Dollar & Oil Weapon; 2013-2016 To Set Stage!
Dollar Destiny; New 40-Year Cycle?
10-30-12 – The remaining weeks of 2012 should set the stage for 2013. As I have discussed & detailed for nearly a decade, 2013 represents the convergence & culmination of very intriguing cycles pertaining to the U.S. Dollar…These cycles – particularly in the U.S. Dollar – pertain to fundamental events (not technicals and/or price charts). It is very important to recognize this when focusing on the Dollar.
So, this cycle culmination does not project a Major high or low in the U.S. Dollar price…The Dollar cycles that converge in 2013 are mostly linked to previous fundamental events (i.e. Federal Reserve Act of 1913, confiscation of Gold in 1933, US/Saudi agreement to price Oil in Dollars in 1973, etc.).
As a result, a related fundamental event(s) is expected in 2013 (-2016).
This is consistent with what has previously been discussed, regarding the relationship between technicals & fundamentals. In most cases, the technicals reveal moves in the price charts long before major fundamental events occur or are well-known. So, a price high or low would be expected to precede – sometimes by months or even years – a major fundamental event.
Barrels & Baskets
So, what kind of fundamental event could take hold in 2013?
… From the current vantage-point – incorporating years of momentum in related events and announcements – the most likely scenario would involve the move to price oil in something other than Dollars. Most likely, the new oil currency would be a basket of global currencies.
There have already been meetings reported, in the past 12-24 months, that pertained to this matter and involved China & Saudi Arabia.
…suppose at the same time the Euro is dropping (as cycles and technicals project, from November 2012forward). What if the Saudis entice Europe by promising to price oil at least partially in Euros (as some nations already do)?
Just as the U.S. has been able to pursue an increasingly reckless fiscal policy since the 1970’s – depending on other nations buying our debt and/or having to buy Dollars to buy Crude Oil to support our politically-indulgent ways – Europe could be bribed with a similar life-line for the Euro.
The Golden Ticket
It has been almost 40 Years – the most consistent, persistent and ominous cycle throughout recorded history – since Saudi Arabia decided to use the ‘Oil Weapon’ against the West (during/following the Yom Kippur War of October 1973). That event ushered in the largest surge in Gold – priced in US Dollars – from 1973 into 1980.
It was, however, the synergy of multiple events – in 1973–1976 – that really set the stage for the present. 1973 was also the collapse of the Bretton Woods agreement while 1976 timed the Jamaica Accord – an agreement to de-link Gold from the Dollar & allow a floating exchange rate.
Not surprisingly, those events arrived exactly 40 Years (did I mention that this is the most consistent, persistent and ominous cycle throughout recorded history) from when the U.S. banned its citizens from holding Gold, when Gold coinage went out of production, and when the link between Gold & the US Dollar sharply weakened – in 1933 (Emergency Banking Act & Executive Order 6102 in 1933 & Gold Reserve Act of 1934… see bottom of page 2).
…The decision to dramatically alter the Gold/Dollar relationship – in 1933 – is what set the stage for a ’precursor’ financial debacle in 1973 and an ultimate financial debacle, beginning in 2013. They are directly related!
Funny enough, the 1933 events came exactly 40 Years (do I have to repeat the significance of this cycle?) from 1893, when the price of Silver collapsed after the removal of government support. Here again, government price manipulation caused a boom-and-bust cycle in the Gold/Silver/Dollar relationship. The entire election of1896 revolved around Gold, with William Jennings Bryan (the loser) arguing to end the Gold Standard.
40 Years prior to 1893 – in 1853 – the US reduced the weight of Silver in coins – another form of manipulation that ushered in another ‘week’ (a 7-year period of time, like the 1973–1980 period) of dramatic financial events.
4 years later – in 1857 – U.S. banks suspended payment in Silver. This period culminated in 1861 with U.S. banks suspending payment in Gold AND Silver, which ended attempts at a Silver standard for the U.S. Dollar.
This was another example of the raging battle between honest money and government (or NGO)- manipulated paper currency. However, it was not the first battle…
Is it any surprise that exactly 40 years prior (and 200 years prior to 2013), in 1813, Thomas Jefferson made the following quote while writing to the Ways & Means Chairman – John Eppes – regarding the establishment of a new national bank. This was part of the opening salvo of a written battle against the charter of the 2nd US Bank and the issuance of paper money:
“Specie (gold/silver coin) is the most perfect medium because it will preserve its own level; because, having intrinsic and universal value, it can never die in our hands, and it is the surest resource of reliance in time of war.”
