Why did they keep taking our "bounced" FRN check??

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BungeeBones's picture
BungeeBones
Status: Bronze Member (Offline)
Joined: Oct 2 2009
Posts: 38
Why did they keep taking our "bounced" FRN check??

Ever stop and wonder what was going on and why the world in 72 kept accepting and using the US dollar when Nixonclosed the gold window? it never made any sense to me at all. I mean, if I wrote checks to merchants and all of a sudden they couldn't cash them then, apart from being arrested, isn't it a sure thing they would stop taking my worthless check? Does it make any sense that they would save them? Of course not so why did the world do that?

 

The only possible answer I have that makes any sense is one I see here (but have seen the same idea in other articles) that says our currency only kept its value because the middle east continued to only accept payment for oil in US dollars. In other words, our FRNs became backed by their oil. The story goes on to present the reason they would do something like that which was that we agreed to protect them militarily.. And then it goes on to explain how, in the last decade or so there has been more and more unrest with only accepting FRNs by certain members of the oil producing nations. The earliest of the most vocal being one Saddam Hussein. Is it just a coincidence that the one person who wanted to dismantle the world wide FRN dominance gets overthrown and they don't find WMD? Well, the number 2 loudest voice against the FRN was who? I understand Iran has been there right along also. And now Chavez has joined the group as well and we have a long run on the dollar since.

I think the difficulty we have had solidifying the "victory" in Afghanistan and Iraq has shown we might not be all that well equipped to be such a great "protector" at all, especially against another superpower such as Russia or China.

 

And speaking of whom, does it make sense that an impoverished nation such as China save all those worthless pieces of paper? I think they saw the military advantage our paper money opened up and are taking advantage of it. Instead of building weapons of steel and dynamite with the FRNs they are going to use them to manipulate and gyrate our economy at will. During every war in the US (the Revolution, the Civil War, and World War 2) paper money and counterfeiting were tactics used by all sides. China, acting with the unity of a corporation, has enough economic clout to manipulate wildly any segment of our economy it wishes. If it wants gold to go up it buys gold. When it sells, it drives it down. The same for steel, corn,  oil anything.

.

 

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Re: Why did they keep taking our "bounced" FRN check??

Kissinger set up the "petro dollar" arrangement with-out any congressional approval, in fact Nixon didn't tell anyone about the policy that would forever ruin the value of the FRN (dollar). 

"During the 1970s a two-pronged strategy was pursued by the U.S./U.K. banking elites to exploit the unique role of oil in an effort to maintain dollar hegemony. One component was the requirement that OPEC agree to price and conduct all of its oil transactions in the dollar only, and two was to use these surplus petrodollars as the instrument to dramatically reverse the dollar’s falling liquidity value via high oil prices. The net effect solidified industrialized and developing nations under the sphere of

A unique monetary arrangement that was formalized in 1974 by Secretary of State Henry Kissinger, establishing the U.S.-Saudi Arabian Joint Commission on Economic Cooperation. The U.S. Treasury and the New York Federal Reserve would ‘allow’ the Saudi central bank to buy U.S. Treasury bonds with Saudi petrodollars.

Likewise, London banks would handle eurozone-based international oil transactions, loan these revenue via “Eurobonds” to oil importing countries.  The debt and interest from these loans would then flow to the dollar denominated payments to the International Monetary Fund (IMF), thereby completing the recycling of surplus petrodollars back to the Federal Reserve.

I am 100 per cent sure that the Americans were behind the increase in the price of oil.  The oil companies were in real trouble at that time, they had borrowed a lot of money and they needed a high oil price to save them.

He says he was convinced of this by the attitude of the Shah of Iran, who in one crucial day in 1974 moved from the Saudi view’…’to advocating higher prices...King Faisal sent me to the Shah of Iran, who said: Why are you against the increase in the price of oil?  That is what they want?  Ask Henry Kissinger - he is the one who wants a higher price the dollar.  -- F. William Engdahl, A Century of War

The secret and unilateral decision was made by the New York Federal Reserve and private international bankers.  Shortly after, the price of oil increased by 400% and the U.S. dollar was in great demand, everyone needed more; the U.S. was encouraged to print as much monery as possible.  Trade and budget deficits were greatly encouraged that helped ruin our economy and dollar.

Larry

Ken C's picture
Ken C
Status: Platinum Member (Offline)
Joined: Feb 13 2009
Posts: 753
Re: Why did they keep taking our "bounced" FRN check??
DrKrbyLuv wrote:

 

The secret and unilateral decision was made by the New York Federal Reserve and private international bankers.  Shortly after, the price of oil increased by 400% and the U.S. dollar was in great demand, everyone needed more; the U.S. was encouraged to print as much monery as possible.  Trade and budget deficits were greatly encouraged that helped ruin our economy and dollar.

Larry

Gee, and I wonder why the FED does not want to be audited.

Ken

 

BungeeBones's picture
BungeeBones
Status: Bronze Member (Offline)
Joined: Oct 2 2009
Posts: 38
Re: Why did they keep taking our "bounced" FRN check??

Thanks DrKibyLuv, that all fits nicely. Nixon had closed the gold window and the world should have been fleeing the dollar in droves.  I know a lot of oil producing countries have decoupled from accepting only dollars which precipated the multi-year decline of the FRNs value. Market forces are bringing things in line.

 

I wouldn't disagree at all with a private oil backed currency. if I get an Exxon gift card it is, in essence oil backed currency. From my perspective it matters little to me whether it is Exxon or McDonalds, these are merchant and product backed currencies. It's on its way there.

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