Thursday, May 08, 2014

Economic Collapse! How Did We Get Here? (Part 5)

“The Biggest Megapolitical Shift in 40 Years is Upon Us”

You’re about to find out the shocking truth about why the powers that be saw the need to launch an unprovoked full-scale attack on an entire nation…why they saw the need to take out their controversial leader…and bring about the wholesale destruction of an economy that had soared from being the poorest in the world to one of the richest, safest, and most progressive on the planet.
It’s not what the mainstream media have led you to believe.
In fact, it’s quite the opposite.
Once you understand the fundamental reasons behind the attack, and the dramatic shifts and economic reversals it has already begun to ignite, you’ll realize the true impact it is about to have on your wealth…
As I said, this was a war like no other.
It will mark a tipping point not just in American military history, but also in American monetary history.
The nation I’m talking about is Libya.
And the man at the center of this conflict (the man Nelson Mendella called: “one of the greatest revolutionary legends of our time”) was Muammar Gaddafi.
Gaddafi was painted as an unscrupulous dictator by the western press for many decades. While admittedly he did spend much of this time ruling with an iron fist and clinging to power, he also brought forth revolutionary changes...ones he hoped would not just extend to the borders of his own country, but stretch to Africa and beyond.
While the West viewed his ideas as dangerous, and as potentially destabilizing to the global economy, and to western dominance, others saw them as progressive, and the way forward.
Ironically this new message Gaddafi had begun to preach was not the kind of usual political rhetoric you’d expect to hear pour forth from the mouth of a maniacal dictator...
On the contrary, he was speaking the kind of words you’d expect to hear pour forth from the mouth of an enlightened democrat.
The Dictator Had Become the Democrat...
And the democrat had become the dictator...
Gaddafi throughout his reign had shown an amazing ability to adapt and to learn from the mistakes he made. And not just his own mistakes, but those made by the big Eastern and Western political leaders that surrounded him too...leaders who were still trying desperately to cling to power that belonged to an Old World Order.
While Gaddafi did indeed make some enormous blunders along the way, the older he got the harder he tried to atone for his checkered past...
In fact, by the end of his 42-year reign he accomplished more for his country and his people, than our Presidents and Prime Ministers had done for any of our so-called “democracies” during that same period...
In 1951, Libya was officially the poorest country in the world. By 1979, Libya had a per capita income and standard of living that exceeded that of Italy and the U.K. And before the western military machine intervened in 2011, Libyans were enjoying a quality of life greater than that to be had here in the U.S. after the credit crisis!!
And he did it NOT by centralizing power throughout the country, as the western press would have you believe, but rather by decentralizing it! There were no mayors, governors...or Senates or Parliaments. Instead each and every Libyan had the same say and power, and most issues were handled at the local level.
And eventually through a long series of reforms Libyans began to enjoy benefits the likes of which we could only dream of here in America...
For instance:

Bank loans were given to all citizens at 0% interest by law.
Libyan’s received a 50% government subsidy on the purchase of a car.
Everyone in Libya was housed... It was considered a human right.
Each month every family received roughly $400 from the profits of Libya’s oil sales.
Education from kindergarten through post-graduate school was free. As was all healthcare.
Literacy jumped from 25% in the pre-Gaddafi era to 83% today.
25% of Libyans had a university degree.
If a Libyan was unable to get employment after graduation, the state would pay the average salary of the person’s profession, until employment was found.
If a Libyan wanted to take up a career in farming, he would receive the farm, including: land, house, equipment, seeds and livestock – all for free. It was an incentive Gaddafi used to move the country toward agricultural independence.
The price of gasoline was a token $0.53 per gallon.
Fifteen cents would buy 40 loaves of bread!
Electricity and water were also considered human rights and were also free for everyone...
At the time of Gaddafi’s death, he enjoyed a staggering 90% approval rating from his people. Compare that to Obama’s current all-time low rate of just 40%!
Libya also (unlike America) had no debt, boasted some of the largest surpluses of any country in the world, and enjoyed one of lowest crime rates on the planet.
In fact, the country was known regionally as: “The Switzerland of North Africa”
And while Gaddafi was turning what was once the world’s poorest nation into a scintillating economic and political oasis in the middle of the Sahara Desert – he was also turning it into a literal one as well – by digging deep wells.
When surveys were conducted in the 1950’s to locate potential oil deposits under the Libyan desert (the Sahara stretches across more than 70% of the country,) geologists not only found the 5h largest petroleum reserve in the world, they also found even larger deposits of an equally precious resource...
