Is something really bad about to happen to the U.S. dollar?

August 14, 2015

WRITER

Sec. John Kerry said that if America stops the Iran nuclear deal, the US dollar could no longer be the world’s reserve currency. What does that really mean? Glenn feels like something really bad is coming for the U.S. dollar and the global economy, and asked economist David Buckner to come onto the radio show and discuss.

GLENN: Just two days ago, we had John Kerry say this about the deal with Iran.

JOHN: That is a recipe very quickly, my friends, businesspeople here, for the American dollar to cease to be the reserve currency of the world, which is already bubbling out there.

GLENN: So what does that even mean? I asked an audience last night what they thought that meant, and nobody really had any idea. I have somewhat of an idea, but I don't even know if I understand it. David Buckner is here. David Buckner is adjunct professor at Columbia University. An economist who goes all over the world trying to work with businesses and trying to hold things together. And he's been a consultant on this program for quite some time. David, welcome to the program.

DAVID: Good to hear from you, Glenn. How are you doing?

GLENN: Where are you in the world today?

DAVID: I'm upstate New York in the backwoods somewhere in the mountains right now. Life is pretty good, pretty sunny.

GLENN: Okay. Sorry to bother you. We just wanted to know exactly what that meant, David. I have this feeling that something really bad has begun especially with the devaluation of the currency in China and with Secretary Kerry saying that. It's almost like a shot across our bow that they know that we're on a course for something, and they're just -- they're going to use it to blame it on something that is convenient for them.

DAVID: Well, it actually started two or three years ago when China signed its first agreement. Do you recall that the reserve currency back prior to, you know, World War II was the sterling. Was the pound sterling. And it was the Bretton Woods Act in '44 and thereon through '55 that we transitioned to the dollar. And all that really meant was that we were going to exchange the dollar for oil. So it's the currency used for the exchange of oil. This is where Secretary Kerry starts pulling in ISIS in the Middle East.

Well, two years ago, China signed an agreement with Russia to no longer use the dollar. And within 17 days, Australia signed the agreement with China as well, that they would only -- it was almost like a unilateral treatment of currencies where they would decide between the yen and the Australian dollar or the yen and the ruble and other currencies. That they would exchange without the dollar being the global entity.

So we've already started down this path. What he identifies there is a little bit frightening because he's indicating that we have to make a decision, aligned with the current policy with ISIS, Iran, and others, or we're going to be -- we're going to lose the dollar. We're already on that path. And quite candidly, we're being held hostage by suggesting we have to capitulate or the dollar is going to be gone.

The dollar is already being comprised. And the question you asked regarding China is evidence of that. The fact that China has so much of our debt and that we're beholden to any movement they make in their currency indicates that any time they do something, like they did yesterday -- they did a 5 percent shift in their currency.

Their currency has been selling about 6.1 or 6.2 yen to the dollar. They moved up to 6.4, 6.5. There's a shift that immediately does two things to us: One, is makes their goods 5 percent cheaper. So that means our goods become expensive compared to them. That means more people are going to buy directly. Which, by the way, puts them in a better position to negotiate more of those deals to get rid of the dollar. That's one thing.

The second thing it does that nobody is talking about, that's more frightening for me personally, from a macroeconomic perspective, and what you and I have been talking about, Glenn, for probably three years now. And that is that what we owe China, all of that debt, we're talking trillions of dollars of debt, the largest percentage to China and a big chunk in Japan. What we owe them now has become 5 percent more expensive overnight.

Now, it doesn't mean the interest rates have changed, but the money that we borrowed -- and borrowed it when it was worth six, we now have to repay that same amount of money that if we were to use it to buy goods would be worth more. But we can't.

So we lose 5 percent on every dollar we're returning to them. That is an overnight shift in interest rates, if you will. Even though the interest hasn't changed, the buying ability of that piece of paper. So we're in a position where overnight, China made our commitment to them 5 percent more expensive. And made all of their goods 5 percent cheaper. So we're fighting -- we're fighting this -- this is crazy, Glenn.

GLENN: So tell me, David, what it means -- explain to somebody -- because what Secretary Kerry was saying, not getting off the dollar as the exchange rate for oil. But he's saying the reserve currency, which means people are not -- they're not generally having a bunch of gold in their bank. What they have is a bunch of US dollars. And if everybody gets rid of the reserve currency and goes off that, all those dollars come flooding back into the system. Am I wrong?

