Comments by "US Debt Implosion" (@timcampbell2023) on "Is the PETRODOLLAR being replaced by BRICS?" video.

The petrodollar allows the US to export inflation. OPEC+ is abandoning the arrangements struck in the 70s. This means exporting of inflation won't work in the future. This is will devastate our economy as Washington will have print more and more. You will have to pay more for oil. These is all inflationary. Hyperinflation happens as we get closer to where the government can no longer finance the interest on debt with tax revenues. We are sprinting towards that event horizon. Brics and OPEC+ will eventually settle all their transactions outside the US dollar. Washington will print more and more until we can no longer pay the interest on the debt. Talk about that.
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@EconLessons with the petrodollar, if nations are using the dollar as reserve to buy, oil, commodities, bonds etc, this means cheaper energy costs and less domestic inflation as it gives Washington a greater pool of international dollars to inflate against. As those arrangements unravels the dollars come back to the US and Washington's can't export leading hyperinflation. So, OPEC up until the last few years would not settle outside dollars, this is breaking down rapidly and will lead to our inability to export inflation. If the FED decides to drops rates, real domestic inflation will explode
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The question to really answer is what is it about our current system that would cause our economy to be devastated by nations settling outside the dollar? Seems like this shouldn't be an issue, but it very much is. Everything in America presupposes that the previous arrangement will continue forever
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Lookup Chinese belt and road initiative, if you overlook this one then talking about brics is futility
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@EconLessons that's why I brought up the significance of saudi arabia and Russia signing a mutual protection pact in 2021. That is your sign. Or China building oil refineries in Saudi Arabia and other opec nations. But there is more.
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We are further away from oil losing significance than the dollar losing it. Abandoning oil is something the West came up with to install some new currency system. The world will reject it because cheap energy is the only thing that will keep the masses from perishing.
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@EconLessons take simply China and India. Absolutely huge consumers of energy - their demand PLUS oil transactions not being conducted in dollars as was the previous arrangement with OPEC has incredible implications for the dollar. OPEC is going to more and more willing to service that demand outside of the dollar. That with the way Washington is printing money and accumulate debt... well, I will let you come to your own conclusion. The handwriting is on the wall.
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@EconLessons our budget deficit is 25% higher than last year, roughly 2 trillion. Tax revenues are down 1 trillion. M2 is going down because banks aren't creating credit/money. That is huge problem. Washington is canceling out the FED. Mainstreet is being eviscerated while Washington creates more and more debt money. So overall M2 is shrinking but Washington is creating more debt money than ever.
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@EconLessons OPEC is settling outside the dollar more and more and this is inflationary. It is this that gave us exorbitant spending privilege in the past. The credit card is going to max out and Washington won't realize it because of their blind presumption. Fierce competition is entering into the global market and I think is good, but it will mean turmoil and reduced standard of living in America at best. Point is, the settling outside of the dollar will have an inflationary effect here.
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@EconLessons been studying these dynamics since before GFC. It's coming to a head.
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@EconLessons also, you talk about how poorly Russia and China are doing; how much better off are we? M2 is going down even with government spending at a record pace, that is horrible and Powell himself said it unsustainable. The great depression was the last time m2 went down. Also, authoritarian governments can implement policies needed quickly for interests whereas our two party system hamstrings our nation. Russia and China will not vanish away like you're hoping. And we cannot defeat them with the printing press. The communist, developing and Muslim world will band together and become a menace to the western system.
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@EconLessons and when I say print money I'm talking more about deficit spending. I don't think the FED is monetizing any debt currently because rates, but if rates go down they will. Either is bad, paying excess interest on a huge debt or monetizing a shortfall in the budget, it's all bad. They won't be able to do the zirp thing ever again.
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I will continue to use whatever we use in the u.s., but if you are somewhere outside the u.s., why should you trust the dollar when Washington is stealing through inflation? OPEC+ decides if the petrodollar continues going forward, and Saudi Arabia leads that alliance. Relations between US and Saudi is becoming hostile. We have cheap energy due to reserve status and petrodollar. The dollar is reserve due to petrodollar. You didn't discuss OPEC role in the continuation of petrodollar. OPEC decides if oil and commodities continue to get traded in dollars. Nations used to be forced to hold dollars to buy oil and commodities by opec. That is breaking apart, while Washington is wanting export more inflation... pure economic disaster!
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@EconLessons sure, we produce a lot, but when take the dissolution of international trade arrangements and foolish progressive initiatives, like net zero carbon, then what do you have? Expensive energy.
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@EconLessons the American system and it's dissolution will lead to violent revolution and catastrophic world war, that's how serious this problem is. None of the parties involved are interested in compromise. I'm interested to see things resolve peacefully but I have 0 confidence in US leadership. The people leading us are the worst we could expect for what lies ahead of us. They are liars and so incapable of apprehending the truth that it shocks the mind.
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150 nations a part of BRI
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@EconLessons look at the latest BRI news and how it is developing, it is a system that explicitly excludes the US. Lenin said the goal of socialism is Marxism. The US is going that route, and the more debt we accumulate the worse it will get. This is the great concession, we trade our freedoms so that music can continue to play but the music will stop. America will soon be no different than these other collectivist hell holes that we despise.
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Lookup petrodollar recycling
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@EconLessons not really Mark, it just depends on what you are reading, simply look at the Wikipedia entry. It is a real thing, and it is a feature of the global monetary system. If there is going to be any innovation and progress I suggest it start here because a cataclysmic war could undo a lot of progress we have made, or could make. Technological advancement is useless if world War breaks out. There needs to be a Bretton woods 3 and a new order needs to be hammered out or we will enter into an Era of geopolitical mortal combat.
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@EconLessons that was part of the agreement with opec in the 70s, that surplus petrodollars would be used to buy us debt in exchange for us military protection also that oil would be denominated in dollars only. It's not a conspiracy, neither is it a conspiracy that the arrangement is unraveling - there are repercussions to this; wars will be fought to keep nations in alignment. You know the brutal reality of economics. We are going to get a good dose of it.
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China Completes First Digital Yuan Purchase For Cross-Border Oil Transaction
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Oil sellers will use digital yuan to exchange for gold on sgei
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@EconLessons the acid test would be if OPEC accepts it as a trade currency because the petrodollar is what we're talking about
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@EconLessons with M2 you have to distinguish between bank created money which is shrinking and the government budget deficit which is growing has an inflationary effect. It's really not good at all, it means mainstreet is withering but the government sector is booming. Long term as interest on the debt is greater, Washington has to print more and more to cover non negotiable budget items, they will seek more and more to export these costs but won't be able to, and the bell will toll for the dollar. That is the hyperinflation I'm referring to. They are going to try and print their way out of a hole. But if you fill a hole with more hole, what do you have?
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@EconLessons gold standard does not address credit creation issues for economies that need to grow, that's why they ditched it.
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