This was not the only quote he made at that time. In fact, there is a sizeable collection of quotes – directly related to paper currency vs. gold/silver coin – that Jefferson made in 1813. These quotes came during the War of 1812, a war sometimes linked to the re-chartering of the U.S. Bank (after the first charter expired in 1811).
Jefferson was opposed to this national bank and viewed it as unconstitutional. He astutely observed:
“A private central bank issuing the public currency is a greater menace to the liberties of the people than a standing army.”
Nothing is able to more closely link (directly and/or inversely) the relationship between Gold/Silver & the Dollar than a central bank – with the power to print fiat/paper money.
From a cycle perspective – which is the purpose of this discussion – 1813 was a critical year – sandwiched between the two U.S. National Banks (the first ended in 1811 and the second began in 1816), a small window of time when Congress was back in control of the currency but when the quest for another national bank was evolving.
Each of the US Bank charters was for a 20-year term. So, in the first 100+ years of America’s existence, there was an exact 40-Year period of national bank charters & existence. Hmmm. (Of additional interest, the entire period encompassing these two banks was a geometric 45 years – from 1791–1836.)
The second 1/2 of this 40-Year period of testing (with US Bank charters) represents a critical battle in our nation – between an honest, hard currency and the consolidated power of a printed currency. Perhaps the greatest irony is that the man who fiercely battled – and temporarily overcame – the push for a national bank that could issue paper currency is the man immortalized on our $20 bills…
Andrew Jackson won the most lopsided and decisive battle of the War of 1812 – the Battle of New Orleansin 1815. (The War of 1812 was allegedly provoked by England/Bank of England as the 1st US Bank charter expired, just as other wars have been linked to financial interests.) Despite that and other victories, the US Bank was re-chartered in 1816, for another 20 years.
So, Jackson had a second battle to fight when he became president in 1829. He also won that battle, returning the U.S. to a hard currency of gold & silver coinage by the time the charter ran out & his term ended. He left the American people with this profound and prescient warning about the Dollar:
“The paper-money system and its natural associations, monopoly and exclusive privileges have already struck their roots too deep in the soil and it will require all your efforts to check its further growth and to eradicate the evil .”
Full Circle
The relationship between Gold and the U.S. Dollar (or any national currency) ebbs and flows along with a government’s desire to tax its citizens in one form or another. As was seen in 1933–1934, the U.S. government reaped a windfall profit from the confiscation and subsequent re-valuing of Gold. In effect, it was a giant tax.
As the Dollar weakens – due to its lack of solid backing and the corresponding rise in the price of Gold (‘price’ in Dollars) – citizens pay more for all kinds of goods… another form of tax.
So, is it any surprise that the most notorious conflict – between U.S. citizens and government (the British Parliament) – occurred exactly 40 Years before 1813… in 1773.
1773 is when the Tea Act was enacted and 1773 is when the Boston Tea Party occurred (‘no taxation without representation’).
While it is far from the only event, the Boston Tea Party is the most iconic event associated with the American Revolution and the onset of this great societal and economic experiment – known as the United States of America.
If I am not mistaken, 1773 also ushered in a tumultuous ‘week’ of time (encompassing the American Revolution) – the reverberations of which have impacted the world for the past 240 years. In essence, we have come from the original Boston Tea Party to the current Tea Party – a reaction to the policies of the past several decades – during 6, 40-Year Cycles of time.
A Perfect Storm
2013–2016 is the culmination of a 40-Year Period of Testing from 1973–1976 – when the U.S. began experimenting with a new kind of backing for the Dollar (or Federal Reserve Note, whichever you prefer to call it):Oil… and the world restructured how Gold was priced.
However, there is no Fort Knox full of oil actually backing the Dollar. Instead, the entire backing hinges on the promise of a nation that is growing rapidly more antagonistic toward the U.S. And, it is a nation ripe for an‘Arab Spring’ type of revolution. The only thing that has delayed an uprising was/is the spreading of money to the population, a bribe that began in 2011 – when the handwriting appeared on the wall (the wall of Egypt, the wall of Libya, etc.).
