{"id":50667,"date":"2018-09-01T04:15:31","date_gmt":"2018-09-01T11:15:31","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=50667"},"modified":"2018-09-04T10:29:57","modified_gmt":"2018-09-04T17:29:57","slug":"black-coffee-1-september-2018","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id50667-black-coffee-1-september-2018.html","title":{"rendered":"Black Coffee: Has The Almighty Dollar Finally Worn Out Its Welcome?"},"content":{"rendered":"

\"\"<\/a>It’s time to sit back, relax and enjoy a little joe<\/em> …<\/p>\n

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance.<\/p>\n

And away we go …<\/p>\n

“Whenever destroyers appear among men, they start by destroying money, for money is man’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values.” <\/em><\/p><\/blockquote>\n

— from Francisco’s “Money Speech,” in Ayn Rand’s Atlas Shrugged<\/em><\/strong><\/p>\n

“The dollar is our currency — but it’s your problem.”<\/em><\/p><\/blockquote>\n

— US Treasury Secretary John Connolly to the G-10 in 1971<\/strong><\/p>\n

Credits and Debits<\/strong><\/p>\n

Debit:<\/strong><\/span> Did you see this? With bitcoin down more than 60% from last December’s all-time high of $19,783 — and many other cryptocurrencies off more than that<\/em> this year — some officials are beginning to worry about potential suicides<\/a> by late investors who were caught holding the bag.<\/p>\n

Credit:<\/strong><\/span> Then again, not everyone is depressed. The latest Conference Board survey found that economic confidence rose<\/a> in August to its highest level since October 2000. I guess they forgot to poll the cryptocurrency holders.<\/p>\n

Debit:<\/strong><\/span> US household confidence belies the fact that one-third of all Americans have $5000 — or less<\/a> — saved for their golden years. The good news is some Americans are more prepared: 25% have $200,000 or more stashed away, while 16% have between $75,000 and $199,999, with an average total of $84,821. The bad news is that still won’t get it done for most people.<\/p>\n

Credit:<\/strong><\/span> In other news, it’s becoming increasingly obvious that the world is finally fed up<\/a> with the dying debt-based international monetary system anchored by the US dollar. Part of that is being driven by the declining value of those dollars, which are being debauched at an ever-increasing pace. However the main catalyst appears to be the United States’ insistence on weaponizing the system for political leverage.<\/p>\n

Debit:<\/strong><\/span> The failing monetary system is one reason why China took steps to challenge the US dollar’s dominance with the March launch of an oil futures contract backed by the petro-yuan<\/a>. Unbridled dollar hegemony is why China and Iran have also agreed to stop using the greenback in global trade. And if that wasn’t enough, China is ignoring US sanctions by increasing purchases of Iranian oil. Imagine that.<\/p>\n

Credit:<\/strong><\/span> As Craig Hemke points out<\/a>, it’s not a stretch to conclude that America is trying to impede the rise of the so-called China-led “One Belt, One Road<\/a>” economic bloc, based upon some of the major nations currently being targeted with US financial sanctions. Take a look:<\/p>\n

\"\"<\/a>

(Click to enlarge) Source: SprottMoney<\/p><\/div>\n

Debit:<\/strong><\/span> After the US doubled down last week by unveiling a new set of sanctions against Russia, Moscow promised to retaliate by accelerating its own efforts to abandon the US dollar<\/a> in future trade transactions. In other words, when it comes to the dollar, Russians are intending to just say “nyet<\/em>!” (I know … but it’s the only quip I had in the bag.)<\/p>\n

Debit:<\/strong><\/span> By the way, it’s not just traditional American adversaries who are pushing back on the US dollar; her allies are too. This week Germany’s finance minister said, “Europe shouldn’t allow the US to act over our heads and at our expense. For that reason its essential that we establish payment channels that are independent of the US<\/a>, (including) an independent SWIFT system.” Uh oh.<\/p>\n

Debit:<\/strong><\/span> Meanwhile, France said they’re also working on alternative financing solutions to sidestep American sanctions<\/a> against countries such as Iran, including a possible role for other central banks. Of course, nobody in America should be surprised; that happens when you stop being a team player. Oh … and so does this<\/em>:<\/p>\n