegging the yuan to the U.S. dollar at a daily reference rate set by the People’s Bank of China (PBOC) and allowing the currency to fluctuate within a fixed band (set at 1% as of January 2014) on either side of the reference rate. Because the yuan would appreciate significantly against the greenback if it were allowed to float freely, China caps its rise by buying dollars and selling yuan. This relentless dollar accumulation led to China’s foreign exchange reserves growing to a record $3.82 trillion by the fourth quarter of 2013."

http://www.investopedia.com/articles/forex/09/chinas-peg-to-the-dollar.asp

Sounds to me like the "exchange rate" can be quickly altered to suit China et. al.

Fri, 06/27/2014 - 12:20 | 4902567 Urban Redneck
Urban Redneck's picture

No, a CNY is not a de facto USD.

A currency peg is not some magical bond, it is an actively maintained machination of a central bank.

A currency peg between the #1 and #2 trading currencies has serious implications for domestic monetary and fiscal policy in both China and the US (as well as the rest of the world).

You could apparently actually learn something from an Economics 101 class.

Fri, 06/27/2014 - 13:03 | 4902721 screw face
screw face's picture

buy the fucking dip

Fri, 06/27/2014 - 13:11 | 4902755 Redneck Hippy
Redneck Hippy's picture

Yes, but that Uraguayan soccer player had to pay a fine to FIFA denominated in Swiss francs.  Surely that's a sign of imminent collapse.

Fri, 06/27/2014 - 14:38 | 4903173 Miles Ahead
Miles Ahead's picture

+100

Fri, 06/27/2014 - 10:36 | 4902145 y3maxx
y3maxx's picture

Most definitely.

Fri, 06/27/2014 - 10:38 | 4902155 ZH Snob
ZH Snob's picture

it's tricky tryin' to balance the cash one should keep (outside the bank), the PMs one should turn most of it into and the food that would be wise to store. 

black markets and bartering will become the preferred means of buying and selling once even the dolts realize our government is out to destroy us.

Fri, 06/27/2014 - 11:05 | 4902286 MeMongo
MeMongo's picture

Mongo suggests NOT another minute should go by before one actively gets involved in bartering with others! Those are not the type of networks where trust is often quickly gained. Imho the sooner the better, once trustworthy relationships are established trades get easier and smoother!

Fri, 06/27/2014 - 13:04 | 4902723 zerocash
zerocash's picture

Executive Order 666666 will mandate that all assets will be seized of businesses that don't use FRN's for international trade wherever they are located in the world and of whatever nationality they are. And that all persons involved (from upper management to the lowest janitor) will become outlaws who are eligible to be droned or killed by all law abiding people.

Execute Order 666666!

Fri, 06/27/2014 - 10:27 | 4902116 madcows
madcows's picture

Winning!, Er, wait, no, LOSING!

FORWARD, Comrades!  Way to go, guys.  You have successfully killed the Golden Goose.

Fri, 06/27/2014 - 10:28 | 4902117 Thought Processor
Thought Processor's picture

 

 

It's ok, Belgium will soak up all the excess reserves.

Fri, 06/27/2014 - 10:43 | 4902173 BeerMe
BeerMe's picture

Not after a U.S. victory in the World Cup!

Fri, 06/27/2014 - 10:30 | 4902120 alexcojones
alexcojones's picture

    "Believe me, the next step is a currency crisis because there will be a rejection of the dollar, the rejection of the dollar is a big, big event, and then your personal liberties are going to be severely threatened."

-Ron Paul


Fri, 06/27/2014 - 10:36 | 4902150 Top Gear
Top Gear's picture

Ron Paul is a threat to personal liberties.  That moron seems to have never read the Constitution.

• The notion of a rigid separation between church and state has no basis in either the text of the Constitution or the writings of our? Founding Fathers. ~wRoNg Paul, 2003

Really?

• I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should "make no law respecting an establishment of religion, or prohibiting the free exercise thereof," thus building a wall of separation between Church & State. ~Thomas Jefferson, 1802

wRoNg Paul is just a sex-obsessed fundie boy.

• "There clearly is NO RIGHT TO PRIVACY...found anywhere in the Constitution....The State of Texas has the right to decide for itself how to REGULATE SOCIAL MATTERS LIKE SEX, using its own local standards..." ~wRoNg Paul (lewrockwell.com/paul/paul120.html)

Here's your privacy, Ronny boy:

1st Amendment = Privacy of Beliefs
3rd Amendment = Privacy of the Home
4th Amendment = Privacy of? the Person and Possessions
5th Amendment = Privacy of Personal Information

Somebody hand wRoNg Paul a copy of the Constitution.

Fri, 06/27/2014 - 10:45 | 4902188 NoDebt
NoDebt's picture

You make friends like Obama wins the respect of other world leaders.

Just curious.... in your mind, are you winning?

Fri, 06/27/2014 - 11:03 | 4902280 Top Gear
Top Gear's picture

I don't want Ron Paul in a Texas Ranger hat peeping in my bedroom.  Therefore, I'm pro-Obama.  Libertarian Logic, it's awesome.

