by Jim Willie, Gold Seek: The King Dollar is mortally wounded. Many notice but the masses seem largely unaware. Since 1971, the Gold Standard has been removed from its anchor position. But since 1973, the Petro-Dollar has taken its place. It has called for crude oil sales led by the Saudis and OPEC to be transacted in USDollar terms, for oil surpluses to be stored in USTreasury Bonds, and for some kickbacks from the Saudis to the USMilitary complex for weapons purchases. Of course, the US is ready willing and able to create strife and to foment wars whereby the Arab oil monarchs will need more weapons. Since 2014, many events have pointed to the crippled condition of the important link between the USDollar and crude oil. The price has plunged by 50% of more, and not recovered. It is currently lurching in the nether bounds near the $45 level. Anything less than $65 to $70 per barrel is very dangerous for keeping the oil sovereigns afloat and for keeping the US energy sector solvent. Witness the Wall Street banks having tremendous problems with impaired bonds and toxic energy portfolios. They seem not resolvable. They cannot keep the oil price over $50, a sign of their impotence.
Not enough financial analysts connect the new normal of a much lower crude oil price with the eventual vanishing act of the Petro-Dollar. The Wall Street banks are deeply exposed on their entire energy portfolios, which include both bonds and commercial loans. Tens of $billions will have to be written off as loss, beyond the $billions already declared as losses. These corrupt banks have worked their magic to lift the oil price above the $50 level, but failed. They worked the task for over a year, but failed. They need an oil price over $60, but failed. The Saudis did not help the cause, by their ongoing extra output to finance their filthy Yemen War. The Saudis earned the anger of their OPEC partners, especially the Gulf Arab allies. The Wall Street banks deeply resent the Saudis for this deed, but the USMilitary complex loves the Saudis. The other Arab oil producers also harbor consider rancor toward the Saudis, who really have no friends in the entire Persian Gulf region. They are so worthy of a palace coup, which would bring clamors of rejoicing in many corners of the West if it were to occur. The day might be close.
The Saudi warrior prince just made more enemies in-house with the push to become crown prince. The dozens of half-brothers will plot against him. Many analysts believe an internal collapse in Saudi-land cannot occur, due to control by the royals of the key factions like the military and religious center. Keep in mind that bankruptcy has a way of sweeping factions aside. A failed ARAMCO stock deal could trigger some internal battles, and reveal the bankruptcy in addition to the lies on national oil reserve wealth. The kingdom’s bankruptcy could become a major topic soon, as the Jackass has been harping on. Be on the lookout for a strange suspicious death event for the king, which could trigger violent episodes from rival half-brothers, many of whom have had their families cut out of wealth distribution (confiscation) for decades.
PETRO-DOLLAR IS DEAD The Petro-Dollar is a dead standard. The important functional parts, such as the derivative machinery, have been dismantled over the last four years. A key hint on the massive rift between the US and Saudis was the contrived legal prosecution cases with the big Swiss banks. It seems the Swiss simply bent over and took it in the rear flank from the Washington NeoCon criminals. No precedent exists for the USGovt to sack control of a sovereign nation’s big banks like what happened with UBS and Credit Suisse. Pay no heed to the formal charges of tax evasion and Iran sanction violations. These were pretexts for stealing the Arab gold in Swiss bullion banks. Notice that a year later, the Saudis worked to move hidden gold hoards into the safe confines of Deutsche Bank. The threads are complex, since the Qataris pulled their funds out of D-Bank, thus rendering it more exposed. Some of the most convincing evidence of a dead defunct Petro-Dollar is the multiple fronts of war to defend the USDollar. Back in 2005, the Jackass wrote often about how in several years the King Dollar will be defended by war. It is here.
Right here, right now, the numerous hot spots rage with war, sanctions, and boycotts within the Arab monarchies. The Jackass regards sanctions as a clear indication of failed foreign and economic policy. A crystal clear observation is that unity behind the USDollar is gone. The failure of the Petro-Dollar is a signal to all countries to bail out on the USD and to find a better linkage for commerce and banking. The Eurasian Trade Zone does precisely that on both fronts.
FRACTURED GULF MONARCHIES The recent events within the Gulf Region have been extremely disruptive. Clearly the region is permanently fractured. The battles between the Saudis and Qataris date back to conflict over the Muslim Brotherhood and events in Egypt. The conflict has many sides which continue to erupt. It seems that the Qataris have taken the cultural lead over the Saudis in areas of education, symphonies, and media. The ISIS guerrilla element also complicates the relationship. The Saudis and Qataris support rival guerrilla groups. The ISIS organization is a creation of Langley and Mossad, of the USGovt and Israeli Govt, for the purpose of conducting proxy wars and instilling terror on the Syrian front. Russian President Putin conducted a Powerpoint Presentation of the vast financial links from Washington and Israel via the Swiss banks to fund ISIS groups, all done as a sideshow to a G-7 Meeting last year. It was as intriguing as it was shocking, but not covered by the lapdog Western Press. Their changed names and multiple groups only add to the confusion, which pleases both Washington and their controllers in Israel. Soon the truth will come out that not only is the war over the competing natural gas pipelines, but over huge Leviathan energy deposits which extend into the Golan Heights. This territory is hotly disputed for 20 years, originally Syrian land, but taken by Israel. It contains a huge amount of oil & gas.