DAVID: No, you're correct on that. And the reason -- and you're correct. Let me blend the two words though, that we're aligned in this.

You're correct when we're talking reserve currency. That is because it is -- it has always been the global currency.

GLENN: Correct.

DAVID: So when we no longer -- the reason I linked in the oil is not because it's changing anything there or anybody has agreed differently. But the reality is, if there's other ways to purchase oil, we no longer need a large reserve, if I'm a foreign country, of US dollars.

GLENN: Correct.

DAVID: Consequently, I can then --

GLENN: Hang on just a second. So people understand that. That's because you were only allowed to buy oil in US dollars. So countries had to have that huge cash of the US dollar because if you wanted to buy something like oil, you had to buy it in dollars. That's quickly going away.

DAVID: Exactly.

GLENN: So how much money is in the -- the central banks of countries? How much -- how many dollars are there?

DAVID: Okay. Now, that's a question without my precise answer for this reason.

What we know we have put out there into a secondary market. You know, when we're shoving dollars out. When the fed shoves money out by buying bonds, that money goes out. And while we can say it's traceable, it's not traced. In other words, what goes out into the U.S. in a bond may make its way by others buying from China, from India, from other places.

So when we're talking about central banks holding them, they'll have what you might call an official number. But the unofficial market is unwieldily. So we know how much is out there. And that we've been flooding. That's been the damaging and frightening part of this, Glenn, is that we keep shoving it out there. And if it gets aggregated into one place, if China starts reserving it and holding it, then they have a huge club. And we keep saying, no, surely, surely they wouldn't have it. We've diffused it. The money is going out broadly. But nobody can track where it's actually being collected and held because the public announcement -- just like China has indicated that they devaluated their own currency, but they control their banking. So when you go to China -- you know I spend a lot of time there.

GLENN: Yes.

DAVID: And when you go to China, you have a variety of different ways in which currencies can be exchanged. When you go to Brazil, there are three totally different currencies: The dollar at the bank, the dollar on the street, and the dollar you pay in a hotel, which is the government rate. And they are vastly differing numbers.

So I'm not wobbling other than to suggest that I can -- I could give you formalized numbers. We could go back and look those up. They're irrelevant. The money that's out there could be aggregated by these central banks, and we do not know which central bank is truthfully aggregating the largest in their formal and informal economy.

GLENN: So here's what I really want to know, and I'm hoping that you're going to say I'm wrong. But this to me, when I heard this, what I heard was the equivalent economically of him saying, by the way, if you disagree, it is total nuclear war. This is an economic -- if the dollars that other countries have are no longer being used as the global currency and the world's reserve. That means that all those dollars are out and we're in hyperinflation and it is -- it's the end of the West or the western commerce as we know it. At least for -- at least until we can settle on what we're doing.

DAVID: Right. There are three things -- we talked about this before. But there are three things that America offers right now. One is that we offer the dollar. Okay? And if that goes away, that's frightening, right?

GLENN: Wait. Wait. Wait. Explain why -- tell people what that means, if the dollar goes away, to them.

DAVID: Well, right now because every exchange is principal for oil, which is the central currency of everything. Energy is everything, okay. Because that exchange must go through us and we control the medium or the piece of paper that you can use to exchange, we control -- I don't want to say control the world. But we control that exchange. And if that's the central exchange, then we still have some significant control on the markets of the world. If that is removed, you no longer have control. If you go into, you know, Germany and you're not using euros and you're using a Brazilian currency that nobody cares whether you have or not, you don't buy anything in Germany. So if our dollar is no longer viewed as the global necessity, we don't have that to offer.

GLENN: So hang on. Before you go on, on that. So, in other words, we become like Iceland. What was it, the kronas, that when it crashed and went away. They couldn't buy meat for McDonald's. Everything had to shut down. We wouldn't be able to buy oil from anybody because no one would accept the US dollar because it would be worthless.

DAVID: It's an irrelevant piece of paper. Most people would say that because there's so much debt being held of US debt, we're betting on our bankers not letting us fail. Now, that scares me, just to be honest. I don't want to bet on my bank not wanting me to fail especially if my house goes up in value and they'd rather take the house rather than to default on what I owe them. Okay? Our house is our natural resource in the U.S. So if we default and we have collateralized our -- the assets of our country, which are our natural resource. Then technically, just like they did in the 1980s when Manhattan, a good percentage of the real estate had to go to foreign entities. We hit such a downside, that you would see Chinese and Japanese signs in front of banks because the real estate was owned by them. We've collateralized what America has against our debt. And our debt is in crazy land. You know that. We've talked about that before.

