BY BART STAR-JAMES United States President Joe Biden does not seem to know where he is as history slowly turns its wheels of fortune to the east.
A talking head of him or an acolyte frequently appears on our screens spewing out threatening diatribes of vindictiveness and sanctions against Russia completely oblivious of the imminent backlash of his actions.
Apparently, his presumption is that “American Exceptionalism” gives him the moral right to do this.
He believes that the USA has hegemony over the whole world.
He has put maximum effort to prolong human suffering and misery in Ukraine by giving weapons to the weaker side.
This has delayed a quick victory for the stronger side and extended wanton destruction and death of innocent people in that country.
But the real outcome of this war is not about who wins or loses it.
The important outcome is the oncoming massive shift of financial geo-politics to the east.
The president is oblivious of the gigantic economic and financial strength held by other countries and their ability to hit back.
He is trapped in anachronism. Some from his own side have called it pure dementia.
He cannot understand that the economies of the world are inextricably entwined. To harm one is to harm all and self.
By using the US dollar as a sanctions tool against Russia, he has sent a clear message to all that the currency cannot be trusted as a neutral reserve currency in times of conflict.
It is also an act of grand larceny to freeze and hold US$630 billion belonging to the Russian central bank when the two countries are not at war.
It could also be an act of malicious envy because the USA itself does not even have half of that figure in their national reserves.
The US dollar had, up to now, come to be accepted not only as a reserve currency, but also as the currency of international trade.
This has resulted in a situation where there are more US dollars outside the USA than inside it.
One can categorize these dollars roughly as Eurodollars, Petrodollars, Asia dollars and now Afro dollars.
These are US dollars in American banks and elsewhere owned and controlled by foreigners.
Some of the holders of these reserves have started to show hostility towards the USA and this can bring the American dream to a jolting end.
Below are the top ten countries with US dollar reserves as of March 2022:
Country US$ in Trillions 1 China 3.2 2 Japan 1.3 3 Switzerland 1.03 4 India 0.57 5 Taiwan 0.55 6 Hong Kong 0.48 7 Russia 0.46 8 South Korea 0.44 9 Saudi Arabia 0.43 10 Singapore 0.41 Total 8.87Note: These are approximate as they were confirmed for each country on different dates.
Maintaining foreign currency reserves is vital for the economic well-being of a country and it makes it easier to keep a tight rein on inflation and the exchange rate for the country’s currency.
For simplicity, these top ten countries can be viewed as ten people living together in a house looking at their bank statements.
Mr. China is the richest one amongst them. His beloved young brother, Mr. Hong Kong and two friends Mr. Russia and Mr. Saudi are also in the house.
The four of them control 52% of the total of US dollars held in the house and outside the house and none of them is a ‘democratic country’ according to western definition.
There is a gay couple that lives in the house next door, Mr. USA and Mr. UK.
The couple is cantankerous and bellicose to its neighbours.
They have a belief they are a cut above the rest.
However, the richer one of the two, Mr. USA, does not even qualify to be in the house where Mr. China lives.
His small fortune is only 0.25 trillion and is highly suspect because 0.163 of it is made up of Special Drawing Rights (SDRs) from a captive organization called the International Monetary Fund (IMF).
These SDRs are more or less like a crypto currency and cannot be compared to gold and silver in real terms.
Mr. USA also claims to have gold worth 11 billion US dollars in his vault at Fort Knox, but even this tiny figure sounds false and dubious.
In any event, the tiny figure is insufficient to buy back even just 1% of all the dollars he has unleashed upon the world.
He also has in his reserves small amounts of Japanese yen and Euros not worthy of mention.
This means the US dollar is a fiat currency with no actual technical value and is accepted around the world merely on the basis of trust and love.
Mr. UK used to be a super power in ancient times when a piece of artillery called a cannon(ball) was regarded as a weapon of mass destruction.
He was able to amass great territorial booty all over the world as a result of owning this weapon.
For strange and unknown reasons he still believes himself to be a super power and also regards himself as “Great” beyond the measure of it.
But recently, Mr. China looked over the fence and told him face to face that he does not regard the noisy Mr. UK as a super power and that the small island mass that he owns is only good for travel, historical tourism and education.
The small fortune of Mr. USA shows plainly and clearly that he “cannot remain in power” to lead any organization such as NATO, G7 or G20.
Yet he has great delusions of grandeur that he can lead the whole world on an unknown pilgrimage in the company of false prophets.
So the situation at hand is that the exchange value of the US$ can be determined only in the house where Mr. China lives and the US department of treasury can do nothing to influence the exchange rate of the currency since Mr. USA has no reserves to use to defend it on the world markets.
Yes, the behemoths of the east can move the exchange value of the US dollar to any level they wish and this could collapse the whole US economy reducing that great super power to a failed state.
This failure of the currency will be accompanied by great angst, gnashing of teeth, food riots and turmoil such as has never been seen before.
A collapse of this magnitude could also easily result in a split of the union similar to the one that took place in the USSR in 1991.
The Book of Revelation sums it all up in Chapter 18 v 10 saying “Woe! Woe to you great city, you mighty city of Babylon!
“In one hour your doom has come.”
And there is no faster route for this to happen other than through the US dollar.
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