Is it relationships or something else that makes this world go around? Or is it a combination of both? For over 30 years I have always taught that it was all about relationships. You needed a relationship to get into a new account. You needed a relationship to get a law through. You need a relationship to do most things in our world today. In other words you can’t do it by yourself. In our government it is no different. In fact these relationships extend across the oceans into foreign countries. These relationships in government are a lot different from the relationships we have as individuals. In government or the economy side of things it is about financial gain. However you still have to have a relationship. The relationship might not necessarily be friendly, but that doesn’t matter in the world of politics. It’s a matter of survival in some cases. It’s interesting today that we are all complaining about the price of gas! Gas here in Michigan is over $3.79 a gallon and I bet you dollars to donuts that come next Thursday they will raise it another 15 cents. But first they will drop it 2 or 3 cents before they raise it by 20 cents! But as you read the rest of this post you will be thankful for $3.79 for a gallon of gas. Did you know the world has what is called a world reserve currency? Two Hundred years ago it was Great Britain and the pound sterling. They held that status for quite sometime until the United States became the world power that it has become over the history of our nation. The strong economic policies of past administrations, the development of the Federal Reserve, International Monetary Fund and others policies the US Dollar became the world reserve currency. Good for us, not so much for our friends in Great Britain. One of the benefits of being the worlds reserve currency is our ability to print money at will. No other country in the world is able to do that. Therefore countries like Brazil and others have run away inflation. With this ability to print money at will it allows us to spend far in excess of our tax revenues(intake). In normal economics you should be able to spend what you take in. You support your military, social programs and other programs with your intake or tax revenues. Now obviously we are spending a whole lot more than we are taking in, so our solution is to print more money and gor farther and farther into debt. Today the United States is in debt to the tune of $17 Trillion and by all estimates we are going to be reaching $28 Trillion in debt by 2028. Scary because someday that will all have to be repaid. How do you repay $28 Trillion in debts? Only way I know of is to raise taxes. One economist said recently that without continued or increased borrowing, we as a nation is in no better position to meet our unfunded liabilities than Detroit. Scary!! Okay so here is where the relationship and price of gas comes into play and probably why Obama bowed to the Saudi Prince, and trust me I am not trying to give Obama a free pass for bowing to a Saudi Prince but now understanding the issues and knowing that Obama is out of his neighborhood, I think he was scared to death knowing that his lack of economic policy and the relationship between Saudi Arabia and OPEC was mission critical. Even he could figure this one out! Here’s why? It is with Saudi Arabia’s help that we maintain the status of the worlds reserve currency. What Saudi Arabia and the other OPEC nations did was to create a demand for the US Dollar by pricing all their oil in the dollar and accepted only the dollar for payment for their oil. In an agreement established in the 1970’s OPEC created what is called Petro dollars. These Petro dollars engendered a consistent demand for the US Dollar, those stabilizing the dollar as the worlds reserve currency. With the demand for Petro dollars this enabled the US to maintain and expand its massive welfare state and deficit spending simply by issuing debt securities purchased by these foreign countries. Why do we need to maintain our status of being the worlds reserve currency? First it allows us to spend far more than our tax revenues. Simply print more money! Easy as 1-2-3. However in the past few years Iran, Russia and China have reduced their needs and desire to hold onto the dollar. China has made the largest moves in part because we are perceived as dysfunctional in our monetary and fiscal policies. Duh!! If we do lose the status of the worlds reserve currency we will be longing for the days when we were paying $3.79 for a gallon of gas and not $9.00 or more. There is already movement by the International Monetary Fund in the creation of the Special Drawing Rights or SAR’s that can be converted into any currency. There is also talk by the IMF of creating SDR denominational bonds which would reduce the central banks dependence on US Treasuries. So watch the Chinese. With our poor economy, lack of an economic policy that produces any growth for our economy, a poor fiscal policy, a move toward socialism, watch for China to move to make their currency the worlds reserve currency. If this happens interest rates will soar, mortgage rates will follow suit, stocks will plunge and if you thought 2008 was bad, consider something more than 10 times worse than 2008!! Perhaps this is why the conservatives are calling for a constitutional convention to force an amendment to the constitution calling for a balanced budget. This is a subject all of its own. My thoughts are this, if people realized the importance of this status and the possibility that someday we could lose the status and the ability to print money at will, they would think twice about drilling for oil in our own country. We have enough oil in our country to last for over 100 years but we can’t touch it? We have a president who stops the Keystone Pipeline, we have an administration that is shutting down coal plants. People this is all leading to losing the status of being the worlds reserve currency. It will be replaced by the SDR’s and when this happens life as we know it today will be done! So “relationships”. OPEC and the Saudi’s are a key relationship for the United States in more ways that one. And they know it. That’s why they are charging us over $100 a barrel when I can remember $18.00. They know the alternative is a whole lot worse, so pay up my friend. Because if you don’t pay me know you will pay later!! And severely!!! So it’s “Time to Wake Up America”. it’s time to get this debt under control, it’s time to develop strong economic policies that will put America back on top, it’s time to fund the military, we are the strongest nation in the world. Or we once were. We either right the ship now or soon we will be all calling out for Commrade Obama!!! Peace Out
Tag Archives: Saudi Arabia
Is it relationships or something else that makes this world go around? Or is it a combination of both? For over 30 years I have always taught that it was all about relationships. You needed a relationship to get into a new account. You needed a relationship to get a law through. You need a relationship to do most things in our world today. In other words you can’t do it by yourself.
