Dollar, Ruble, Yuan & Oil

9/06/14 – Perhaps the most significant, the most obvious, and potentially the most dangerous conclusion to draw from all of my 40-Year Cycle analysis is that the Dollar will – during its latest ‘shift’ from 2013-2017 – ultimately be replaced as the reserve currency of the world.  If/when that perception is reached, watch out!

Every month – and sometimes every week – brings new validation to that scenario.  One of the latest events was announced on August 27th and should soon come to fruition as Gazprom – Russia’s equivalent of ExxonMobil – announced it would be accepting payment for its oil in rubles & yuan (Russian and Chinese currency)… and NOT in US Dollars.

From Gazprom’s perspective, the rationale is simple… and obvious.  The US can monitor payments in US Dollars… and see if any transactions are violating new sanctions against Russia.  Rubles & yuan circumvent that restriction.  Europe is poised to accept the first delivery of oil – under this new mandate – inSeptember.

In 1980, President Carter enacted a grain embargo against the Soviets to punish them for military maneuvers (invasion of Afghanistan)…In the ensuing years, it opened up the grain-exporting market to multiple countries in South America – where the USSR turned for their needs.  The U.S. was never the same…

Soviet buying had been a powerful force behind US growth and the food inflation of the 1970’s.  This abrupt psychological shift – brought about by Carter’s embargo – cratered those positive perceptions & paved the way for a farm crisis during the 1980’s.  Wheat headed progressively lower from late-1980 until late-1990.  (Other grains followed suit until the drought of 1988.)

In 2014, President Obama is enacting all kinds of similar sanctions and pressuring allies like Japan to do the same (one 34-Year Cycle & two 17-Year Cycles from Carter’s actions in 1980).

The result is already manifesting itself.  Russia (and Russian firms) – out of necessity – is looking elsewhere for financial transactions (a MUCH larger entity than just grain imports) and being forced to abandon the US Dollar just as the USSR was forced to abandon US grains.

…By the time this period (2013–2017) is complete, the US Dollar will probably play a dramatically different role in world affairs.  And what will the psychology of that abrupt transition trigger… in the U.S…. in the coming years?  [Refer to the 9/06/14 Weekly Re-Lay for complete details.]