Tuesday, June 4, 2013

2nd Week of September

The public has already forgotten 9/11. There is no use of remembering it. The people don’t care whoever is behind that attack and whatever the motive is. And besides, there is nothing we can do about it. Why be anxious about things you can do nothing about? Just pray, stay positive, keep your routine, and be happy with your family.
The important thing, life returns to normal. Though it is more difficult, it is preferable than what those doomsayers are telling us. Nobody knows about the future and you don’t even know if you are still alive by tomorrow. Be at peace with yourself and with everyone.
After 11 years, the 2nd week of September 2012 reminds us again of 9/11, but almost everyone is no longer interested.
Reaching the 3rd week of September, as I browse the web, I do not remember how exactly I encounter three alarming news that happened during the 2nd week of September.
China Sells Oil Using Yuan
The first alarming news is about the decision of China last September 6 to sell oil using Yuan. Kenneth Schortgen Jr. reported this at examiner.com last September 12. To him, this decision will certainly affect the status of petrodollar, the dollar backed up by oil. The supremacy of the US dollar as world reserve currency received a big blow last Thursday. In fact, the reporter claims that on that day, the US dollar shows indication of weakness on the index.
The day after that decision, Russia made an official pronouncement that it will support China with all its needed oil using Yuan.
The decision of these two powerful countries will surely affect global economy and politics. There is a tendency that other countries will also trade oil bypassing the US dollar. This series of nations’ decisions will negatively impact the US economy. And not only that, Schortgen Jr. even predicts that the power of the US to economically sanction Iran and its influence in the entire Middle East will diminish since Iran would have an alternative to sell its oil to China in Yuan.
Schortgen Jr. affirming the message of Lindsey Williams, the September 6 decision of China is a great landmark in the history of the US dollar. Starting September 6, any nation wishing to trade oil has now an option to use Yuan as a medium of exchange instead of the US dollar. Definitely, this will affect the life of everyone. It is simply surprising that despite of the utmost importance of this decision on world economy and finance, mainstream media was unanimously silent.
As a student of Austrian economics, reading the above news, my feeling is a mixture of anxiety and anticipation. Since the 1970s, Dr. Ron Paul has been predicting that these things will undoubtedly happen. In fact, three days prior to the decision of China, the Congressman untiringly repeated again his message that unless the US dollar returns to its connection to gold, the world will abandon its currency.
Quantitative Easing 3
The second alarming news that happened during the 2nd week of September 2012 was the announcement of the Federal Reserve of pumping a combined $85 billion a month into the money supply. This was reported by Annalyn Censky atCNNMoney last September 13.
There is nothing new in this report except for the figure. As I said in my previous post, I do not doubt the sincerity of Bernanke to stimulate spending and employment, but his economic and monetary blindness due to his Keynesian-monetarist outlook. Lower interest rates and calling for new policies from the US Congress are the typical strategy of the Fed in addition to QE to cure unemployment. But Bernanke’s call falls on deaf ears due to approaching election come November. The Republicans’ criticism of QE as setting “the economy up for rapid inflation in the future” is unbelievable. Their misconception about inflation causes them not to see that QE is inflation itself.
Iran as the New Target
The third alarming news that happened during the 2nd week of September was about the positioning of naval forces of 25 nations at the Strait of Hormuz. Sean Rayment reported this last September 15 at The Telegraph.
The US and Britain lead this naval positioning. The reporter said that the reasons for the positioning include the potential war that might explode between Iran and Israel and war games.
To safeguard her existence, Israel would never tolerate the enhancement of Iran’s nuclear weapons and thinking of a pre-emptive strike. However, it was anticipated that Iran would retaliate that will affect the supply of oil in case Iran would decide to block the shipping lane. Rayment further reports that such blockade would have serious consequences on the economies of Britain, EU, US, and Japan.
Currency War
Comments and Conclusion
The three alarming news that occurred during the 2nd week of September are interconnected if we see them from the vantage point of control for oil and currency war. It is now available to the public through the speech of Congressman Paul that Saddam Hussein was thrown out of power due to his decision to sell oil in euro. Now that the Federal Reserve keeps on pumping new money, both China and Russia refuse to accept American inflation into their economies. And the only way they can protect their economies is by trading oil in other currency except for the US dollar. Even the pressure against Iran can also be traced with its connection to oil and currency war. It was reported that Iran decided to no longer sell its oil in US dollar, but in euro starting 2009. It is as if Iran followed the footstep of Iraq. Is this not the real reason for the increasing hostility against Iran? How about China and Russia? How would US respond to the threat to the dollar supremacy resulting from the combined decision of these two countries to trade oil in Yuan?
Two Other Alarming News  on September 11, 2012
Personal Prayer
Creator of heaven and earth; the God of Abraham, Isaac, and Jacob; you remain faithful in your covenant.  Thank you that you provided the way of peace back to you through your Son, Jesus Christ our Lord.
You are the God who never forgets. You always remember your people. You sustain your creation. You provide our needs. You gave us strength and the ability to work. You cause the sun to rise on the evil and the good, and you send rain on the righteous and the unrighteous.
Help us not forget your goodness. Help us walk by faith and not by sight. Help us live according to the light of your word.
Forgive us for our ingratitude. Forgive us for our going in our own ways. Forgive us for thrusting you behind our backs. Forgive our generation for not believing in your existence.
You remain the sovereign God despite of human rejection. You still rule. You hold governments in your mighty hand. Even though there are human affairs we cannot understand, we still trust in you.
We pray for peace – peace with you, peace within ourselves, peace with those who differ from us, and peace with our environment. We pray this in the name above every name, who himself is our peace, Jesus our Lord, the Prince of Peace. Amen!
Note: First posted on September 17, 2012