In our government it is no different. In fact these relationships extend across the oceans into foreign countries. These relationships in government are a lot different from the relationships we have as individuals. In government or the economy side of things it is about financial gain. However you still have to have a relationship. The relationship might not necessarily be friendly, but that doesn’t matter in the world of politics. It’s a matter of survival in some cases.
It’s interesting today that we are all complaining about the price of gas! Gas here in Michigan is over $3.79 a gallon and I bet you dollars to donuts that come next Thursday they will raise it another 15 cents. But first they will drop it 2 or 3 cents before they raise it by 20 cents! But as you read the rest of this post you will be thankful for $3.79 for a gallon of gas.
Did you know the world has what is called a world reserve currency? Two Hundred years ago it was Great Britain and the pound sterling. They held that status for quite sometime until the United States became the world power that it has become over the history of our nation. The strong economic policies of past administrations, the development of the Federal Reserve, International Monetary Fund and others policies the US Dollar became the world reserve currency. Good for us, not so much for our friends in Great Britain.
One of the benefits of being the worlds reserve currency is our ability to print money at will. No other country in the world is able to do that. Therefore countries like Brazil and others have run away inflation. With this ability to print money at will it allows us to spend far in excess of our tax revenues(intake). In normal economics you should be able to spend what you take in. You support your military, social programs and other programs with your intake or tax revenues. Now obviously we are spending a whole lot more than we are taking in, so our solution is to print more money and gor farther and farther into debt. Today the United States is in debt to the tune of $17 Trillion and by all estimates we are going to be reaching $28 Trillion in debt by 2028. Scary because someday that will all have to be repaid. How do you repay $28 Trillion in debts? Only way I know of is to raise taxes. One economist said recently that without continued or increased borrowing, we as a nation is in no better position to meet our unfunded liabilities than Detroit. Scary!!
Okay so here is where the relationship and price of gas comes into play and probably why Obama bowed to the Saudi Prince, and trust me I am not trying to give Obama a free pass for bowing to a Saudi Prince but now understanding the issues and knowing that Obama is out of his neighborhood, I think he was scared to death knowing that his lack of economic policy and the relationship between Saudi Arabia and OPEC was mission critical. Even he could figure this one out!
Here’s why? It is with Saudi Arabia’s help that we maintain the status of the worlds reserve currency. What Saudi Arabia and the other OPEC nations did was to create a demand for the US Dollar by pricing all their oil in the dollar and accepted only the dollar for payment for their oil.
In an agreement established in the 1970’s OPEC created what is called Petro dollars. These Petro dollars engendered a consistent demand for the US Dollar, those stabilizing the dollar as the worlds reserve currency. With the demand for Petro dollars this enabled the US to maintain and expand its massive welfare state and deficit spending simply by issuing debt securities purchased by these foreign countries.
Why do we need to maintain our status of being the worlds reserve currency? First it allows us to spend far more than our tax revenues. Simply print more money! Easy as 1-2-3. However in the past few years Iran, Russia and China have reduced their needs and desire to hold onto the dollar. China has made the largest moves in part because we are perceived as dysfunctional in our monetary and fiscal policies. Duh!!
If we do lose the status of the worlds reserve currency we will be longing for the days when we were paying $3.79 for a gallon of gas and not $9.00 or more. There is already movement by the International Monetary Fund in the creation of the Special Drawing Rights or SAR’s that can be converted into any currency. There is also talk by the IMF of creating SDR denominational bonds which would reduce the central banks dependence on US Treasuries.
So watch the Chinese. With our poor economy, lack of an economic policy that produces any growth for our economy, a poor fiscal policy, a move toward socialism, watch for China to move to make their currency the worlds reserve currency. If this happens interest rates will soar, mortgage rates will follow suit, stocks will plunge and if you thought 2008 was bad, consider something more than 10 times worse than 2008!!
Perhaps this is why the conservatives are calling for a constitutional convention to force an amendment to the constitution calling for a balanced budget. This is a subject all of its own.
My thoughts are this, if people realized the importance of this status and the possibility that someday we could lose the status and the ability to print money at will, they would think twice about drilling for oil in our own country. We have enough oil in our country to last for over 100 years but we can’t touch it? We have a president who stops the Keystone Pipeline, we have an administration that is shutting down coal plants. People this is all leading to losing the status of being the worlds reserve currency. It will be replaced by the SDR’s and when this happens life as we know it today will be done!
So “relationships”. OPEC and the Saudi’s are a key relationship for the United States in more ways that one. And they know it. That’s why they are charging us over $100 a barrel when I can remember $18.00. They know the alternative is a whole lot worse, so pay up my friend. Because if you don’t pay me know you will pay later!! And severely!!!
So it’s “Time to Wake Up America”. it’s time to get this debt under control, it’s time to develop strong economic policies that will put America back on top, it’s time to fund the military, we are the strongest nation in the world. Or we once were. We either right the ship now or soon we will be all calling out for Commrade Obama!!!
Peace Out
Time to wake up America!! 