They discovered Libya is awash in enough fresh water to last 6,000 years!
But the water, like the oil, had been trapped in aquifers beneath the sand since the last Ice Age.
One of Gaddafi’s greatest achievements was the construction and completion of the most extensive and expensive irrigation project in history.
He constructed a network of concrete pipes that crisscross the desert in order to pump fresh water into each and every kitchen, bathroom, garden and farm in the country.
Today the sand dunes are turning green as agriculture spreads across this once arid landscape.
Locals called it: “The 8th Wonder of the World”
So why did the major western powers, led by the US, feel the need to go and bomb this nation back into the Stone Age?
...Targeting civilians... critical infrastructure...schools, homes, hospitals and even Gaddafi’s Great Man-Made River Project...
When you look beneath the surface, the picture becomes very clear.
Libya had massive oil reserves... water supplies...
And it had gold...
A lot of gold...
One hundred and forty-four tons to be exact...
The second largest amount of any nation in Africa.
For a country of only six million people, per capita, that’s about 20 times more than the U.K.
But even beyond these “obvious reasons,” there was a more sinister logic...
Gaddafi had successfully established and launched the African Union – a political bloc of 54 nations with a combined population of nearly 900 million people...
And he was ready to take it to the next level...
Mummer Gaddafi was preparing to unite the African continent economically with a common currency.
A Currency Almost as Old as Gold...
A currency whose purchasing power at its height some 3000 years ago, stretched from Spain in the West to India in the East...
He was getting ready to re-launch the ancient Arab gold dinar...
The gold dinar would have been the first fully gold-backed currency to grace the global economy in over 78 years!
Gaddafi would have, overnight, begun to rewrite the rules of an entirely new currency game.
He was one of the few people with the resources to make this enormous vision a reality, and was ready to use the gold reserves of Libya to build a new U.S.A....
A United States of Africa...
He was also ready to throw his own wealth into the equation to make his dream of a pan-African economy come to life.
Gaddafihad a “net worth” of over $200 billion dollars – making him ten times richer than King Abdullah of Saudi Arabia!
At the time of his death, Gaddafi’s fortune ranked him as the 8th wealthiest person in all of history – placing him between William The Conqueror and Henry Ford...
Ultimately, this Gold Dinar had the power to unseat the U.S. dollar as the world’s reserve currency.
The implications not just for America, but for all the nations who trade oil and resources with Libya and Africa, would’ve been enormous to say the least…
French President Nicolas Sarkozy reacted by going so far as to call Libya:
A threat to the financial security of mankind”
This is the real story that has been suppressed...
What Gaddafi was indeed doing was launching a full-scale attack against the petrodollar.
And while America may have had success in temporarily squelching Godaffi’s attack on our currency, it is by no means the end of the war.
In fact, it’s just the beginning…
Before I tell you about the landmark events that Godaffi’s movement has ignited, let me first tell you why the preservation of petrodollar power is so important to America…
The petrodollar was a game-changing deal that Washington made with OPEC 40 years ago.
At the time OPEC wanted to create a Petrocurrency in which to trade its oil. This currency however was to be made up of a basket of currencies, which although was to include the dollar, was also to include gold, the Japanese yen, the French franc, the British pound and the German mark.
America had recently hit peak oil and had abandoned the gold standard.
After racking up enormous debts on a failed war in Vietnam…we were fast running out of oil…of gold…and of money.
And the inflation monster, which had barely raised its head since World War II, was suddenly back from the grave…terrorizing the streets again.
Our supremacy was being challenged by the remarkable rise of the emerging markets of the East like Japan, South Korea and Taiwan.
Something had to be done.
And the Powers that Be, spied an ingenious little way to keep the empire’s engine running….
President Nixon convinced King Faisal of Saudi Arabia to accept U.S. dollars (and only dollars) as payment for oil. In exchange, he pledged to protect the Saudi Monarchy, and all its oil fields, from anyone who might choose to seize them…enemies like the Soviet Union, Libya and Israel, and many other interested parties.
The King agreed.
And by 1975, he had got all the other OPEC members to agree too.
The Petrodollar Was Born
It was so successful it made the dollar go viral…and mounted Capitalism’s biggest monopoly ever…
It was a Megapolitical innovation that won for the Empire, and each and every citizen in it, all kinds of special privileges…
Megapolitics are the big events that change history.
They are usually either a technological or monetary innovation that tip the balance of power into the hands of its creators and alter the equation of the game.
