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Page added on February 27, 2007

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Zero Degrees of US Dollar Separation

The last several months have provided a keen lesson in currency defense by a nation which has been written off in many circles as owning a dead and hopeless currency. Some key inter-related feedback loops have been on my radar, each vitally important and changing, which underscore in my viewpoint how major markets are inseparable, each inter-connected, and integrally important if the USDollar is to avoid a much deserved crash. A quip of mine at a conference one year ago centered on my claim that the USDollar was backed by the full force of the US Military.


While true in some respect, the actual defense day to day entails a green triangle not to be confused by the iron triangle which fortifies the Pentagon funding, namely the US Congress, the defense contractors, and the lobbyists when grease the funding wheels. Complementing this death grip which has contributed over decades to do irreparable harm to the USDollar, the green triangle consists of holding down gold in a straight jacket, and holding down crude oil in a giant clamp. Never stated is its purpose to reinforce the USDollar from its implied inverse leverage device as hedge funds run for cover. The greenback and gold shine in opposite directions. The greenback and crude oil flow in opposite directions. Goldman Sachs has been at the controls on most of the master machinery.

…Together, holding back the gold price and the oil price has worked well in keeping firm support for the crippled USDollar. Help for gold suppression comes from European central banks and the Bank of Japan, the 51-st state by certain claims. Help for oil suppression comes from Saudi Arabia, the 52-nd state behind Japan by certain claims. All the while the US Military exerts its broad influence, holds the financial allies in check, forces them to toe the line, and conducts its own secretive business ventures which pay the bills. When a nation owns the world reserve currency, it has the opportunity (not the right) and the privilege (with attendant duty) to act responsibly. The United States has abused on both grounds in a manner which will go down into the history books, with the result being ushered through a transition from benefactor nation with a kind hand to a dominant bully with a crushing hand.


The USDollar will be defended with gold levers, with oil levers, and with military levers as the American Empire fades anything but quietly. Natural forces oppose all three devices abused as tools. One should not regard it as unpatriotic to notice what occurs, since usage of the brain is an inalienable human right. The gold levers are opposed by Asian central banks, principally China and Russia, the outspoken rebel with nuclear capability, tremendous ambition, and willingness to use energy as a formidable weapon. The oil levers are opposed by Mother Nature, who is never to be denied for long. The latest public natural victim has been the Mexican Cantarell giant oil field in rapid 15% annual decline. The military (called in true Orwellian style



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