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Replacing Dollar with Global Currency will damage U.S., claims memo

Confidential Memos Indicate Oil SDR Pricing Shift Would Be “Most Damaging” To United States

Zero Hedge
October 12, 2009

A recently declassified, formerly Confidential, 30 year old memo prepared by Henry Owen for President Jimmy Carter’s eyes only, highlights the perils facing the United States if oil were to be priced in SDRs instead of dollars, a topic which is all the rage today as rumors are swirling that this is an imminent transition to be “put” upon the United States.

In response to your request, we have considered, and discussed with other agencies, whether the US should favor use of SDRs instead of dollars, to pay for crude oil… I have concluded that dollar pricing should be maintained — a view that is shared by State, Treasury and CEA.

The reasons:

1. An announcement that dollars were no longer being used as the unit of account in paying for oil would trigger selling of dollars on the foreign exchange markets. So we would suffer.

2. I don’t see any offsetting gain, since OPEC would probably raise prices in SDR terms, as necessary to recover revenue losses if the SDR appreciated relative to the dollar.

And the conclusion:

We might be able to persuade the OPEC countries to make the shift if the dollar weakened but that’s precisely when the move would be most damaging to us.

Poor Mr. Owen- little did he realize that a mere 3 decades after this memo was penned, the administration would be consumed by a bunch of Wall Street pandering, middle class extortionists, who seek nothing else than to inflate the trillions of toxic “asset” loans that make up the broken backbone of the American financial system. It would come as no surprise if the move is now in fact spearheaded by the same administration which has no other purpose in life than to destroy what little savings Americans have and to throw all their cash to prop up artificially inflated equity prices so that insiders can sell their stock at agreeable levels, and so the toxic companies can use the run up to issue follow on offerings, moderating their untenable debt holdings.

Even more troubling, in another declassified memo, former Undersecretary of the Treasury and President of the New York Fed, Anthony Solomon, reaches this damning conclusion:

The choice of the unit of account for oil pricing is basically under the producing countries’ control. There is no particular economic reason why a shift from the dollar would be contrary to U.S. interest — unless the dollar were to depreciate significant in relation to the currencies in the pricing basket. But there could be major psychological effects. Given the unsettled conditions in the foreign exchange market [TD: so true today, 30 years later], such a step at this time could be interpreted as a lack of confidence in the dollar and as presaging a shift in OPEC investment policy away from the dollar. It could precipitate a serious market reaction.

Alas, even President Carter, seen by many as one of the worst American president in American history was smart enough to not bury his own middle class at the expense of landed Wall Street interests. It is a pity that his current
incarnation, advised by the Bernanke-Summers-Geithner think tank, has such diametrically opposing motivations.

U.S. Dollar Will No Longer Be World Reserve Currency

SDR Value Now On U.S. Custom Forms!

Iceland Parliament May Demand Government Drop IMF

 



Oil is $63 a Barrel, Lindsey Williams Predicted $50

Lindsey Williams Predicted Oil Will Be $50 a Barrel
Insider of the Global Elite was told: “Price of crude oil is going down to $50 a barrel. . . gas will be $2 to $2.50 a gallon” (1st video @ 7:11). “The entire Arab world will be bankrupt” (2nd video @ 7:34) “. . . you are going to shout and dance on the street at $2 a gallon and mark my words within 3-4 weeks time you are going to shutter in your boots because the dollar is going to go to zero, they’ll have an excuse to bring in the North American Union, they will be able to issue a new currency . . .” (3rd video)

http://www.youtube.com/watch?v=9h6Nzr_8lKI
Video 1

http://www.youtube.com/watch?v=Fke1xjLLn-E
Video 2

http://www.youtube.com/watch?v=FeuvaE9Ia7A
Video 3

 

Lindsey Williams on Alex Jones Show, October 26, 2008

http://www.youtube.com/watch?v=Xr1SyiSk3dM

http://www.youtube.com/watch?v=-QBB2QHzon4

http://www.youtube.com/watch?v=eBq5yGpfe4E

 

Oil falls to $63, OPEC plans on cutting supply of oil

AP
October 26, 2008

Oil prices fell to 17-month lows at $63 a barrel Monday in Asia as investors weighed Friday’s OPEC output cut against growing evidence of a severe global economic slowdown that would undermine crude demand.

Light, sweet crude for December delivery fell 32 cents to $63.83 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.

Investors brushed off a 1.5 million barrel-a-day cut announced by the Organization of Petroleum Exporting Countries on Friday, focusing instead on falling crude demand as economies across the globe reel from the impact of a credit crisis.

On Friday, oil fell $3.69 to settle at $64.15. Prices have plunged 57 percent from a record $147.27 on July 11.

