by Charles Goyette

January 30, 2012

The State of the Union is treated with utmost seriousness by the dominant news media. All four major TV networks and the cable news channels carry the event. My local newspaper devoted most of the front page and big chunks of the inside pages to its coverage: photos, accounts, sidebars, response, and analysis.

But it’s actually a spectacle that crowds out the real news. News about the impact American diplomacy is having on our future standard of living. News about the U.S. dollar’s reserve status winding down.

On the day of the State of the Union address, news flashed around the world – but not on your favorite network or in your morning paper – that India and Iran have agreed to end-run the U.S.-imposed sanctions on Iran.

They will use gold to do so.

Those sanctions, which have now been agreed to by the European Union as well, will ratchet up in July. Their enforcement means that banks and financial institutions involved in oil transactions with Iran will be barred from doing any business with financial institutions in the United States and Europe.

According DEBKAfile, a news source based in Israel, Iran has taken steps to bypass American and European banks and their currency desks altogether, agreeing instead to sell its oil to India for gold. China is expected to soon agree to use gold in buying oil from Iran as well. It’s a move that would leave the long-standing global dollar pricing of petroleum in tatters.

The gold-for-oil agreement means three things:

1. It hastens the unwinding of the U.S. dollar’s global reserve currency status.

The rest of the world is actively developing alternatives to the U.S. dollar. Although it will mean a falling standard of living for the American people, U.S. policies and secretaries of state, like Condoleezza Rice and Hillary Clinton, have spurred what will become a stampede away from the dollar. DEBKAfile also reports that both China and Russia have secret mechanisms already in place to pay Iran in non-dollar currencies for its oil. And only a month ago, China and Japan, the world’s second- and third-largest economies, agreed to develop direct yen/yuan trading, forgoing the dollar as the reserve currency intermediary.

2. It accelerates the global monetization of gold.

Both China and India have been aggressively adding to their gold reserves. Other countries are following suit. The Keynesians, who have been in charge of American monetary policy, having destroyed the value of the dollar and enabled our ruinous debt, may actually believe that gold is a “barbarous relic.” But it is clear that their opinions have little functional value in the real world. The world is turning to gold more and more as U.S. debt continues to mount. Indeed, is there a better alternative monetary unit to be found? Certainly, it’s not the euro. Jim Grant of Grant’s Interest Rate Observer says gold is the only answer to the question, “if not the dollar, then what?”

3. It reveals the growing global impotence of the U.S.

Long able to enforce reluctant countries to adhere in its missions and embargoes around the world, the U.S. is finding its will frustrated. Nations that once had to weigh the favor of the U.S. against their own commercial and domestic political interests are increasingly ignoring the global dictates of the U.S. State Department. In 2003, Turkey, where the prospect of a U.S. invasion of Iraq was wildly unpopular, refused even bribes to allow the U.S. to stage the invasion from its soil. Today, the threat of a U.S. or Israeli strike on Iran is meeting with growing disapproval, especially from countries like China and India rely heavily on Iranian oil.

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Tuesday, 25 October 2011 by Peter Simpson | Beijing

In recent months several Tibetan monks and nuns have set themselves on fire to protest China’s rule in Tibet.  The attempted suicides have drawn an angry response from Beijing officials who claim the protests are linked to acts of terrorism and sponsored by the Dalai Lama. The harrowing incidents mark an escalation in tactics opposing Beijing’s rule.

Since May, nine Tibetans have tried to commit suicide by setting themselves on fire.  The most recent was the first woman, a Buddhist nun.  Five monks have died from their wounds.  All of those who have attempted political suicide have been under 24 years old.

As in the other suicide attempts, the Buddhist nun named Tenzin Wangmo shouted out protest slogans calling for the end of China’s rule, for religious freedom and for the exiled Dalai Lama to be allowed to return to Tibet.

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Most of the members of Congress know little or nothing about economics. Which would go a long way in explaining how an ivory tower academic economist like Bernanke has been able to pull the wool over their eyes so easily for so long. Ron Paul is one of the few exceptions to this I can think of. The politicians and members of the Federal Reserve couldn’t pull all this shit if we were still on the gold standard. It’s their freakin’ elastic paper money that allows them to do so. But the American people really need to start educating themselves about these things also. How long will we allow ourselves to be led around like cattle by ignorant, conniving, hypocritical politicians?

iambinarymind:

“Last night, the Senate passed a bill that would impose tariffs on currency manipulators like China.”

:::if we are to follow this logic…shouldn’t the Senate also immediately begin imposing tariffs on its own State (USA)…I mean, “currency manipulation” is exactly what the Federal Reserve exists for…this is why it is so hard for me to consume any sort of “mainstream news”…the hypocrisy & propaganda is audacious:::