More Golden Proof: The Dollar Is Totally Screwed

Of course, we were specifically warning of the slow, gradual and yet again-inevitable-demise of the oh-so important Petrodollar which has been a critical "Straw" of the milkshake theory's faith in global demand for the USD. But as the facts are now making increasingly clear, that "Straw" is no longer sucking on a USD which much of the world now considers, well, a Dollar that sucks.

One, for example, can sell oil in London for gold, then transfer that gold to a Yuan trade hub where the gold is converted to CNY, and then use that CNY to buy oil outside of the USD. Or stated more simply, gold will slowly be filling the delta in a BRICS+ oil trade once ruled by the USD, which mean's gold's price, hitherto controlled by NY and London, is about to return to actual fundamentals rather than OTC price fixing.

Thanks to folks like Nixon and now Biden, we are a looonnnggg way from the Bretton Woods USD. Stated simply, broken trust has made the once tolerated USD less tolerable, and like a genie that can never be put back in the bottle again, the USD will never be fully trusted again, which means demand for that Dollar will never be the same again.

This explains why the Fed of that same period hiked rates from 5.25% to over 18% to make the USD more attractive to OPEC. BLACK Gold Colliding with Real Gold = A GREENback in the RED. But folks, with public US debt now racing past $34T, the current Fed has no ability to put such rate-hike lipstick on a high-debt pig of the current magnitude, which means Powell, unlike Volcker, simply can't make the USD attractive to OPEC in 2024 like it could in the late 1970's.

Given the disconnect between current USD oil production and USD gold production, the potential for an historically significant repricing of gold is as powerful as good ol' fashioned supply and demand.

This will be a perfect storm of more IOU issuance colliding with even higher rates and hence higher costs, which will in turn only be payable if the Fed prints even more trillions of USDs out of thin air to pay Uncle Sam's bar tab.

Needless to say, such inevitable synthetic liquidity will lead to further rather than less debasement of an already debased USD, proving that Hemingway's predictions above make him a far more deserving recipient of the Nobel Prize in Economics than Bernanke. 

https://goldswitzerland.com/more-golden-and-black-gold-proof-the-dollar-is-totally-screwed/