Could U.S. Dollar take Big Hit by Summer?

By Greg Hunter’s  There are plenty of reasons why the U.S. dollar is under downward pressure.  There have been massive bailouts of the global banking system by the Federal Reserve, exploding deficits and a movement globally to move away from doing business in dollars.  Now, there is a new threat, and it is being pushed by U.S. foreign policy with Iran.  Iran’s financial institutions are being shut out of the international banking system known as SWIFT (Society for Worldwide Interbank Financial Telecommunication).  The U.S. State Department is threatening other nations that trade with Iran with the same punishment.  Ten countries, including the powerhouse economies of India and China, are in the crosshairs of SWIFT if they don’t dramatically cut Iranian oil imports by summer. A Reuters report, last week, said, “If a country doesn’t prove it’s making the necessary reductions by the end of June, any institution in that nation that settles petroleum trades through Iran’s central bank will be cut off from the U.S. banking system.”  (Click here for the complete Reuters report.)  No one, but Jim Sinclair of, has picked up on the possible grave implications this action could have on the U.S. dollar.  Sinclair said, last week, “This is terribly ill advised and poorly timed. It smells like a threat of selective lockout via the Swift system.  At a time when the US dollar is sundering as the major international settlement mechanism this is the last thing that dollar managers should consider. Whoever came up with this idea has no appreciation of two points – the weakness of the Western financial system and whatever weapon of war will be used in kind.  The major financial weakness in the US is the level of the US dollar due to sundering use in international contract settlement, the clear and present trend of substituting both the Yuan and Euro as international settlement currencies, and the lack of true economic buyers in the US long bond market.  History will record this decision at this time as a major factor in the final move to financial unwind in the West.”  (Click here for the complete post.)  Sinclair thinks this is extremely dollar negative and gold positive.  This is not some idle comment by a crackpot on the Internet.  Sinclair is a renowned market expert with special expertise in the gold arena, and he has a track record to back it up.  I did some research on a few of Mr. Sinclair’s biggest gold market calls, last June, in a post titled “Print More Money.”   I said, “You should not take Sinclair’s predictions lightly.  In 2002, he predicted gold (priced at around $350 an ounce) would trade at $1,650 an ounce by January 2011.  Today, it is well over $1,500. (Gold hit $1,900 last year and fell back to near $1,700 today.)  In 1974, (the average price that year was $159 an ounce) Sinclair predicted gold would top out at $900 per ounce in 1980–it hit $887.50.  Sinclair says, “If QE is even slowed down, the net result would be a public loss of control on the part of what is seen as the U.S. economic management.” So, he expects gold will rise because the powers that be will print more money.”   Sinclair is predicting gold will hit $12,500 per ounce after 2015.  With what’s going on with SWIFT and Iran, this prediction seems a lot less farfetched.  (For 10 other reasons why the dollar is in trouble, click here for a new story from The Economic Collapse.)   

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  1. xxxxx

    Nothing to profit having more worthless war. It won’t help the dollar
    War won’t help Israel, they have a problem with civil unrest and they are at a cross road. Maybe they will attack Iran but Israel is not sure, if Obama will come riding in on a wild horse.
    Iran is going to be a great country, they have every reason to back off some.
    The bad people in the back ground,who deal in oil, drugs and rob banks,must have the pie cut up by now.
    Maybe war has run out of steam. Peace

    • Greg

      I hope you are correct and war is avoided.

    • WaldenPond

      I also hope that war is no longer an option. Waging war requires a belief that you can hurt others without being hurt. Waging war requires a faith that the winners of a war really win. For example, our war hawks are now getting us ready for war on Iran. What is not mentioned much is that we are planning to bomb nuclear refineries and nuclear reactors. Humans have never done that. Yes, I know, Israel….but those were nuclear reactor constructions sites, without any radioactive fuels present. To bomb reactors in the Persian Gulf, from where comes 40% of the world’s oil, is a form of economic suicide. Yes, we can claim “mission accomplished” and cheer that “we won the war” as cars and trucking in the USA stops running. Economic sanctions also entail two-way pain. If trade is mutually beneficial, then cutting trade is mutually damaging. During the Napoleonic Wars, Britain embargoed the Continent. In retaliation, President Jefferson put trade sanctions on Britain. The economic cost to the USA was so devastating, that the New England states convened the Hartford Convention and began planning for secession from the Union. The current banking sanctions, I guess, will spawn lots of black-marketing banking institutions, which will not only process Iranian oil sales, but also drug money laundering and illegal weapons sales. It is crazy to think that we are immune and exempt from the harm we do to others. “What comes ’round, goes ’round.”

