http://www.theguardian.com/commentisfree/2016/jan/17/china-economic-crisis-world-economy-global-capitalism
Below is an analysis of the unfolding situation:
- First of all, the price of oil falls due to UK influence to strike at America's Shale oil production. When King Salman became King he reduced the production of oil therefore the price rose.
- Iran nuclear deal - oil falls (to facilitate deal) then rises after deal.
- Then it falls sharply - America's policy to fix the last financial crises (printing money which devalued the dollar) harmed other nations such that they (France, China, Russia) began to call to replace the Dollar as the world's main monetary currency! Because the value of their dollar reserves was dwindling. Still America arrogantly stayed on its policy of printing money (this helped their Shale oil production then).
This is why China and Russia is buying and stocking up on Gold reserves. China is trying to overtake America's haul of gold and pushing the world away from the dollar. This rang alarm bells in Washington and it represented a great danger to America because its dollar is an important pillar of its Capitalist system and ensures its dominance over the world. Whoever owns the dollar has influence over the prices of petrol and global trade.
- As a result of this events, it has now adopted a policy that leads to the raising of the price (value) of the dollar or reducing the price of oil by increasing oil production*. The countries doing this are America and Canada and the agents of America in OPEC and particularly Saudi, Iran and Iraq who have all increased their oil production. (The lifting of economic sanctions and allowing Iran to export its oil helps in this regard) Also America has lifted its ban on exporting its own oil which had been in place for 40 years. A number of American oil companies has managed to use technology to bear this decrease in prices by reducing the cost of extraction and still remain profitable even at the $20 range.
(* To explain why the dollar value increases when the price of oil falls, firstly the price of oil is measured in dollars and always has been. Flooding the market with oil decreases the actual value of oil which increases the value of the dollar, as the same amount of money buys an increasing amount of oil. America presents this as proof of the strengthening of the American economy. We know that this is due to the Muslim countries flooding the market with oil.
Therefore increasing the quantity of oil decreases the price of oil, which is what America wants right now.*)
But the problem here is that the large oil surplus has been accompanied by a powerful shrinkage in demand (especially from China but also Europe and Japan) and all of that has led to a sharp decrease in the oil prices which has led to the further rising price of the Dollar…
Don't forget the interest rate. There is no real recovery since 2008 and the high dollar is causing problems in its exports hence a gradual increase. An interest rate that is too low is not a indicator of a recovery or confidence and that the economy is still depressed. They need the rate to be higher in order to reap more profits especially for the banks and companies and also to increase its global political influence. So oil price went down when the rate went up, and also the shares went up at the stock markets (which is good for them).
- Also as a result the costs of retaining gold goes up! So Gold prices goes down which harms those countries trying to depend on gold reserves instead of the dollar (as mentioned earlier). America wants to preserve the Dollar as the global currency, to make other countries continuously tie their currencies to it, and as a money reserve for states instead of gold and to make dealing with gold unprofitable and useless to keep it as reserves. It doesn’t want a return to gold and it does not want the world to return to this system because it will harm America.
Its worthless paper (fiat) currency (which is not backed by anything) buys resources around the world and funds its military machine. It strikes the economies of other countries (via IMF, World Bank etc.) through what it calls aid which is nothing of the sort, and makes its economy dominate other states, international financial institutions and financial markets.
- This is a vital issue for America that's why its doing this. It wants to prove that it has rid itself from the consequences and fallout of the financial crisis and that its economy is strong.
This is particular in regards to China and Russia as they are moving towards getting rid of the dominant control of the dollar and making their currency reserves more reliant upon gold.
Therefore, by this America controls the international economic situation and particularly the influential commodities like oil. The prices fall or rise in accordance to its Dollar and the interest rate that its Central Bank sets. As a result, if the American economy slumps then it affects all of the economies in the world as a result.
What is necessary (in this situation) is to cease tying local (national) currencies to the dollar and for the states to abandon using it for their monetary reserves. And from there their dependence should be upon gold and silver and making it the standard currency the world over.
- This is simply currency wars that is being played out now, and states at economic wars with each other. This is an example of Capitalism at its finest.
Allah swt has obliged the buying and selling of products, exchanges, trade etc to be carried out by the gold and silver standard where monies is backed by them. This major step cannot be done without the re-establishment of the Khilafah Rashida state of which it doesn't exist anywhere in the world.
Allah swt says "They say we are making peace. Nay! They are making mischief
but they perceive it not."
And: "They plot and they plan, but Allah too plans
and the best of the planners is Allah."
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