The modern world has witnessed three agreements (scammed the other nations) events that could lead that contributed to US prosperity, but could to the end of US dollar dominance, and eventually the crash of the dollar. and loss of prosperity of USA:
1. The end of the petro dollar with KSA after 50 years
Brokered by Henry Kissinger in 1973; In exchange for the protection by US: armament, and US bases, KSA would require payment and pricing in US dollars. Thus countries would have to procure US dollars to buy oil. Thus US has to print plenty of dollars, enjoying an economic activity for which it has no equity. Furthermore, KSA has to invest its dollar hoard on US
treasury thus funding US easy life. This has gone for 50 years.
US exported inflation to KSA by printing more US dollars, It did not affect US then
Why is KSA no longer using USD in oil trade? Maybe there are all ready sour notes in relation
ship with US. Those who planned the 911 attacks were Saudis and there were many other causes
of friction
KSA has priced and accepted other currency for its oil trade: Euros, Chinese Yuan, USSR rubles
The rest of the world has other payment system as initiated by BRICS bypassing SWIFT. It also
took note of the weaponization of the dollar for sanctions as it did with USSR for Ukraine war
KSA also wanted to balance its trade with the rest of the world
With the end of petro dollars:
1. US dollars which was supposed to be inflationary 50 years ago would roost in USA, There might by hyper inflation in USA, And life for ordinary citizen may be hard as it happened to Weimar Republic then (Germany in the 1930s) and Venezuela of late
2. Dearth of buyers for US treasury, thus triggering liquidity crisis for US, and even bankruptcy
2. Cheap funds from Japan after the Plaza accord for the 20T carry trade global
The Plaza Accord of 1985 was a landmark agreement by the G5 nations (US, Japan, West Germany, UK, France) signed at the Plaza Hotel in New York to depreciate the overvalued U.S. dollar, aiming to fix massive U.S. trade deficits and reduce global imbalances by making U.S. exports cheaper. It successfully caused the Japanese yen and German Deutschmark to appreciate significantly against the dollar, but also led to Japan's asset bubble and subsequent "Lost Decades," as the sharp yen appreciation hurt Japanese exporters.
We are aware that this took place when Japan no 2 in the world trade, was causing huge trade deficit
and US and a cheaper dollar would be a solution to solve the widening trade deficit
Lately we know that:
1. Japan was enticed to price yen low vs US dollar
2. Japan to buy US treasury thus contributing to growth of carry trade
Lately Japan has retaliated because of stiff tariff imposed by DT. Thus Japan now is dumping plenty of its 1.3 trillion worth of US treasury. Thus probably ending the 20 Trillion worldwide carry trade and possibly wrecking US and world economy
3. USD as the worlds reserve currency as per Bretton Woods agreement of 1944
The Bretton Woods agreement was an economic victory for US, as it won the military battles
The world war and financial and arena were led by US. The agreement made US dollar as reserve currency,
The world currency is tied pegged at certain amount. And is supposed to be tied to gold.
However when Germany and France took possession of the gold, Pres Nixon cancelled the pegging of the dollar to the gold, and thus another scam was committed.
These 3 acts were authored by US leaders and have shaped the world economy. Thee is an element of scam - being one sided and only benefits USA. But as they say there is karma. Everywhere.
And these what I call world wide scams will haunt USA in the days to come and bring back difficulties for USA