Two of the greatest Megapolitical innovations of all time were gunpowder and Guttenberg’s printing press.
It is difficult to overstate the impact these innovations have had on humanity. In fact, we are still feeling the impact of them today.
But these were technological innovations.
The Petrodollar is a monetary innovation.
But its impact in the last 40 years has been just as powerful.
It was the deal that would rewrite history and shift the balance of power back heavily into America’s favor.
The petrodollar gave us a 40-year secular bull market for dollars…as all oil-importing countries would now have to stuff their Central bank vaults full of dollars so they could pay for their oil.
The Petrodollar Privilege Had Power
In short, it allowed us to live beyond our means…print unlimited amounts of money at virtually no cost…spend more than we earnedconsume more than we produced... import more than we exported
It allowed us to borrow excessive amounts of money at obscenely low rates…and build up enormous trade and budget deficits with few adverse effects…
It allowed us to build a mighty military machine and undertake expensive missions right round the globe…
It gave us, just like gunpowder gave Europeans, almost limitless power to execute violence on a massive scale.
We expanded our Empire…and extended its reign…
Seen in this light, the importance of the Petrodollar comes into perspective.
You can see why we would be prepared to go to war over it.
The preservation of Petrodollar Power is the real reason we went to war with Iraq.
It’s the real reason we have been stirring up strife in Iran and Syria.
It’s the real reason we bombed Libya back to the Stone Age.
And it’s the Real Reason Our Media and
Military Wars are Reaching a Boiling Point…
It’s why - in yet another history-making event - Wikipedia and over 10,000 other web sites went dark last year…
And it’s why the wife of my sometimes friend Bill Clinton tried to create draconian laws that, if passed, would’ve delivered a terrible blow against the freedom of information…and why Hillary announced that “we are in an information war. And we are losing that war.”
In the past, western media outlets enjoyed a monopoly on the coverage of world news.
But today a growing number of viewers from across the world tune into various alternative foreign media outlets to get a fresh take on current events.
It’s a numbers game. And we are clearly losing that game.
For instance, the most striking example of this comes from the launch of the cable news network RT, which within just eight years has become the most dominant and pervasive force in media of all time.
RT stands for Russia Today.
It currently holds a record number of viewers on YouTube, boasting over two thirds of a billion hits…
CNN International in contrast is struggling to reach an audience of just 1% of RT’s size!
And, more viewers in Washington and New York today tune into the English version of RT than tune into almost any other foreign-based international news channel.
The days of American media monopolies are over.
And now the Petrodollar (our biggest monopoly of all) and the last thread that is holding our Empire together, is about to go poof…
Capitalism is About to Find Itself Without a Currency
Until recently thanks to the sheer size and strength of America’s military, it has been able to thwart all attacks made on its currency.
But the illegal war just waged on Libya marked a tipping point.
So enormous was the size of this atrocity that it ignited the region to join together and fight…
Yet so transparent were the real reasons behind it, that it made it that much harder for the American soldiers who fought it, to keep believing in the validity of their “cause”…
This has resulted in our “enemy’s” armies growing stronger by the day – in both size and in spirit - while ours grow weaker…
For generations it appeared that our Empire’s military power and reach knew no bounds.
But in the past few years, crushed under the monumental financial stress of policing the globe, launching failed wars, securing oil and other strategic assets, bailing out “buddies” and zombie banks, it is becoming increasingly clear that we have reached the physical limit on our exercise of power…
We are no longer having as much success at bullying the world into getting what we want, whether it be oil, gas, credit, trading agreements…or any other such strategic assets…
The events unfolding in Syria and Iran right now, and the success that these two nations are having in combatting western intervention is unprecedented.
These nations for the first time in modern history are managing to circumvent sanctions, avoid embargoes, and stand up to our gunboat diplomacy…
And now, the enormous funding we need to finance these wars, is about to become as weak and as feeble as the reasons we are giving for waging them…
The Murmur of Muammar is About
to Become a Megapolitical Roar...
On March 21st, 2012, Iran (the world’s second largest oil producer) took up the Gaddafi fight…
This ancient Persian powerhouse managed to successfully make an historic move…
A move no other OPEC nation on Earth has been able to accomplish yet…
It broke the petrodollar pact.
It became the first OPEC member nation in 40 years to drop the petrodollar…
On an exclusive little-known island in the middle of the Persian gulf, it quietly managed to launch the world’s first commodity exchange that trades oil in currencies other than the U.S. dollar…
In fact, in 2006, a report titled Iran Next U.S. Target sighted Iran’s earlier attempts to launch this exchange as Americas #1 threat, hailing it to be the real “economic weapon of mass destruction.”