  2. George Too

    Thanks for bring Sinclair’s article to my attention. I stopped reading his site a year or so ago due to very limited time, not the material.
    If anyone out there has read Rand’s Atlas Shrugged, the boys’ in Washington are right on queue destroying the economy by passing laws and directives without understanding the consequences. To save you the 1,000 or so page read, just take the headlines from the Obama administration I take responsibility for Obama being in office.
    I am one of the dumba$$ that voted for him. Never again and it was only the second democrat I ever voted for. I was a republican but I could not pull the lever for McCain. I knew that he was not as wholesome as projected and I chalked it up to some other factors. The problem is when both sides are the same, who do you vote for? If you do a right in for Ron Paul, it is four more years of Obama. America won’t have four years under Obama…to survive that is. If Paul does not do an independent run, I am going with Romney. If Santorum can’t take the heat of a campaign, how could he govern as President???
    Last week someone reminded me of the Keating 5 and a light bulb went off. According to Wiki,
    “The Keating Five were five United States Senators accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan crisis of the late 1980s and early 1990s. The five senators – Alan Cranston (Democrat of California), Dennis DeConcini (Democrat of Arizona), John Glenn (Democrat of Ohio), John McCain (Republican of Arizona), and Donald W. Riegle, Jr. (Democrat of Michigan) – were accused of improperly intervening in 1987 on behalf of Charles H. Keating, Jr., Chairman of the Lincoln Savings and Loan Association, which was the target of a regulatory investigation by the Federal Home Loan Bank Board (FHLBB). The FHLBB subsequently backed off taking action against Lincoln.”
    Then I remembered calling John Glenn’s office and telling his office workers how disappointed, I was; that he was one of my heroes as a child. I thought the voters of Arizona would take care of McCain.
    We have a system where nearly everyone involved running the country is corrupt. Do not take my word for it. Look at their actions. Words are BS and actions golden.
    Thanks for pointing this out. They may think that they can create a short-term demand for dollars but Obama does not want a strong dollar so you have to believe they intend to crash the dollar. These guys are not stupid, just crooked. Hey, think about it. If the exchange rate is 2,000 dollars to the Yuan or 3,000 dollars to the Euro, 15 trillion instantly goes to 7 billion or 5 billion. Of course, Gold would be over 3 million dollars an ounce. That my prediction. In the Weimar Republic, Hitler’s favorite beer cost a billion marks. Inflation was increasing costs so fast you could literally have enough money for mink in the morning and not be able to buy a loaf of bread for the same amount at night. And they had article 48, an emergency clause, that allowed the president and his cabinet to rule without consent from parliament.
    Think about what Obama has done or tried to do [Internet shut off, indefinite detention, national defense preparedness executive order, executed American citizens without trial] and re-read the above. Be afraid, be very, very afraid

    • Greg

      Thank you George for adding content to this post along with your analysis.

  3. slingshot

    The only thing left to say is, “I told you so”.

  4. George Too

    The man who trades freedom for security does not deserve nor will he ever receive either. – Benjamin Franklin

  5. Sean S

    Just another indication Greg that, unfortunately, the country (among others)is being run by a group of “sociopaths” as was contended in a recent Doug Casey article. I don’t always agree with Mr Casey but I think he is possibly on the right track in this article. Of course there is other evidence one can point to around the globe.

    If not read yet, I think it is worth a few minutes to read and ponder.

    At the end of the day the US will not be determining Chinese foreign and economic policy. Given the complexity and scope of US/China trading/financial ties, I would love to see the US try and cut the Chinese out of the US banking and financial system over non-compliance with demands over Iran.

    • Greg

      Sean S,
      This will be very ugly. Thank you for the comment and content.

  6. Jan

    I think the powers-that-be are crazy like a fox. They are trying to destroy the US economy. The President has already stated he does not need Congress to acheive his agenda and will just go around it if he doesn’t get his way. Destroy the dollar, declare Congress unnecessary and become King/Dictator for life?

    Using SWIFT as a weapon will backfire as other countries are already setting up their own money clearing house to tell the West to go pound sand.

  7. mark

    Hi Greg,
    Congratulations on another fine piece of journalistic documentation. Thank you for citing and quoting from Mr. Sinclair’s comments. To the best of my knowledge, he for one is the real deal. He speaks what he believes and lives that which he teaches to others. His concern is genuine and his efforts tireless on behalf of any and all who would heed his sage advice to whatever capacity each is able to do so. All the very best Greg. God bless you and Jim and so many others with you who seek to make known in the clearest of terms the truth of the circumstances in which we find ourselves. Hopefully, by the grace of God through His Son Jesus Christ our Lord and the wisdom which He Himself provides,we will find our way out of this maze of intrigue and deception laid out for us by those who seek their own benefit at the very great expense to the rest of us.

    • Greg

      Thank you Mark.

  8. AndyB

    Unfortunately, there must be war or some catastrophe (whether manufactured or not) to distract from the coming economic implosion. The recent NDAA and the Obama E.O. is laying the groundwork from martial law or worse, total totalitarian/dictatorial control. The elites have proven that nothing is off the table when it comes to maintaining control. The banking cartel counts on chaos to further its agenda. Fortunes are made in the aftermath. Every war in the past 200 years has been orchestrated and planned.

  9. jay

    Sinclair is predicting gold will hit $12,500 per ounce after 2015.
    I can only question what a loaf of bread will cost.

