U.S. Seeks War With China To Stiff Investors Of Treasuries (UUP, UDN, GLD, SLV, USO)

Dominique de Kevelioc de Bailleul: In Max Keiser’s Friday edition of On the Edge, veteran mainstream-journalist-gone-straight Greg Hunter of USAWatchdog.com posited an interesting endgame scenario to a failed globalist agenda of financial consolidation and economic repression—that is, start a war with China and just say ‘no’ to those evil Chinese creditors.

Under that scenario, Hunter believes the only viable U.S. option to save the so-called Western ‘elite’ from the guillotines is to start a war with China by fomenting and redirecting pubic anger away from Washington and onto the Chinese in an age-old ploy of jingoism in an effort to provide a ‘valid’ excuse for not paying on U.S. Treasuries.

“You know, you just had China and Japan, the no. 2 and no. 3 economies, getting together, saying we’re just going to change to yuan and yen,” Hunter told Max Keiser.  “We’re not going to use the dollar anymore.  You know, that’s huge.” Get my next ALERT 100% FREE

He added, “There’s a move underfoot not to use the U.S. dollar as the world’s reserve currency.  If things get bad enough.  I mean, there’s $12 trillion held outside the country.  I know this is blasphemy, but, hey, what’s stopping it if there’s a shutdown of the Straits of Hormuz, a $200 a barrel, $300 a barrel spike in oil, a shutting of the U.S. dollar?  What’s stopping the U.S. from just saying, you know, we’re not going to pay those Treasury debts?  China, you’re not going to get paid back.  We’re at war.”

And as a corollary to the scenario, not broached by Hunter in the interview, what would prevent the U.S. government from scapegoating Constitutionalists, Christians and the Patriot movement as un-American terrorists during the process leading up to a full-blown war?  Such a tack was used in Germany during the rise of the Third Reich.

Evidence of a build up toward that end has been reported almost daily by journalist Alex Jones of InfoWars.com, with FEMA camps at the ready, violations of Posse Comitatus gone unchallenged by Congress, and the signing of the NDAA Executive Order of Jan. 1 as the telltale steps already taken by Washington in preparation for civil unrest and possible attempts to overthrow the capitol’s two-party oligarchy, according to Jones.

InfoWars’ Alex Jones and Kurt Nimmo penned on Dec. 6, 2011:

In 2009, the National Emergency Centers Act or HR 645 was introduced in Congress. It mandates the establishment of “national emergency centers” to be located on military installations for the purpose of providing “temporary housing, medical, and humanitarian assistance to individuals and families dislocated due to an emergency or major disaster,” according to the bill.

In addition to emergencies, the legislation is designed to “meet other appropriate needs, as determined by the Secretary of Homeland Security,” an open ended mandate which many fear could mean the forced detention of American citizens in the event of widespread rioting after a national emergency or total economic collapse, as Paul Joseph Watson noted in January of 2009.

Moreover, evidence of the Hunter scanario can be gleaned by relentless U.S. rhetoric fired at Iran, proxy and ally of China in the Middle East.  Iran, a member of George Bush’s ‘Axis of Evil’, has been the target of Cuba-like sanctions by the U.S. since the overthrow of the Shah in 1979, with the latest action to cut the Persian state from the international SWIFT system a sign of retaliation for Iran’s new Kish oil bourse (and Iran’s refusal to accept U.S. dollars as payment for its oil), plunged the rial by 50 percent within days of the announcement.  Oil-dependent China receives 400,000 barrels per day from Iran, according to the Rhodium Group, and has agreed to pay Iran with any currency it prefers.

Reminiscent of U.S. embargo of Japan from American oil in March 1941, today, China has replaced Japan as the target of U.S. aggression through the energy market.  The Chinese have stated publicly it supports Iran and condemns the sanctions as illegal and does not intend to comply with U.S. wishes to boycott Iranian oil shipments. China knows that in order to strengthen the yuan as a future reserve currency, it must do so by incrementally replacing the dollar with the yuan in the $3 trillion global oil market.

“We’re a huge debtor nation, the largest debtor nation in the world, the United States, and other countries are beginning to say but we want our debt in something other than dollars,” John Perkins, author of Confessions of an Economic Hitman, said in a 2008 interview for the movie Zeitgeist Addendum.  “We don’t like the dollar.  We don’t trust it, so Saddam Hussein threatened to go to what he called an oil bourse, the oil exchange where he would sell oil for something other than dollars,yen, the euro, or some other currency.  And that’s one reason we went after him, that’s one more reason.  And today, interestingly enough, Iran is doing the same thing.

“This is a huge threat to us.  I think it’s the primary reason why we’re making threats as if we’re going to attack Iran.  I don’t think it has nearly much to do with nuclear energy . . .”

Perkins went on to say in the 2008 interview that the scenario Hunter proffered in the Kaiser interview on Friday may be the likely scenario the U.S. will adopt to end the pressure on the dollar via the Treasury market, if the U.S. can use its military to force all oil transactions to be denominated in U.S. dollars.  Otherwise, there is no hope for the dollar, as the math precludes the U.S. making good on its debt.

“If Iran, in fact, does sell oil for something other than the dollar, that puts the dollar in a very weak position,” Perkins continued, “and if someone wants to bankrupt us, someone like China or Japan or one of the other big holders of our debt, they can call in our debt in euros or something else.  But they can only do that if they can buy oil in that other currency.”

Related Tickers:  SPDR Gold Trust (NYSEARCA:GLD), iShares Silver Trust (NYSEARCA:SLV), PowerShares DB US Dollar Index Bullish (NYSEARCA:UUP), PowerShares DB US Dollar Index Bearish (NYSEARCA:UDN), U.S. Oil Fund (NYSEARCA:USO).

By Dominique de Kevelioc de Bailleul From Beacon Equity Research

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