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Monetary shift happens

By Douglas Marolla

Editor’s note: The opinions expressed here are those of the authors. View more opinion on ScoonTV.

The beginning of a massive global power and financial shift happened two weeks ago. China and Saudi Arabia have agreed to buy and sell oil for yuan instead of US dollars. This is a paradigm shift that would have sounded ridiculous as recently as two years ago.

Remember how you were taught in school that the American dollar was “backed by the US Military?” That was only partially true. The real reason why those slips of paper with dead presidents and designs on them had any value whatsoever was because the Saudis and OPEC would only take dollars for oil.

When Nixon took the American dollar off of the gold standard in 1971, Kissinger went to the Saudi Arabians and told them to sell oil only for American dollars. That was the birth of the petrodollar you’ve read so much about. It was a large part of the alliance between the US State Department and the Saudi empire.

That was how things held for the next 50 years. Paper money backed by nothing has never, in human history, lasted more than 35 or 40 years. There has to be some sort of value behind the paper. For American money since 1974, oil has been the backstop.

From the founding of the country there was a gold standard that gave the American dollar its value. The American dollar was “as good as gold” because it actually was. In the olden days, you could take your $20 bill, and if you were unhappy with the way things were going or if you simply felt like it, you could convert it into a one-ounce gold coin. If you wanted silver, you passed the bank teller a single dollar and you got one ounce of silver. Those were the rules, and they were argued over fiercely, but they were not changed until 1973.

The people who founded this country, people you’re told in school were racists and colonizers, were exceedingly bright and careful when it came to the monetary system of the United States. While some Founding Fathers advocated for a central bank, Thomas Jefferson and others argued that messing with money, founding a central bank, or creating an enterprise like the Federal Reserve Bank were anathema to a successful country. Their experiment was working by the way. One of the things they used to teach in school was that Henry Ford paid his workers $5 a day 100 years ago – the highest wages in the world at the time. This was on a gold standard, there was no income tax, and there were no unions. “Our Effort / Enterprise” (Annuit Coeptis on your dollar) was working. None of this is explained in school anymore.

They didn’t mess with the money back in the day. Now that we have lost our way as a nation, other people have decided what to do with our money. And there’s nothing we can do about it.

Foreign leaders have tried this before. Gaddafi talked about trading oil for gold or euros. You saw what happened to him. Saddam Hussein was buddies with the US, right up until he floated the idea of selling oil for something other than the dollar. You know what happened next. Iran talked years ago about selling oil out the back door to the Chinese for any currency. The war rhetoric against Iran began immediately after. Afghanistan has gold, oil, and rare earth elements needed for batteries. The Taliban wouldn’t deal with the US. You know how that went for 20 years. 

Now things are suddenly different.

Schoolchildren are taught that the United States got their way because we are the world’s “only superpower.” That was the case, as the American dollar was the coin of the realm. But now the yuan will begin to be used more often. Russia is already selling oil in rubles. There isn’t anything that NATO or the US government can do about it.

What they haven’t told you in school is that not only will the Russian ruble increase in value, but the yuan will too. Economics and finance are barely taught in school these days. They certainly don’t teach any sort of current events surrounding monetary policy. Ask your children about any of this information. I would bet big money (yuan?) that neither your son nor daughter have any idea what is happening in the world via Saudi Arabia’s recent actions. 

The Great Bifurcation has begun. The BRICS countries have begun to make moves, and they are too big for the United States to do what they used to do; invade and bring them to heel. Those days are over. If you look at the BRICS countries by measurable landmass and population, you’ll see what I mean immediately.

More countries are talking about joining BRICS. Argentina was the latest. Argentina has some of the world’s largest silver mines. Think about that for a minute.

Explain these things to your children. The schools long ago stopped teaching this kind of material. Most teachers have no idea about money or finance. The homeschoolers, particularly the libertarian variety, go over these subjects as the libertarian ethos embraces a gold standard.

Fill in the financial blanks for the young people in your life. You can be sure the schools aren’t.

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Douglas Marolla

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