The report was voted by alternative media outlet, Project Censored as one of the top 10 censored stories of the year.
By 2008, despite all U.S. efforts to crush it, Iran managed to successfully and silently get a version of this exchange up and running…
This first version of it, however, was merely to establish its validity on global commodity markets…So rather than actively engage in Petrodollar Warfare with America by selling its oil and gas in other non-dollar denominated currencies, it merely offered petroleum-based products instead…
But last year that all changed.
Iran’s Oil Bourse now offers oil on the open market in currencies other than the U.S. dollar.
This is a game-changing move that has begun to spread around the world like wildfire…and which promises to bring an end to the 40-year secular bull market in dollars.
America’s Most Popular Investment is
About to Reach its Use-by-Date
And the consequences for every single American will be so dire, it will be difficult at first to accept, let alone believe.
This is the real reason why we levied sanctions on Iran.
This is the real reason why we sent warships to the Strait of Hormuz, and why we accused Iran of building Weapons of Mass Destruction.
But the International Atomic Energy Association has just completed a full inspection of Iran’s nuclear capabilities, and confirmed that there is no evidence Iran has decided to actually build nuclear weapons.
What’s more, we have 2,150 nuclear warheads. And even by the most ambitious of estimates it would take Iran about 10 years to build two at most.
And if Iran’s two nuclear warheads by 2020 are so dangerous, then why have we allowed North Korea and Pakistan to build literally hundreds of them!
And now Washington’s attempts at bullying the globe to boycott trade with Iran are failing.
Iran has been trading with mega-economies like India, Japan, South Korea for over two decades. These are not relationships that are going to be severed anytime soon by third-party sanctions. They’ve been trading over hundreds of billions of dollars worth of oil and other commodities with Asia alone for a long time…not to mention dozens of other nations.
Iranian oil is an integral part of many nations’ lifeblood.
And while America is running around bullying everyone with sanctions and saber rattling, nations the globe over are quietly and silently doing their own private little deals…deals that are collectively worth over a trillion dollars…
The World Has Begun to Blindside the Dollar
China, Russia, Brazil, Venezuela, Argentina, South Africa, Malaysia, Indonesia, South Korea, Columbia, to name but a few, are all doing direct deals and swaps with one another.
They’re basically blindsiding the dollar.
For example:
  • The Dollar Has Drowned In The Yellow Sea! Hands down, Japan and China landed the biggest punch to the Petrodollar in December 2011 when the two G20 giants announced plans to dump the dollar and trade only in Yuan and Yen. Value: Minimum $339 billion.
  • The BRICS Are Now Glued Together! Brazil, Russia, India and China (South Africa too) agreed to establish mutual lines of dollar-free credit. According to IMF figures – Value: $170 billion.
  • You’ll Hear of Asian Contagion No More! Watch out for the “Chiang-Mai Multi-lateralized Initiative”! It is already in effect. And it links the economies of the 10 ASEAN nations – plus China, Japan, South Korea and the Monetary Authority of Hong Kong in a super-liquid juggernaut kitty of non-dollar credit and local currencies. Value: $120 billion.
  • Recently Tsunami-Tattered Japan Threw India A $15 billion Lifeline. This “little” agreement gives India immediate access to $15 billion worth of yen to help it buy its Iranian oil.
  • And the Silk Road is Now Being Paved With Yuan and Dirhams. On Tuesday, January 17th, 2012, China threw the dollar into one more ditch, when it penned yet another “greenback-less” agreement – this time with the United Arab Emirates. Value: $5.5 billion. And this is just one of more than ten such deals that we’ve seen inked by the Asian Giant in recent years.
The world has begun to enter an unprecedented new era of monetary co-operation. Instead of raising voices and guns – they are raising solutions.
And U.S. sanctions to curb the flow of Iranian oil are now hitting a kink. Though you won’t hear about this from the mainstream media (where the word Petrodollar has been practically banned since 2007).
But the word Petrodollar and the details of new Swap Lines are bandied about every day on alternative media stations like RT, Al Jazeera and China Central Television.
And this is just the beginning…
Commerce is Freeing Itself of Fiat Currencies
We are re-entering a New Era of Barter and Exchange.
