It was Pepe Escobar who gave us four simple words to explain the great monetary earthquake that took place this past month of September 2017: the Oil/Yuan/Gold Triad. Lone prophets in the wilderness like Jim Willie, London Paul, and Rob Kirby have been warning us for years that it was coming. And then it happened. In what will surely induce a fit of hysterical irony among you baby-boomers who remember the historic visit that President Nixon made to China in 1972, only six months after taking America off the gold standard, China has effectively picked up where Nixon left off. President Xi now stands on the threshold of finally reversing the "temporary" loss of the Dollar Gold standard back in 1971.
Yes, on that summer's evening of August 15, 1971, television news broke into America's living rooms on a Sunday and abruptly announced that, to protect the Dollar's stability, the nation would now "temporarily" abandon its gold standard, a move that was in total violation of the Bretton Woods agreement. But, alas, we must defend the dollar against the "international money speculators" who create crises on which they thrive. Well, Nixon was certainly right about that. Sadly, the American public was not informed at that moment of how those "international money speculators" were really just the modern incarnation of that ancient Babylonian priesthood that has been moving the football down the field for a couple of thousand years.
Pepe Escobar didn't mention the "Nixon Shock" within the context of his discussion of the impending Yuan-denominated Shanghai oil benchmark coming in the next few months or even weeks. Neither did the Nikkei Asian Review who appears to be the source of the advent of the new oil contract.
But Jim Rickards was quick to appreciate the historical context of what is really going on here. The video clip below from Keiser Report Episode #1125 is set to begin at the 17-minute mark. Rickards reminds us of that moment in time back in 1974 when Kissinger went to the Saudis and laid out the new Rockefeller plan whereby Saudi would sell its oil only in dollars and thus the U.S. currency switched its backing from gold to oil. Rickards concludes:
"That PetroDollar deal held until last week.... China has now assumed the role that the U.S. abandoned in 1971."
So now the world is poised to pick up where it left off in the summer of '71. Ah, but here's the clincher: the reason why gold standards always fail in the end is because faulty human economic systems that are based on a "closed" flow of earth's abundant resources will eventually fall prey to that handful of millenia-old elitist networks who control the price of gold, thereby controlling its flow, and who created that closed system in the first place.
In fact, Rickards asks the question that must now be on everyone's mind: How can China possibly have enough gold to back its currency when the world begins buying oil at their market? Won't it all just end up the same way it did in America in 1971 with Nixon now laughing from his grave?
Perhaps that's the reason why the idea of a national cryptocurrency is being kicked around in Russia and China? So that the world will eventually but quickly be moved into various digital currencies, a truly "open" monetary system? Imagine the possibilities of human civilization where we use energy that is created "out of the ether" and we use money that is also legitimately created "out of the ether." If we do that, aren't we just one step away from molding a world where you can tap into energy abundantly and freely? When that happens, why bother retaining the notion of debt at all in the human mind?
Looming in the background is the silence emanating from the Bank for International Settlements and the International Monetary Fund over the restoration of a gold standard being tied to the global energy market. With Bretton Woods now essentially being resuscitated, you would think we'd be hearing French champagne corks popping from Christine Lagarde. Surely the BIS, whose role in the manipulation of world events through gold goes all the way back to the day when Hitler planted his foot in Czechoslovakia, has been involved with this Chinese pole shift from the shadows as gold bars from their neighborhood began steadily moving eastward this whole past decade.
Let's hope that that world is coming to realize an inevitable truth: human dynamic economic systems cannot be fettered by either closed energy systems nor closed monetary systems forever. Like that weed on the sidewalk who always manages to force its way through the crack and connect itself to the free, abundant, life-giving resources that exist all around it, mankind, in the end, will wake up to realize that it cannot be shackled by some arbitrary slave system of money and energy. He just needs to acknowledge the existence of that restrictive, ancient Babylonian priesthood, face it, and overthrow it. Crack the concrete. Let the sun shine through.