"Why don't you think the krone will recover again?" [I asked my banker.]"Recover!" [he] said with a laugh..."just test the promise made on this 20 Kronen note and try to get, say, 20 silver Kronen in exchange.""Yes, but mine are government securities: Surely, there can't be anything safer than that?""My dear lady, where is the state that guaranteed these securities to you? It is dead."
"The US shale oil revolution which has been quietly unfolding behind the scenes has now begun to exert a direct influence on foreign exchange markets – to the benefit of the US Dollar," says a report from UBS..."Global reserve currency status allied with less dependence on foreign investors will boost the currency on a five-year view," says a strategist at Société Générale...Because of "the technological advances that enable oil and gas to be extracted from shale," says fund manager David Donora at Threadneedle Investments, "the Dollar will likely enjoy a period of sustained strength."
"This gave the Dollar a special place among world currencies, and in essence 'backed' the Dollar with oil," explained Rep. Ron Paul in a prescient speech on the floor of the US House in 2006."The arrangement gave the Dollar artificial strength, with tremendous financial benefits for the United States. It allowed us to export our monetary inflation by buying oil and other goods at a great discount as Dollar influence flourished."
"The economic law that honest exchange demands only things of real value as currency cannot be repealed. The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil, rather than Dollars or Euros."
"Well, if that were the case, it's really hard to see why the Arabs would continue to price their oil in Dollars, especially at that point; their biggest customers would be China and Brazil and countries that have no reason to deal in Dollars."
"The petroDollar system breaking down, where oil is no longer paid for in Dollars internationally, essentially would be the death knell to the US Dollar as the reserve currency. It means the US can't borrow with 'exorbitant privilege' anymore, and it means the US Treasury market is set for an out-of-control interest rate spiral."
"Tuesday, March 4, to me, was as big as the Cuban missile crisis in the history of the world," says Erik Townsend, with an eerie portent of future events.
"An attempt to announce sanctions would end in a crash for the financial system of the United States, which would cause the end of the domination of the United States in the global financial system."
"That's about the strongest language I've ever heard from a diplomat," says Erik Townsend. "And it sounds to me like Russia is really saying: 'United States, if you want to play this game, come and tell us what we can do in our country, because you're the United States, and you think that ignoring international law is your right because you've got inborn American arrogance or something – if that's what you think, we're going to push a button and we're going to put your country into a bond and currency crisis that ends its economic hegemony over the world, and we have the power to do that.'"I wouldn't be surprised if somebody in China heard him say that and maybe his phone is ringing."Those two countries controlling the reserve currency, being in charge of it themselves, that would just completely change everything overnight. So if you were them, why wouldn't you be consorting to do that? Imagine if they could make it work, a combination of China and Russia asserting a new currency and saying, 'We're not going to use the Chinese Yuan. We're going to create this new currency. It's called the Asiabuck or something, and it's backed by something real, preferably gold.'"
"I doubt that a US bond and currency crisis is going to happen on Obama's watch," says Erik Townsend. "He's only got a couple more years; we're getting close. But to go eight more years – assuming the next president gets two terms – to go from 2016 all the way to 2024 without the US bond market blowing up for one reason or another, I can't see it."That means our next president is going to be the one to preside over the most technically complex, sophisticated financial disaster in history. 2008 will look like a backyard weenie roast compared with what I see coming."
"What you do if you're the US is you say, 'Look, we can't have that other new world. It's just too radical. It would mean the end of life as we know it. Therefore, all other countries that are not aligned with China and Russia, you gotta be on our side.' And what we'll do is we'll set it up so that basically the very well-connected political elites always are taken care of, but everybody else is going to get screwed."