Oil - USD - BRICS
Impact of Rising US Debt on Inflation, Oil Prices, and USD's Status as World Reserve Currency
1. Powell's war against inflation will lead to greater inflation:
- Rising interest expense on Uncle Sam's rising debt will need to be paid with inflationary measures.
- The true inflation rate is closer to 11.5% rather than the officially reported 3.7%.
2. Oil-driven inflation is a major concern:
- US oil supply is falling due to rising rates and White House policies.
- Saudi Arabia and OPEC leaders are cutting oil production, leading to falling inventories.
3. Potential impact on inflation rates and markets:
- Tightening oil supply leads to higher oil prices, inflation rates, bond yields, and interest rates.
- Chinese oil demand could worsen the situation, impacting bond, stock, and real estate markets.
4. USD's strength, debt, and inflationary policies:
- Rising bond yields will make the USD stronger but increase Uncle Sam's debt burden.
- The Federal Reserve may have to resort to inflationary measures to save bond markets.
- This could weaken the USD's status as a world reserve currency.
5. BRICS nations recognize the threat of USD-dominated trade system:
- BRICS nations share a common enemy in the USD-driven international trade system.
- They may trust gold as a trade currency and seek to de-dollarize their alliances.
6. Survival of BRICS nations and a changing petrodollar system:
- BRICS nations need to escape rising USD-dominated debts to avoid becoming vassals of the US.
- China will eventually need a better plan than the petrodollar for oil purchases.
- Saudi Arabia's shift towards Shanghai could impact the petrodollar system and the USD's demand.
7. Other strategies the BRICS nations could employ:
- Dumping US Treasury bonds could raise USDs for BRICS nations and harm the US.
- The US's increasing debt puts downward pressure on bonds and upward cost pressure on yields.
- Adding US asset dumping to the mix would have a staggering impact on the US debt-based system.
8. US Trapped in a Vicious Circle of Debt:
- The US is now trapped in a vicious circle of debt, leading to a currency-destroying return to more artificial, QE “stimulus” and inflation.
- Yields, twin deficits, inflation, and debt-driven GDP growth are all on the rise, with limited options for Washington DC.
9. Impending Inflation and Dollar Depreciation:
- Unless spending is dramatically cut, Washington DC will resort to printing more fake money and causing real inflation, leading to a depreciating Dollar.
- Individuals can expect their wallets, checking accounts, and portfolios to be negatively impacted.
https://www.zerohedge.com/geopolitical/bad-really-bad
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