Iran has made it clear that it is willing to negotiate “oil-for-anything” deals with any interested party… And with muted mention in the western press, Iran’s long-standing customers have come to the table with a smorgasbord of offers…

  • Turkey, in the past year alone, has shipped over 100 tons of its gold reserve ($8.9 billion worth) – along with diamonds and other precious stones to Iran in exchange for millions of barrels of oil. This represents a 400% increase in trade between the two countries in just the last 12 months. Iran now ranks as Turkey’s biggest trading partner.
  • This past summer China (the largest buyer of Iranian crude) recently bypassed all international restrictions and sanctions when it opened a Yuan account with the Central Bank of Iran. Now, barrels of oil flow out of Tehran and bindles ofYuan flow in. And since there is only one place Iran can spend the Chinese local currency, ships laden with Chinese-made washing machines, refrigerators, electronic goods, toys, clothes, cosmetics and toiletries are entering the Persian Sea as fast as the Asia-bound super-tankers are pulling out.
  • Russia and Pakistan, two of the world’s largest grain exporters have established long-standing wheat-for-petroleum arrangements with the Persian nation.
  • India, the world’s largest democracy, since the start of 2012, has traded over $3.5 billion worth of iron, steel, rice and other cereals, pharmaceuticals, medical equipment, engineering supplies and precious and rare-earth metals with Iran to keep its engine running.
So much for sanctions…
But it’s Not Only Foreigners That are Dumping the Dollar…
Americans, displeased with Washington’s fiscal recklessness, are dumping it too!
A recent report in The New York Times has announced the birth of an entirely new currency in the U.S. – the BerkShare.
Also, Jim Rogers (one of the world’s shrewdest investors) has denounced the dollar too, saying if something isn’t done soon to resurrect it, it will “lead to a huge decline in the standard of living of U.S. citizens like nothing we’ve seen in nearly a century.”
And Bill Gross, the world’s biggest bond investor has advised all his clients that if they had just one investment idea, it should be an investment in a non-dollar, non-euro currency.
As Brazilian economist and strategist Ricardo C. Amaral, recently said:
“The US dollar served its purpose since the end of WWII and became the major foreign exchange reserve currency…(but) the days of the U.S. dollar playing that special role…has reached the end of the line…today that system is very sick.”
These Unprecedented Developments
Have Sparked an Historic Market Reversal…
One which threatens to topple our almighty interwoven, interlocking all-powerful dominion of dollars.
When this “system of systems” collapses, its impact on our way of life, and on everything you own, will be dramatic.
It promises to plummet the value of almost everything you own, whilst catapulting the costs of almost everything you need to buy…from your gas to your groceries…your car to your cable TV…
It will be the reversal of everything you’ve come to know.
It will cause a retirement crisis and drive the Great American Middle Class into extinction.
But what will be even more shocking than the sheer size of the changes that will come, will be the sheer velocity at which they will occur.
Most will be caught completely unawares, like bugs on a windshield…


James Dale Davidson
Strategic Investment
January 2014
PS Our nation (along with its biggest export) is about to begin its final descent. This event will impact almost every aspect of your life: where you live…how you live…where you go on vacation…the car you drive… the way you invest…the food you eat…the products you buy…maybe even the contents of your prayers. It will be the reversal of everything you’ve come to know.

Also See:
Wall Street Ain't Main Street!
13 April 2014
Food Shortage, Then Anarchy! 
 25 July 2012
Disasters Happen! Be Prepared! (Part 1)
31 March 2011
(Part 2)
30 August 2012
The Collapse of the Entire World’s Economic System has Begun!
18 March 2013
Economic Collapse! How Did We Get Here?
(Part 2)
28 September 2013
(Part 4)
21 March 2014
Are We Facing a Global Financial Crisis?
31 May 2011
Financial Crunch! Economic Collapse!
(Part 1)

31 July 2008
(Part 2)
20 November 2008
(Part 3)
25 January 2009
(Part 4)
17 April 2009
(Part 5)
23 June 2009
(Part 6)
23 August 2009
(Part 7)
30 November 2009
(Part 8)
23 February 2010
(Part 9)
28 August 2010
(Part 10)
13 January 2011
(Part 11)
29 April 2011
(Part 12)
28 July 2011
(Part 13)
04 April 2012
(Part 15)
02 November 2012
Recession? ... Depression? ... What is Going On?
(Part 1)
06 October 2008
(Part 2)
02 February 2009
(Part 3)
19 April 2009
(Part 4)
02 August 2009
(Part 5)
17 September 2010
(Part 6)
17 September 2010
Jobs, Jobs, Where are the Jobs?
(Part 1)
20 April 2010