Sunday, July 6, 2014

The Boiling Frog Syndrome: America's Decline Might Be Sudden

A chain of events leading to sudden political and economic upheaval in America is conceivable and not entirely out of the question.  Questionable US monetary policies, our political weakness at home and in the world, and the alienation of our traditional allies like Saudi Arabia could have a sharp and sudden impact to this country.  Idiots like John Kerry and Barack Obama will never see it coming (or are they really enemies of this country?).  The US might be like that metaphorical frog sitting in a pot of water on the stove.  The water slowly gets hotter and the frog is supposedly boiled alive.

Obama Administration's Weakness Creates a US Power Vacuum in the World

Well before the recent public "deal" with Iran's Rouhani, Obama was already removing the highly effective sanctions that forced Iran to the bargaining table.  See my blog on the topic. This is appeasement in every sense.   It is very likely that Obama's "reset" with Iran will end in disaster just like his entirely discredited Russian "Reset."  In fact, he is reminiscent of Neville Chamberlain's appeasement of Hitler in the 1930s.  Liberals like Obama, who are immune to facts and reality, are dangerous and their policies lead to failure if not war.  They never see the truth to the "peace through strength" finally and well-proven by Ronald Reagan.   War may come again to US shores.

Recent events in Syria and now Ukraine has shown the "Russian reset to be a complete and utter joke of a "policy."  Russians thugs are continuing to invade Eastern Ukraine as we speak, in part, because of the weakness and naivete of Obama that has already been proven in Syria.  Apart from the Syrian debacle, Obama has ill-advisedly left Iraq with no American presence and it is re-collapsing in failure meaning more Iranian and ISIS influence is guaranteed.  Obama is about to completely retreat from Afghanistan too.  In such a vacuum, Russia, terrorists and Iran are gaining in influence and power. 

Obama, who has stumbled and equivocated for years has helped to create a perception of a US power vacuum in the world. I say it's intentional as Obama is an enemy of our country  Putin (and China and Iran) have been filling this vacuum.  Saudi Arabia is in shock at the parade of incompetence.

Be Careful of the Allies That You Alienate, Especially Saudi Arabia

By playing "nice" with the murderous Iranians in an effort to have a foreign policy "victory," Obama has thoroughly annoyed our allies of Saudi Arabia, Israel, and many others.  But it's the Saudi's that could unleash real disorder for US if ignored.

The Saudi's hate the Iranians and have watched the Iranians (and Russian) interests advancing in the region due to the incoherent and mindless American administration. 

I hear word is that Saudi is about ready to completely throw up their hands with the US as we conclude an ill-advised agreement with Iran.   I understand that they have signaled a meeting with the new and real power broker in the world, Vladimir Putin.  After all, vacuums will be filled.

Could it be that the inadvertent (or is it?) aiding and abetting of Iran, and the loss of another long-standing alliance with Saudi Arabia, combined with the US policies of money printing and dollar debasement, might lead to a dollar (and economic) crisis for the US and world?  It's possible.

The Nuclear Option That Could Begin the Breakdown of the US Dollar Reserve Status

Even though it's unlikely for now, the potential chain of events might start with Saudi's willingness to accept other currencies for oil payments rather than just dollars.  Accepting all currencies for payment, rather than solely dollars, is hardly a radical concept.  (In fact, it would be normal except for the Saudi's leadership in 1975.)  Iran, China and Russia are already making deals for oil bypassing the US dollar in an effort to displace and diminish US power.  If Saudi made a change, Iraq would quickly follow suit since they are increasingly aligning themselves with Iran (thanks to the US power vacuum).  Egypt is hardly sympathetic with the US these days too.  Libya could jump on the bandwagon too.  China would renew calls for a new reserve currency again at that moment.

The breaking of the petrodollar's status is a nuclear war without the nukes.  If Saudi makes such a move and it is followed by other oil exporters in the region, the demand for the dollar could fall significantly.  Demand for treasury notes and bonds would also drop (due to less petrodollar recycling) leading to a fall of the dollar and/or  rising US interest rates.   Confidence is a delicate thing.  Loss of US dollar reserve status would be a huge blow for the US and cause a test of our ability to run huge trade budget deficits forever. 

The economic and political decline of America could become apparent literally overnight.  Suddenly, US citizens might wake up one morning and find themselves significantly poorer vis-a-vis the rest of the world due to a decline in the dollar.  They can't say that they weren't warned.  Ron Paul, for one, has warned of this possibility for many years now, although he couldn't have predicted the chain of events.  The US might be compared to a frog sitting in a pot of water on a stove and suddenly finding itself cooked.

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