GLENN: Right.

DAVID: So if the dollar goes away and they go technically after the assets and we then defend the assets, then you are correct that the next thing we offer is war. And that's not where -- and, by the way, I'll give you just one side note that may be contrary to what you think or it may be differing than what you think or it may simply augment it. I actually think the next real battle issue will not be metal against building. I think we can do more with cyber and banking zeros. Ones and zeros in the electric world than we can ever do with weapons.

GLENN: Yes, I agree.

DAVID: I think the next war will be a cyber disaster. And the frightening thing about that is, if you are the one that owes the rest of the world, they have control over your assets. It doesn't take much for them to be able to access all of those buttons. And that's where it gets crazy. So, Glenn --

GLENN: Go ahead. Wrap it up here, David.

DAVID: I was in Hiroshima a week ago. I was there for the 70th anniversary for the disaster there. And they talk about one bomb. And we talk about 15,000 warheads that exist if the world. All it takes is one finger to push buttons to get things crazy. And one one and one zero in the banking world or the economic world to get people desperate. I don't know when we get to that point. But I will tell you, this move by China to shift things by 5 percent in 15 minutes is a daunting look at where we go and what America has to see in the economic future.

GLENN: Thank you a lot, David. I appreciate it. Go back to the mountain and enjoy the sunshine.

DAVID: Good talking to you.

GLENN: God bless you. David Buckner.

5 videos that reveal the WOKE GARBAGE being taught to our kids

School today is not like it used to be...

Glenn recently covered how our medical schools have been taken over by gender-affirming, anti-racist, woke garbage, and unfortunately, it doesn't stop there. Education at all levels has been compromised by progressive ideology. From high-level university academics to grade school, American children are constantly being bombarded by the latest backward propaganda from the left. Luckily, in the age of Zoom classes and smartphones, it's harder for teachers to get away their agenda in secret. Here are five videos that show just how corrupt schools really are:

Woke teacher vandalizes pro-life display

Professor Shellyne Rodriguez, an art professor at Hunter College in New York, was caught on camera having a violent argument with a group of pro-life students who were tabling on campus. Rodriguez was later fired from her position after threatening a reporter from the New York Post, who was looking into this incident, with a machete.

Woke professor argues with student after he called police heroes

An unnamed professor from Cypress College was captured having a heated discussion with a student over Zoom. The professor verbally attacked the student, who had given a presentation on "cancel culture" and his support of law enforcement. The university later confirmed that the professor was put on leave after the incident.

Professor goes on Anti-Trump rant

Professor Olga Perez Stable Cox was filmed by a student going on an anti-Trump rant during her human-sexuality class at Orange Coast College. This rant included Professor Cox describing Trump's election as "an act of terrorism”. The student who filmed this outburst was suspended for an entire semester along with several other punishments, including a three-page apology essay to Professor Cox explaining his actions. Orange Coast College continues to defend Professor Cox, citing the student code of conduct.

Unhinged teacher caught on video going on left-wing political rant

Lehi High School teacher Leah Kinyon was filmed amid a wild, left-wing rant during a chemistry class. Kinyon made several politically charged remarks, which included encouraging students to get vaccinated and calling President Trump a "literal moron." Despite her claims that the school admins "don't give a crap" about her delusional ramblings, a statement from Lehi High School reveals that she "is no longer an employee of Alpine School District."

Far-left Berkeley law professor melts down when a Senator asks her if men can get pregnant

During a Senate Judiciary Committee hearing, Berkeley Law Professor Khiara M. Bridges was asked by Missouri Senator Josh Hawley to clarify earlier statements involving "people with a capacity for pregnancy." The senator's line of questioning is met with a long-winded, frantic rant accusing the senator of being transphobic. When Sen. Hawley tries to clarify further, Professor Bridges makes the outrageous claim that such a line of questioning somehow leads to trans suicides.

Woke ideology trumps medicine in America's top 5 medical schools

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Progressive ideology has infected our most prestigious medical schools and is seeping into our medical system.

As Glenn covered in his latest TV special, "diversity, equity and inclusion" (DEI), and leftist rhetoric have overtaken science and medicine as the focus of medical schools across the nation. The next generation of doctors and nurses is being force-fed DEI and "anti-racist" nonsense at the expense of slipping standards. This has led to a decline in people's trust in the medical industry and for good reason. Woke ideology has already been the driving force behind at least one medical malpractice case, and more are undoubtedly on the way.