“The mood is fairly negative reflecting worry about the international economic outlook,” said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. “If there is further weak economic data in the U.S. or Europe, prices could come under more downward pressure.”

Iran’s OPEC governor Mohammad Ali Khatibi said Sunday a reduction in production “will be considered” at the group’s next meeting in Algiers in December — a meeting that might even be held early if necessary.

“I thought the OPEC cut was a fairly decisive act, but concerns of recession in the major economies remain dominant,” Moore said. “OPEC’s cut does take a step toward tightening the market.”

Read Full Article Here

Largest Drop Ever In Gas Prices
http://www.reuter..dName=domesticNews&rpc=22&sp=true

Oil Can Fall to $50-$60 if Credit Stays Tight
http://www.cnbc.com/id/27160853

Oil down 50pc from July high
http://www.telegraph.co.uk/finance/finance..-July-high.html

 



’Price of crude oil is going down to $50 a barrel’

Lindsey Williams: ’Price of crude oil is going down to $50 a barrel’ ’the dollar is going to zero’

http://www.youtube.com/watch?v=wQDw9M_2dGw
Part 1

http://www.youtube.com/watch?v=9h6Nzr_8lKI
Part 2

http://www.youtube.com/watch?v=Fke1xjLLn-E
Part 3

http://www.youtube.com/watch?v=FeuvaE9Ia7A
Part 4

http://www.youtube.com/watch?v=U9q9hYDmBeQ
Part 5

Lindsey Williams on the Alex Jones Show (1 of 7)
http://www.youtube.com/watch?v=U9q9hYDmBeQ

Ahmadinejad: Oil Prices Are Fixed
http://news.yahoo.com/s/nm/20080617/ts_nm/iran_oil_ahmadinejad_dc

Traders manipulated oil prices – U.S.
http://money.cnn.com/2008/07/24/markets/cftc/index.htm?eref=rss_topstories

’Oil price may hit $500 a barrel’
http://www.presstv.ir/detail.aspx?id=64986&sectionid=3510213

Pickens sees $300 oil unless U.S. cuts imports
http://www.canada.com/vancouversun/news/business/stor..f-a4325ad8691c

 



Russia and Venezuela Team-Up Against U.S.

Russia and Venezuela in deal to counter ‘US aggression’

Adrian Blomfield
London Telegraph
July 23, 2008

With a long shopping list for state-of-the-art defence equipment under his arm, Mr Chavez did his best to ingratiate himself with his hosts.

He first signed off on a deal giving Russia’s state-owned energy companies – often accused of doubling as private piggy banks for powerful Kremlin forces – exclusive rights to develop new deposits Venezuela’s Orinoco Oil Belt.

Then he switched smoothly to flattery, with a call for the Russian ruble to replace the US dollar as the world’s global currency.

“We in OPEC have proposed to put an end to the dollar,” Mr Chavez said, speaking in his role as self-appointed spokesman for the Organisation of Petroleum Exporting Countries.

Mr Chavez was given correspondingly warm welcome as he met with one old friend, prime minister Vladimir Putin, and one new one in the form of president Dmitry Medvedev.

Mr Medvedev was particularly effusive, describing Venezuela as Russia’s “most important partner”.

Ignoring accusations of electoral fraud and authoritarianism that have been directed at both countries, Mr Medvedev told his guest: “We have one common task; to make the surrounding world more democratic, fair and secure.”

Read Full Article Here

 

Russia needs bombers in Cuba due to NATO expansion – ex-commander

RIA Novosti
July 21, 2008

The possible deployment of Russian strategic bombers in Cuba may be an effective response to the placement of NATO bases near Russia’s borders, a former Air Force commander said on Monday.

Russian daily Izvestia earlier on Monday cited a senior Russian military source as saying that Russian strategic bombers could be stationed again in Cuba, only 90 miles from the U.S. coast, in response to the U.S. missile shield in Europe.

“If these plans are being considered, it would be a good response to the attempts to place NATO bases near the Russian borders,” Gen. of the Army Pyotr Deinekin told RIA Novosti.

“I do not see anything wrong with it because nobody listens to our objections when they place airbases and electronic monitoring and surveillance stations near our borders,” the general said.

However, Deinekin said the possibility of Russian bombers being stationed in Cuba is largely hypothetical, because Russia’s Tu-160 Blackjack and Tu-95MS Bear strategic bombers are both capable of reaching the U.S. coast, patrolling the area for about 1.5 hours, and returning to airbases in Russia with mid-air refueling.

Russia resumed strategic bomber patrol flights over the Pacific, Atlantic, and Arctic oceans last August, following an order signed by former president Vladimir Putin. Russian bombers have since carried out over 80 strategic patrol flights and have often been escorted by NATO planes.