Fri, 06/27/2014 - 11:09 | 4902302 Deathrips
Deathrips's picture

Yup Top Gear.... You're a moron.

The same mother fucker signs all their checks. Fuck wearing political jersies while getting ass raped.

The face you think is a choice are all controlled by central bankers that create money out of nothing, and the people work for it dumbass. Which party gives me the opt out of this central bank circle jerk?

 

Some people....

RIPS

 

Fri, 06/27/2014 - 11:18 | 4902337 BobTheSlob
BobTheSlob's picture

Wow...you actually admit that you are pro-Obama...incredible! White guilt much?

Fri, 06/27/2014 - 11:57 | 4902487 Top Gear
Top Gear's picture

Do you find Obama to be an anti-property shade?

"In short; racialist science is properly not an act of aggression or a cover for oppression of one group over another, but, on the contrary, an operation in defense of private property against assaults by aggressors."  ~Murray Rothbard (lewrockwell.com/rothbard/ir/­Ch75.html‎)

Do you reckon them suthern Mises Institute boys in Auburn, Alabama gots 'em a scientific plan to put Obama back in his place?

"I laid out my 'Thirty Day Plan' for...restoring the natural socioeconomic hierarchy..." ~Lew Rockwell (mises.org/freemarket_detail.aspx?control=560)

Boy, bring me my lemonade before I apply my freemarket whip to your backside!

"He'd like more than anything else to boss me around, and then whip me every time I displeased him....Slave-master Rafe would never shell out the cold cash if, after he paid, I could haul him into court on assault and battery charges when he whipped me."
Voluntary Slave Contracts, by Walter Block, Austrian Economist (lewrockwell.com/block/block134.html)

And don't you forget it:

"We libertarians do not oppose HIERARCHY or COMMAND or? AUTHORITY..." ~Stephan Kinsella

Bow to your freemarket boss, NOW!

Fri, 06/27/2014 - 12:02 | 4902501 cocky roach
cocky roach's picture

I wanted to point out that Top Gear is a moron, but I see everybody beat me to it.

Fri, 06/27/2014 - 13:08 | 4902738 Citxmech
Citxmech's picture

You know, the other day I was going to post something about the only way this asshole (Top Gear) could ensure more downvotes is if he started talking shit about gold and Ron Paul.

Apparently, nothing needed to be said.  This clown has got to be the latest itaration of MDB.  A little less pure sarc, a lot more vitriol - but all the talking points are basically the same.  

Pure uncut troll.  

Nobody could be this much of an idiot for real.

 

Well played sir.

Fri, 06/27/2014 - 14:26 | 4903116 Cathartes Aura
Cathartes Aura's picture

while he may well be "trolling" - he IS making some points worth noticing, amidst the sarcasm.

anyone looking to divest themselves of a limiting belief system that requires "leaders" to tell them how to think, can certainly take some of his posts at face value.

but you'll have to give up that ole FatherGod/old man worship, and the belief that voting can change anything

in a system that is working as designed.

((including the ole controlled opposition chestnut))

Fri, 06/27/2014 - 16:17 | 4903650 NidStyles
NidStyles's picture

You've obviously never actually read anything Ron Paul or Mises have wrote.

Sat, 06/28/2014 - 13:00 | 4905475 Cathartes Aura
Cathartes Aura's picture

au contraire, my stance is actually BASED on Ron Paul's ongoing propping up of bills designed to insert government into women's body sovereignty - a gene he's passed on to his career-politician son, and others in the Republican Party the Pauls live within.

while he's terribly popular with the volunteer military and the young folks seeking legalising of marijuana, etc. - there are people paying attention to what

his other hand is up to.

back when ZH pages were FILLED with his fans during the electioneering circus, I did much research into Paul's written histories, even those he later disavowed.  as a career politician only recently retired, there was quite the backstory for those who took the time.

as to Mises.org?  I am not a voter, nor a State-ist, nor do I seek to be governed by adopting a "label" to argue from, so it holds little value for me to re-search anything "Mises" lads are interested in, beyond a political perspective currently trendy for adoption.

HOWEVER, here's a link to mises.org that is of interest to me,

Another argument of the anti-abortionists is that the fetus is a living human being, and is therefore entitled to all of the rights of human beings. Very good; let us concede, for purposes of the discussion, that fetuses are human beings—or, more broadly, potential human beings—and are therefore entitled to full human rights. But what humans, we may ask, have the right to be coercive parasites within the body of an unwilling human host? Clearly no born humans have such a right, and therefore, a fortiori, the fetus can have no such right either.

I've read that Ron Paul has a portrait of Rothbard on his office wall. . .

 

((not that it matters, but I didn't downvote you. . .))

Fri, 06/27/2014 - 12:04 | 4902507 Grande Tetons
Grande Tetons's picture

Lemme guess....Adderall with a Red Bull chaser? 

Fri, 06/27/2014 - 12:56 | 4902692 jerry_theking_lawler
jerry_theking_lawler's picture

Man, they are thick in here tonight....plus they get dumber, and dumber, and dumber as time goes on....the pay must be getting low (as .gov is running out of funding)...

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