All of this is being spearheaded by universities, which have integrated DEI practices into the fabric of their programs. Our top medical schools now require students and staff to participate in mandatory DEI and "anti-racist" classes and training and are adjusting the standards to reflect this new shift in focus. Here are 5 statements from the top American medical schools that show that medicine is no longer their primary focus:

Harvard Medical School

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Taken from the Harvard University "Unconscious bias" resource page:

“As members of HMS, we each have a responsibility to create an inclusive community that values all individuals. Barriers to inclusion may include assumptions we make about others that guide our interactions. Recognizing our Unconscious Bias is a critical step in developing a culture of equity and inclusion within HMS and in our partnerships with other communities.”

The Johns Hopkins University School of Medicine

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Pulled from the JHM Office of Diversity, Inclusion and Health Equity blog:

“One-hour live, virtual unconscious bias training ... [w]ill be required at all Johns Hopkins Health System (JHHS) entities for managers and above; hospital nurse leaders; credentialed providers (such as physician assistants and nurse practitioners); and for school of medicine faculty and trainees (including residents, fellows, medical and graduate students, and research postdocs), as well as those at a manager level or above.”

Stanford University School of Medicine

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Found on the Stanford Medicine Commission on Justice and Equity page:

“The Commission on Justice and Equity—composed of external and internal leaders, experts, and advocates—represents an institution-wide, collaborative effort to dismantle systemic racism and discrimination within our own community and beyond.”

Perelman School of Medicine at the University of Pennsylvania

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Taken from the Penn Medicine Commitment to Inclusion, Equity, and Antiracism site:

“We openly acknowledge the role of structural forces of oppression as primary drivers of the disparate health outcomes. We believe that working to reverse the underrepresentation of historically excluded groups is critical in achieving equitable health outcomes. While this is an ongoing journey for our program, here are some of the tangible steps we have taken to achieve an inclusive culture”

Columbia University Vagelos College of Physicians and Surgeons

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Pulled from the Vagelos College of Physicians and Surgeons Diversity, Equity, Inclusivity, Justice, and Anti-Racism page:

"Courses are being revised to be more inclusive and informed by the key principle of race as a social construct and a social determinant of health. We are training faculty that Anti-Racism is not an add-on to a course. Anti-Racism is a pedagogy - a manner of teaching, designing courses, and measuring learning outcomes. We make sure that the classroom environment is inclusive by holding space for respectful conversation and ensuring that we address any “classroom ruptures”– a disorienting dilemma or situation when a bias or microaggression that may occur, providing real time opportunities for professional development, learning, and growth. Racist actions and remarks are never tolerated at Columbia University and will be dealt with following established protocols."

Critical theory destroys truth and justice

Editor's note: This article was originally published on TheBlaze.com.

Critical theory once stood out as the absurd progressive notion that it is. Now, its maxims are becoming an integral part of ordinary political discourse. The more you repeat a lie, the more you will believe it, and this is the very dangerous place in which we find ourselves today.

Take this critical theory maxim as an example: If we desire justice, we must sometimes champion what may appear superficially as injustice. It's a necessary evil, if you will, the necessity of “controlled injustice.”

By using truth through fabrication and controlled injustice for justice, we’ll save the republic. We’ll be acting in a noble way.

This definition of justice is defined by the “oppressed,” not the “oppressor.” It is the greatest happiness for the greatest number. To achieve this justice, however, we need to endorse acts on occasion that, while seemingly unjust, serve a higher purpose. It will ensure the stability and the unity of our republic, and this may manifest in ways that seem contradictory to our values. But these are the necessary shadows to cast light on “true justice.”

And isn’t that what we are all after, anyway?

Here’s another critical theory maxim: Sometimes we find the truth through fabrication. Our pursuit of truth sometimes requires a strategic use of falsehoods. The truth is a construct that has been shaped and tailored to promote the well-being of the collective.

We sometimes need to accept and propagate lies designed by "the system” — not the old system, but the system that we’re now using to replace the old to get more justice through injustice and more truth through fabrication.

We’re engaging in a higher form of honesty. When we fabricate, it’s for the right reason. We are reaching up to the heavens fighting for a higher sort of honesty. To fortify the truth, we occasionally must weave a tapestry of lies. Each thread, essential for the greater picture, will ultimately define our understanding and ensure our unity under this infallible wisdom.