If/when there is ever an overthrow of the House of Saud, this willingness to prop up the American economy could disappear in a flash. Do you remember how in Egypt, Mubarak was not even completely overthrown and the masses were yelling for the nullification of the Camp David Accord? A similar thing could happen if/when Saudi Arabia falls.
Of course, there are several other possibilities that could usher in a major, fundamental change in the structure of the U.S. Dollar. Another has to do with what is truly backing the Dollar: DEBT. And, who holds – and continues to purchase – large chunks of this debt, even more than what the Treasury Dept. realizes? China.
…Other possibilities – of which there are some additional, intriguing ones – will be discussed in future publications. One has to do with the inherent conflict of interest that is forbidden in the business world. According to the WSJ (March 2012), the Fed is a massive purchaser of US debt – 61% of it in 2011. Now, let’s look at that logically…
The Fed prints currency that is backed by debt. The Fed buys the debt – with the debt-based currency – in order to prop up the debt-based currency… since other nations are becoming wary of our escalating infatuation with debt.
So, there are now multiple levels of debt backing the currency. Actually, it is becoming an exponential debt-backing of the currency that is accelerating toward a date with destiny…For now, it is important to comprehend the significance of the cycles that come into play in 2013–2016…
“For six years you are to sow your fields and harvest the crops, but during the seventh year let the land lie unplowed and unused. Then the poor among your people may get food from it, and the wild animals may eat what is left. Do the same with your vineyard and your olive grove.”
Exodus 23:10-11 (NIV Translation)
A Giant Week
I have previously described the principle of ‘Work for 6, Rest on 7th’ – the basis of the Jewish Sabbath. This is a principle that applies on many levels, not just the 7 days of the week.
It also applies to the Earth and when it needs rest – during the Shmitta – or Sabbatical Year. As the quote from Exodus… the land of Israel was not allowed to be farmed during each Sabbatical Year (the origin of sustainable and/or organic farming).
For those that want to put the God of the Bible at odds with the care of the Earth, consider that YHWH was so serious about this environmental practice that He had the Israelites exiled to Babylon – for 70 years – to compensate for 490 years when they violated this practice.
Jeremiah & Daniel recognized and wrote about this. Zechariah alludes to it. In essence, it is the ultimate’Earth Cycle’.
And, it has the potential to apply here… but on an even larger degree.
The Cycle of 40 represents a ‘period of testing’ or a ‘period of preparation’. In some cases, this is a period of preparation for a larger endeavor or conquest. In other cases, it is a preparation for a form of consequence or judgment.
Keep in mind that this is NOT just a religious application…
The ancient Egyptians embalmed their dead for 40 days, ‘preparing’ them for burial.
In modern times, a broken bone usually takes about 40 days to heal, preparing it for reuse. So, it appears the human body has a 40-day rhythm – before and after death.
And, of course, the Bible recounts dozens of examples of a 40-day or 40-year cycle. [The collection and dissemination of all these important, historical & natural cycles could be the reason that W.D. Gann instructed his students to read the Bible three times before embarking on their technical and cyclical education.]
So, let’s connect the dots…
2013–2016 is the culmination of 6 periods of 40 Years (period of testing/preparation) from the period of the Boston Tea Party & the American Revolution/Declaration of Independence.
Each of the 40-Year cycles – within that 240-Year period (1813–1816, 1853–1857, 1893–1896, 1933–1934 & 1973–1976) – revealed landmark events for the currency – and the economic freedom – of the United States. Many of these events could ultimately enslave the population.
And, each of these revealed the raging battle between advocates of an honest, hard, gold-based currency versus proponents of a paper, fiat (ultimately debt-based) currency.
2013–2016 is the culmination of this battle – for true and lasting freedom – and ushers in a time for a ‘rest’ or ‘sabbath’ from this battle. Barring an extremely unlikely truce being declared, there are only two ways to accomplish this ‘rest’:
1 – Victory (return to Gold-backed currency).
2 – Defeat (demise of Dollar, as we know it).
2013–2016 represents a watershed time for America, for the U.S. Dollar… and potentially for the world. And, this uncanny series of 40-Year Cycles only represents a small portion of the cycles that conclude this.
There are also the 25-Year & 50-Year Cycles, as well as the 7-Year Cycle, that have been previously detailed. IT