US$
What I hear and can understand is that Americans are the only people who do not know about collapse of US$. I do not know what else to call it. What do you call loss of 40% in value within four years? What do you call loss of 60% of value since introduction of Euro?
After years of delay Iran finally opened new oil bourse. For now they will trade oil in Iranian currency but before long they will probably trade it in everything except US$.
For many years US$ was backed by oil US did not own or controlled and by might of US military. Saddam announced plans to trade his oil in Euros and look what how he ended up.
Iran was postponing opening of oil bourse until recently when fear of US attack somewhat subsided. I would not be surprised if some reasons to attack Iran will be found anyway and very soon. Aircraft carriers and assault ships are still in the Gulf and ready to go. Iran maybe much harder target than Iraq though. Unlike Saddam who only had some very old, obsolete arms and equipment Iran has been busy buying up much more advanced equipment. Yakhont, S-300, Sckval, Tor, Kilo just a few names which may not tell average American much but they do worry American generals and admirals greatly.
In addition to Iran Russia is getting out of US$, even Norway of all places is talking about doing the same.
There is a whole other side to US$ troubles. With US economy slowing down and looming recession Fed is dropping interest rates lower and lower. Who is going to keep buying US debt at these rates? There is a limit to a good will of China, Japan and Britain.
Today one announcement (“we are not buying US debt anymore”) by some Chinese financial minister can literally pull the plug of US$ and US economy in general.
Who need a war, shooting, fighting... all that nasty business when mighty USofA can be defeated by just a simple announcement?
American mindset about China has been the same for years. Very outdated “They need US more then we need them” the “Golden goose” mindset. Reality is loss of American market for Chinese goods is now very much a survivable scenario. Rapidly growing Asian market can become self-sustainable very, very soon. Add to that European market and it becomes very bad short term but very survivable in the long term scenario. In addition to that all US “allies” with come to kiss Chinese boot in the hurry. Europeans, Japanese, Koreans will be there in no time. With loss of American market they will have absolutely no choice but to try to save their investments in China.
How about another totally shocking fact that NOBODY is talking about. I am not an economist but it seems like US market in freefall too. All stocks on US markets are in US$, right? DOW itself is a combined worth of top 30 companies as far as I know and those stocks are in US$. With value of US down 40% in last four years and 60% in the last seven or so does it mean that US market lost 40% and 60% of it's value in the same time period?
Where on the news did anybody hear about US market loosing 60% of its value in the last seven-eight years?
Going back to my common theme of looking back at last days of USSR.
In 1980s I often heard term “convertible currency” of Soviet media. Apparently Soviet Ruble was not “convertible currency”. Few bothered to figure out what it meant. Basically what it meant is that Soviet Ruble was totally worthless outside of USSR. It could not be converted to any other currency. Trust in Soviet Ruble inside of USSR was nearly absolute though. Average Soviet citizen never doubted worth of the Soviet Ruble for a moment.
I look around today and I see things going in the same direction. Americans look at their news and see two topics on daily bases: “US$ record low” and “Oil record high”. They look at both and can not comprehend the connection between the two. Trust in worth of US$ is so absolute that it precludes them from making simple connection between those two “dots”. Instead they go straight into complaining about ridiculously high gas prices.
News flash Americans! Gas is derived from worldwide commodity called oil! Gas is not going up, US$ is going down the drain!