The election is coming up. Does this maxim sound familiar? Many think it is imperative that we secure our republic through election control to maintain our republic. Sometimes, we might need to take actions that by traditional standards might be questionable.

The act of securing elections requires cheating. It's not mere deception. It is a noble act of safeguarding our way of life. We're on the verge of losing this democracy, and without deception, we will lose it.

To ensure it doesn't fall into the hands of those we know will destroy it, we may have to make a few fabrications. We're fabricating stories to be able to control or secure the republic through our elections. By using truth through fabrication and controlled injustice for justice, we'll save the republic. Therefore, we'll be acting in a noble way. Stealing an election from those who wish to harm our society is truly an act of valor and an essential measure to protect our values and ensure the continuation of our just society.

If we desire justice, we must sometimes champion what may appear superficially as injustice.

I know it's a paradox of honor through dishonor. But in this context, by embracing the dishonor, we achieve the highest form of honor, ensuring the stability and the continuation of our great republic.

Let this be heard, far and wide, as a great call to patriotic action. As we advance, let each of us, citizens of this great and honorable republic, consider these principles. Not as abstract or paradoxical but as practical guides to daily life. Embrace the necessity of controlled injustice, the utility of lies, the duty to secure our electoral process, and the honor and apparent dishonor. These are not merely strategies for survival. They are prerequisites for our prosperity.

We all have to remember that justice is what our leaders define, that truth is what our party tells us. Our republic stands strong on the values of injustice for justice, honor through dishonor, and the fabrication of truths. To deviate from this path is to jeopardize the very fabric of our society. Strength through unity; unity through strength.

We've heard this nonsense for so long. But now, this nonsense is becoming an instituted reality, and we are entering perilous times. Don't be fooled by the narratives you will hear during the march to November. Never let someone convince you that the ends justify the means, that a little bit of injustice is needed to achieve a broader, collective vision of justice, that truth sometimes requires fabricated lies and narratives. If we do, justice will cease to be justice, truth will cease to be truth, and our republic will be lost.

Top 5 MOST EVIL taxes the government extorts from you

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"In this world nothing is certain but death and taxes." -Ben Franklin

The injustice of taxation has been a core issue for Americans since the very beginning of our country, and it's a problem we have yet to resolve. This belief was recently reignited in many Americans earlier this month on tax day when the numbers were crunched and it was discovered that the government was somehow owed even more hard-earned money. As Glenn recently discussed on his show, it's getting to be impossible for most Americans to afford to live comfortably, inflation is rising, and our politicians keep getting richer.

The taxpayer's burden is heavier than ever.

The government is not above some real low blows either. While taxes are a necessary evil, some taxes stretch the definition of "necessary" and emphasize the "evil." Here are the top five most despicable taxes that are designed to line the IRS coffers at your expense:

Income Tax

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"It would be a hard government that should tax its people one-tenth part of their income." -Ben Franklin

On February 24th, 2024 we hit a very unfortunate milestone, the 101st anniversary of the 16th Amendment, which authorized federal income tax. Where does the government get the right to steal directly out of your paycheck?

Death Taxes

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"Now my advice for those who die, Declare the pennies on your eyes" -George Harrison

Not even in death can you escape the cold pursuit of the tax collector. It's not good enough that you have to pay taxes on everything you buy and every penny you make your entire life. Now the feds want a nice slice, based on the entire value of your estate, that can be as much as 40 percent. Then the state government gets to stick their slimy fingers all over whatever remains before your family is left with the crumbs. It's practically grave-robbery.

Payroll

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"The power to tax is the power to destroy." -John Marshall

What's that? The nice chunk of your paycheck the government nabs before you can even get it to the bank wasn't enough? What if the government taxed your employer just for paying you? In essence, you make less than what your agreed pay rate is and it costs your employer more! Absolutely abominable.

Social Security

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"We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much." -Ronald Reagan

Everyone knows the collapse of Social Security is imminent. It has limped along for years, only sustained by a torrent of tax dollars and the desperate actions of politicians. For decades, people have unwillingly forked over money into the system they will never see again.

FICA

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"What at first was plunder assumed the softer name of revenue." -Thomas Paine

FICA is the payroll equivalent of Social Security. Your employer has to match however much you pay. It means it costs your employer even more to pay you—again, you'll NEVER see that money. At this point, are you even working for yourself, or are you just here to generate money for the government to frivolously throw away?