Deinekin suggested that Cuba could be used as a refueling stopover for Russian aircraft rather than as a permanent base, because the Russian political and military leadership would be unlikely to take such a drastic step under current global political conditions.

In October 1962, the Cuban Missile Crisis brought U.S. and the U.S.S.R. to the brink of nuclear war when Soviet missiles were stationed in Cuba.

The crisis was resolved after 12 days when the Soviet leader, Nikita Khrushchev, backed down and ordered the missiles removed.

Moscow had a military presence on Cuba for almost four decades after that, maintaining an electronic listening post at Lourdes, about 20 km (12.5 miles) from Havana, to monitor U.S. military moves and communications.

Russia was paying $200 million a year to lease the base, which it closed down in January 2002.

U.S. Warns Russia On Nuke Bombers In Cuba
http://rawstory.com/news/afp/US_gen..ssia_on_nuclear__07222008.html

The Medvedev proposal: Russia’s “New Order” of security relations incorporating the US, Russia and the European Union
http://www.indymedia.org/en/2008/07/910222.shtml

Belarus secretly delivers Russian warplanes to Sudan
http://en.rian.ru/world/20080721/114537636.html

Russian warship arrives in Norway for Northern Eagle 2008 exercise
http://www.globalsecurity.org/wmd/l..08/russia-080717-rianovosti01.htm

Putin Wants Closer Military Ties With Venezuela
http://www.globalsecurity.org/militar..8/07/mil-080722-rianovosti02.htm

Russian missile cruiser begins patrols around Spitsbergen
http://en.rian.ru/russia/20080722/114639422.html

Russia concerned over U.S.-Ukraine Black Sea military exercises
http://en.rian.ru/world/20080718/114389691.html

 



OPEC Leader Says Dollar Will Drive Oil to $170

OPEC Leader Says Dollar Will Drive Oil to $170

Bloomberg
June 28, 2008

OPEC President Chakib Khelil predicted that the price of oil will climb to $170 a barrel before the end of the year, citing the dollar’s decline and political conflicts.

“Oil prices are expected to reach $170 as demand for fuel is growing in the U.S. during the summer period and the dollar continues to weaken against the euro,’’ Khelil said today in a telephone interview. The leader of the Organization of Petroleum Exporting Countries also serves as Algeria’s oil minister.

Political pressure on Iran and the depreciation of the U.S. currency have caused a surge in oil prices, Khelil said. New York- traded crude has more than doubled in a year and touched a record $142.99 a barrel yesterday on the New York Mercantile Exchange.

OPEC ministers generally say that oil output is sufficient, even as Saudi Arabia, the biggest producer, pledged to pump an extra 200,000 barrels a day next month to calm the market. “The market is completely supplied,’’ Venezuelan Oil Minister Rafael Ramirez said yesterday. Libya announced possible production cuts, calling the market oversupplied.

The rising cost of crude is not linked to supply, Khelil said today. “There is more than enough oil in the market to meet the international demand,’’ added the OPEC president, who will take part June 30 in an international energy forum in Madrid.

Prices, which are up 38 percent this quarter, are heading for the biggest quarterly gain since the first three months of 1999, when oil traded between $11 and $17.

Declining Dollar

“The decisions made by the U.S. Federal Reserve and the European Central Bank helped the devaluation of the dollar, which pushed up oil prices,’’ Khelil said.

Oil may extend gains if the ECB boosts rates on July 3, further weakening the U.S. currency. The dollar has declined 15 percent against the euro in 12 months.

ECB President Jean-Claude Trichet reiterated June 25 that policy makers may increase the main refinancing rate by a quarter-percentage point next month to contain inflation. The Federal Reserve left the benchmark U.S. rate at 2 percent on June 25. On Sept. 18 the Fed began cutting rates to bolster an economy already reeling from the credit crisis.

 



Oil Hits $143, Gold $930, Euro $1.57

Oil Near $143

AP
June 27, 2008

Oil futures climbed to a new record near $143 a barrel Friday as the dollar weakened against the euro, confirming expectations that the falling greenback, a major factor in crude’s stratospheric rise, will extend its decline and add to oil’s appeal.

Retail gas prices inched lower overnight, but are likely to resume their own trek into record territory now that oil futures have broken out of the trading range where they had been for nearly 3 weeks.

Light, sweet crude for August delivery rose as high as $142.99 a barrel on the New York Mercantile Exchange before pulling back sharply in a spate of late-day profit-taking to settle up 57 cents at a record $140.21. On Thursday, the contract shot past $140 and rose more than $5 to a new settlement record.

The latest record came as the dollar fell against the euro in afternoon trading, having traded roughly unchanged for much of the day.

