FPI / March 16, 2023
Soon after Silicon Valley Bank went bust on March 10 in the second largest bank failure in U.S. history, the Biden administration stepped in and bailed out SVB’s depositors, the majority of whom are wealthy donors to the Democrat Party.
“For Washington, this was no big deal,” independent journalist Steve Rodan noted in a March 14 substack.com analysis.
Team Biden “has been printing so much money over the last three years that it can bail out anybody, regardless of size. It's that easy,” Rodan wrote.
In the past, the dollar had “stood on nothing more than the reputation of the United States. This was the most powerful country in the world, and it could force anybody to trade in the American currency,” Rodan added.
The prime example was Saudi Arabia, which agreed to sell its oil to the world in U.S. dollars in return for American security guarantees.
“Over the last decade, Riyad has regarded U.S. guarantees as worthless,” Rodan noted.
And the rest of the world is not impressed, either.
“Unlike most Americans, foreigners have felt the sharp decline of the dollar in comparison to other currencies. Many of them sold their dollars and bought gold and other commodities that are actually worth something,” Rodan wrote. “We're talking about U.S. allies, particularly Germany and other European countries -- hedging their bets against the collapse of the American currency.”
No nation has done more during the Biden administration to marginalize the U.S. dollar than China.
“Beijing has persuaded more and more of its allies to use the yuan for bilateral and third-party trade,” Rodan wrote. “Why? Because the yuan can be exchanged for gold. The U.S. dollar can only be exchanged for government securities, and SVB has shown how worthless those are.”
China’s Belt and Road Initiative, which encompasses all of OPEC, operates on the yuan and other currencies. But not the dollar. The Beijing-dominated BRICS has gone the same way as have the Shanghai Cooperation Organization. These alliances include such powerhouses as Brazil, Iran, Russia and South Africa, which control far more of the world's natural resources and population than the West.
And now China has reeled in Saudi Arabia. Riyad has agreed to use the yuan in oil exports to China.
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