    • Greg

      $50 would be my guess. Thank you for all your comments and participation in this site.

  10. M

    Thank you Greg for your endless contribution to our society.

    I’d like to see you do an article of the current Debt Ceiling (by my calculations we will hit the limit before the Nov 2012 elections) and how that will show cause for concern and maybe a catalyst if Ron Paul were running 3rd Party to really shake up the race in his favor.

    The fact of the matter is the debt is too large and the cuts will most likely never happen. We are going to default either by Inflation or outright missed payments…either way we have issues to say the least…

    Do what you do and we will read it…thanks

    • Greg

      Thank you for your comment, analysis and support.

      • M

        I saw that you mentioned the debt ceiling on your latest youtube video…did I encourage you lol? Great Video.

        • Greg

          All the commenter’s here encourage me and you are included.

          • M

            Yah…its official you are the man…

  11. DeltaAlpha

    Mr. Hunter I sincerely believe that this article you wrote is the biggest and most dangerous story that nobody is hearing much if anything about..

    Ballistics is one of my favorite ways to occupy my spare time, and using ballistics one can see the perilous trajectory that our empire(let’s be honest and call a spade a spade.)and recent events have taken..

    Only the willfully blind cannot see the petrodollar paradigm for what it is. It’s history is well known or easily discovered by anybody who cares to see it.. Not so obvious is just how severely the petrodollar paradigm accounts for not only Americas foreign policy, but the nuts and bolts of everyday life for everybody in the developed world.. Let’s take Japan for example.. Sure, they worked hard and saved like few on this planet ever saved (the Japanese population), but their government… Honestly, who actually calls the shots in the Japanese government? Since the only significant military in Japan is the U.S. military (face it, the JDF is on a good day a joke.), one could easily see that Japan is an occupied and well heeled American colony.

    I have some direct insight into Japan.. My mother met my father on an American base near Tokyo during the Korean war.. She and my grandfather worked for a construction company contracted on the base that they admitted to me was in fact a yakuza front.. The yamguchi-gumi yakuza are now the second most powerful mob on the planet.. Think that’s irrelevant to what’s unfolding over iran? The current head of the yamguchi-gumi has moved his operation into nearly every level of Japanese industry, finance and energy.. I suspect that it was the yamguchi-gumi who warned the chinese of America attempting to settle some debts with bars of gold salted with tungsten. But hey, what do I know, being just a humble sheep rancher in central Texas next to the worlds largest military base..

    Sorry, hard for me to stay focused what with all these C-17’s taking off and landing over at Gray Army Airfield, err.. I mean Killeen Airport.. Plus all these ground shaking explosions over at the impact range on Ft. Hood.. Day and night, rattling the windows and shaking the ground.. I haven’t seen them practicing this hard since the mid 1980’s.. A buddy of mine works the tower over at gra..err, Killeen Airfield.. He feels sorry for those poor C-17 and C-5 crews.. Dead dog tired flying back and forth and between Afghanistan, Germany, Turkey and back here so much… And the GUNSHIPS!!! Ah-64’s and longbow variants buzzing around day and night like flies in a wet Texas summer!! Odd though, the Army seems busier than EVER, yet all the soldiers around town are nervous and talk constantly about the cut-backs and how hard it will be to stay in the Army.. My elderly neighbor next farm over gets his statin drugs from the pharmacy at Darnell Army hospital on Ft. Hood.. He tells me he has to wait forever in the long lines there, what with all the active duty troops being given HUGE amounts of mind-blindingly strong drugs.. Zannax, wellbutrin, depakote and oxycotin and vicodin being handed out like M&M’s.. The kids make him nervous, says they don’t look too terribly stable.

    Anyways, so some in the comments section think that war is not an option.. In reality it isn’t, but our policymakers seem to have an issue with that reality stuff.. When our policymakers hear the word “reality” it probably conjures up images of snookie and jersey shore in their empty heads, just like 90% of the American population..

    So the population of the American empire will have to accept the collapse of the petrodollar paradigm.. I’m sure they will accept “reality” and in an orderly fashion make the necessary and practical adjustments.. Those Ah-64’s are already green colored, I’m sure they’ll make excellent planters.. A geranium fits PERFECTLY into a kevlar helmet filled with rich compost.. We can convert those C-17’s and C-5’s into multi-story apartments on the inside, even lease out the engines as storage space.. I’m also sure that everybody on those potent MAOI’s and other mind-altering pharmaceuticals will be just fine when they come off the stuff… Especially those twitchy folks who have endured 10 years or more of counter-insurgency warfare..

    All fun aside.. Anybody who thinks that what is coming is anything less than the darkest and most terrifying chapters of human history needs to flush out their head gear and reassess their definition of reality..

    Watch their (policymakers) actions, and also listen to their lies.. WHAT they lie to you about and in what manner indicates much of their thinking and what you can expect.. Good luck.

    • Greg

      Thank you for your comment and analysis.

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