Cost, abuse and danger of the dollar

Linked with Secrets of money, interest and inflation and all its links.  – Published on Court Fool.Info, by Rudo de Ruijter, not dated.

… 3. Bankrupt and still continuing:

On  you can see the current debt and you can see how much it grows each second… 45 % of it is to be paid back to foreign borrowers. The foreign debt is that high, that the US cannot pay back her debt anymore. The US is bankrupt.

Nevertheless dollars are still traded normally. For the purchase of oil and gas they are still needed. And, misled by an apparently healthy exchange rate, the world trade continues to do its transactions in dollars. Business as usual? 

According to the usual logic of economics, a lower rate of the dollar should lead to more exports from the US and less imports by the US, as foreign importers can buy cheaper in the US then. However, as long as foreigners are mad enough to accept dollars, the US doesn’t find it a problem to issue some more of these green debt bills.

Pay a bit more for Chinese socks and electronics from Japan? No problem. The US just increases the imports and foreign debt a bit harder. Paying more dollars for a product means inflation. And one percent of inflation means that at the same time the value of the tremendous foreign debt decreases with one percent. So the US has no interest at all in putting a break on its imports!

In the oil trade, generally, a lowering dollar rate does have a logical consequence. Oil exporters will not accept a lower return. When the dollar falls with 10 percent, they will raise the oil price 10 percent, so the value remains the same.

If US-dollars are no longer necessary to purchase oil, there is no advantage for the rest of the world trade to use the dollar – only disadvantages. The dollar does not represent any weight in gold anymore and the enormous debt will lead to the logical disastrous consequences. The dollar would collapse.

And when foreigners don’t accept dollars anymore, the US cannot print dollars to shop on the expense of the rest of the world. US could not pay its expensive army. It would loose its influence …

… 8. Green cancer cells:

Because the US let its “foreign debt” increase indefinitely and even uses military power to keep the related advantages going, we cannot speak of a normal foreign debt, like we know it in trade relations among other countries of the world. What the US does is robbery. You can also call it swindle or an imperial tax imposed on the users of dollars. But there is more.

Each dollar bill is an IOU of the US, a promise to give something in return. Due to the gigantic quantities the US has put into circulation, the country is not able to redeem these debts. It is bankrupt. Only the rate of the dollar keeps up the appearance, that nothing is afoot. The obligation to pay gas and oil in dollars keeps a permanent demand going.

However, the rate is held in shape artificially, like by the hoarding of the central banks in China, Japan, Taiwan and other countries. Because these hoardings mean an impoverishment of these countries and because the US speeds up the debt building indefinitely, there will be a moment that these central banks have to stop hoarding dollars. So the question is not IF the dollar collapses, but WHEN.

Because traders are misled by the apparently healthy dollar rate, many still accept these IOU’s, which nestle like green cancer cells in all economies of the world. The result is ineluctable. All infected banks, enterprises and economies will be dragged along the day the demand for dollars sags and the US-imperium collapses.

(full long text and Notes 1 to 21).

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