“The dollar was slightly stronger, and when it gave up its gains, that gave oil the green light,” said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.

The market now believes the Federal Reserve is unlikely to raise interest rates in the near future; since higher rates tend to strengthen the dollar, traders are anticipating that it will continue to fall and, consequently, that investors will keep turning to commodities including oil as a hedge against inflation.

“Oil’s back in favor, especially with people bailing out of the stock market,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.

The stock market’s recent swoon is also sending investors in search of higher-yielding investments. On Thursday, the Dow Jones industrial average fell nearly 360 points, and in afternoon trading Friday was down more than 100 points.

Read Full Article Here

 

OPEC chief sees oil at $150-170 in coming months

Reuters
June 27, 2008

Crude oil prices could rise to as high as $170 per barrel in the coming months but are unlikely to hit $200 and should ease towards the end of the year, OPEC President Chakib Khelil said in an interview on Thursday.

“I forecast prices probably between $150-170 during this summer. That will perhaps ease towards the end of the year,” he told France 24 television, according to a text of the interview released by the station.

Read Full Article Here

 

Gold Futures Rise as Oil Surges, Dollar Falls

IBT Times
June 27, 2008

Gold futures rose above $930 an ounce on Friday to the highest price in a month as crude oil hit a record high and the U.S. dollar continued to weaken, boosting the investment appeal of the precious metal as a hedge against inflation.

Gold for August delivery rallied $16.20 to end at $931.30 an ounce on the Comex division on the New York Mercantile Exchange. The yellow metal hit an intra-day high of $933 an ounce, the highest for a most-active contract since May 27.

The precious metal posted a weekly gain of $27.60, or 3.1 percent from last Friday’s closing level of $903.70.

Gold is likely to regain $1,000 an ounce by the end of 2008 and work higher through 2009-2010, said John Hill, an analyst at Citigroup, in a research note.

Also on the Nymex, Silver futures for September delivery rose 49 cents, or 2.8 percent, to $17.71 an ounce. The metal climbed 1.8 percent this week and is up 19 percent this year.

Read Ful Article Here

Homelessness Brought To Middle Class
http://www.guardian.co.uk/world/2008/jun/25/usa.subprimecrisis

Stocks Mostly Lower Again
http://biz.yahoo.com/ap/080627/wall_street.html?printer=1

The Shrinking Influence of the US Federal Reserve
http://www.spiegel.de/international/world/0,1518,562291,00.html

Money being pulled out of NYC banks: High demand for wire transfers
http://www.waynemadsenreport.com/articles/20080624

Dow Tumbles 360 Points
http://news.yahoo.com/s/ap/200..p7tkyjYvSV08ZQAF3YkzSNv24cA

U.S. Economic Collapse News Archive

 



OPEC Dumping the Dollar Means Iran War

OPEC dumping the dollar could be the real reason for a war with Iran

http://www.youtube.com/watch?v=EEpp9E6aJGw

Recent News:

California reaching $5.00 Gasoline, kids carpool with strangers
http://uk.reuters.com/article/motorin..NOA62976920080626

Federal Reserve leaves key interest rate at 2%
http://www.latimes.com/news/nationworld..un26,0,7851841.story

Kuwait Buying Up U.S. Infrastructure
http://biz.yahoo.com/ap/080624/kuwait_fund_us_banks.html?.v=1

U.S. Senate To Pass Bank Bailout Bill
http://apnews.myway.com/article/20080625/D91H2TT80.html

Bad economy cancels central Florida city’s 4th of July fireworks display
http://www.local6.com/money/16709180/detail.html

Utilities Cutting Off More Customers
http://www.usatoday.com/money/indu..ff-disconnect_N.htm

Suburbia Life Tougher Because Of Gas Prices
http://www.iht.com/articles/2008/06/24/business/exurbs.php

Oil prices ’will not come down’ says OPEC boss
http://www.telegraph.co.uk/mone..06/24/bcnoil124.xml

LA Seeing More People Living In Cars
http://www.breitbart.com/article.php?id=D91FV1E80&show_article=1

Economy on brink of recession, Greenspan says
http://www.reuters.com/article/businessNew..s&rpc=23&sp=true

OPEC talks: Saudi Arabia to boost oil output
http://www.telegraph.co.uk/news/m..oost-oil-output.html

IMF sees zero US growth in 2008
http://www.gulf-news.com/business/Economy/10222823.html

Few people are conscious of how the United States can use food as a political weapon
Big Shots Jump at Bilderberg’s Oil Orders
Paulson & Co. Says Writedowns May Reach $1.3 Trillion
Japan Offers Helping Hand To World Banks
Bush administration wants to give Federal Reserve more power

U.S. Economic Collapse News Archive