Russia Treatens to stop using the Petrodollar

[JohnyMac]

It looks a shot has been fired over the Administrations bow.

From the economic point of view, everyone should get ready for tough actions from Moscow. Sergei Glazyev, the most hardline of Putin’s advisors, sketched the retaliation strategy: Drop the dollar, sell US Treasuries, encourage Russian companies to default on their dollar-denominated debts, and create an alternative currency system (reference currency) with the BRICS and hydrocarbon producers like Venezuela and Iran. Sergey Glazyev

Sergy Glazyev

Some interesting stuff. Also check out Daily Sheeple

Even if you think the Daily Sheeple or the Testosterone Pit is on the fringe, just think of what would happen if Russia and China decided not to use the petrodollar.

If this happened our current $17T deficit would cause a run on the dollar. Gas would double overnight to be more in line with what other countries pay. Inflation would be double digits within months. The stock market would correct negatively within 14 days. We could only guess what that correction would look like. Some think as much as 50% but certainly an amount equal to the percentage the dollar is trading "at" vs. what it was trading at before the move from the petrodollar.

Bottom-line, a major change to the average Americans life. Some of my friends think this is part of the "plan" hence the movement to DHS, heightened ammo sales, a move towards more gun control etc.

History is in the making as I type, which you will tell your grandkids about not unlike my grandmother telling me about the Great Depression.

One of my favorite open mic moments:
 

OBAMA & Medvedev CAUGHT ON MIC 'After My Election I Have More Flexibility' (Nuclear Summit 2012)

Stay tuned...

[APX808]

How would like to include Venezuela into their currency basket when Venezuelan money is devaluating 40% a year?

[JohnyMac]

40% APX...OUCH!

[APX808]

Argentina is around 35% projected for this year 

[JohnyMac]

Here's some more not so good news on our economy....

The Telegraph wrote:
Somebody is a selling a fistful of US Treasuries. It could be Russia, or China, Turkey, South Africa, or Indonesia, or all frantically selling bonds at the same time for different reasons.

We don’t yet know. All we know is that the US Federal Reserve’s custody holdings on behalf of foreign central banks plunged by $106bn in the week ending March 12, the biggest one-week drop on record.

Russia’s central bank is undoubtedly liquidating reserves at a breakneck pace to prevent a collapse of the rouble, as foreign companies scramble to get all their spare cash out of Russian accounts before the G7 guillotine comes down on the Putin clan next week. It is certainly trying to remove its assets beyond the jurisdiction of the US authorities – though that will not be easy. The SEC takes no prisoners. In the end, the world is more frightened of US regulators than it is of Putin's tanks or his polonium. Soft power can trump hard power.

A new war not waged with bullets but economic collapse.

Stay tuned...

[sledge]

Seems to me that the same motives behind a run on a bank could apply to the selling of US bonds by other sovereign funds.  No one would want to be the last guy holding questionable paper that they couldn't cash out for what they paid for it.   

[JohnyMac]

At the sound of being repetitive  make sure you have one months worth of cash on hand. I know it is tough for many of us; however, if you just kept back $100- a month you would have $1,200- saved up and in hand. With interest rates around 1% that means you would only loose $12- by not keeping it in the bank.

Please keep in mind: Once things start to hit the fan, drive directly to your bank and get all of the cash you have but maybe $20- out. If you acted too quickly you can always put it back in your account the following month.