| About | ACP | Buy | Industry Watch | Learning Curve | News | Products | Search | Substack | |
Home » Learning Curve
Something about the PetrodollarBased on a paper by the Morpheus Project.
What do Iraq, Iran, Libya, and Russia have in common? All those countries are the victim of US aggression, either through military attack or economic sanctions. The US justifies the attacks and sanctions with a rhetoric in the Western media along the lines of 'spreading democracy and human rights'. At the same time, the US supports brutal dictatorships in, amongst other places, Saudi Arabia and the United Arab Emirates. The real explanation is that it's precisely Iraq, Iran, Libya, and Russia that have suffered by the petrodollar.
This staggering debt can be sustained through the petrodollar system, which creates an international demand for the US currency. Then too, OPEC countries invest a lot of their dollar surpluses in US federal bonds. Taken as a whole, the US exports huge quantities of newly printed dollars to the oil-producing countries, who in turn reinvest this money in the US national debt, assets, or weaponry. In principle, this means that the US can print new money and increase the federal debt without being hit by inflation. Without this petrodollar system, the US would risk bankruptcy and/or hyperinflation. (Countries hit by hyperinflation and its disastrous consequences include Venezuela, Zimbabwe, and Germany in the 1920s.) Thus the US must be prepared to defend the petrodollar, no matter the cost. In addition, the US exports huge amounts of weaponry to countries in the Middle East within the petrodollar framework. Trump's and Saudi Arabia's weapons deal for $350 billion is a clear example of this in recent history. This huge weapons export is also an incentive for the US to stir up conflicts in the Middle East. There is much evidence that the US has supported both the Islamic State (according to a statement by former Secretary of State John Kerry) and al-Qaeda (according to an interview with German journalist Jürgen Todenhöfer). At the same time, the US has supported Iraqi government forces who have fought Islamic State and al-Qaeda, so it's a question of destabilising the entire region so that the conflicts can continue, rather than, in solidarity, supporting the one side to bring conflicts to an end. Those countries who have threatened to abandon the petrodollar have been hit hard by the US. Not surprisingly it's precisely Iraq, Iran, Libya, and Russia who have abandoned or planned to abandon the petrodollar system. We'll start with Iraq. The petrodollar system was stable until September 2000 when Saddam Hussein proclaimed that Iraq planned to start selling oil in euros instead of dollars. Under false pretences about 'spreading democracy' and 'Iraq has weapons of mass destruction', the US invaded Iraq in 2003 - but the real reason for the invasion was to defend the dollar. As soon as the US conquered Iraq, and the Iraqi oil fields were under US control, Iraq returned immediately to the petrodollar system. Next in line was Libya. In February 2009, Muammar Gaddafi was appointed chairman of the African Union. A month later, work began on a common African currency. The white paper 'Towards A Single African Currency' describes in detail how the African currency is to be tied to the gold standard. But the initiative was seen by the US as a direct threat to the petrodollar system. As a result, the CIA went into Libya the following year in order to support rebel groups that wanted to overthrow Gaddafi, which in turn led to conflicts with Libyan government forces. Using the pretext of 'protecting civilian Libyans', a coalition led by the US established a 'no fly zone' and an embargo of Libyan ports. US and British warships unleashed over one hundred missiles on Libya to support the rebel attack on Tripoli. The Libyan army couldn't withstand the attack and lost control of the country. In October 2011, Gaddafi was captured and then murdered under humiliating circumstances by so-called rebels. Further, the US has for a long time targeted Iran with economic sanctions, because Iran refuses to cooperate within the framework of their nuclear programme. The US, the EU, and other western powers have for several years suspected that Iran can develop nuclear weapons instead of nuclear reactors, and therefore established, in 2012, an embargo of Iran, as well as freezing Iranian bank accounts in the west. To circumvent the sanctions by the west, Iran began instead cooperating with Russia, and in 2014, the countries signed a trade agreement for five years, worth $20 billion per year. It's worth noting that the agreement states that Iranian oil shall not be sold using the dollar as currency - another blow against the petrodollar. The US has even attempted to destabilise Russia, the world's second largest oil-exporting nation. Russia is on the way to leaving the international banking system. The conflict in the Ukraine is a component in this attempt by the US. During 2014, the conflict between Russia and the Ukraine escalated. Western Ukraine wanted to move closer to the EU, whilst the eastern provinces of Donetsk and Lugansk preferred belonging to the Russian sphere. The US, under the leadership of assistant Secretary of State Victoria Nuland, supported the Ukrainian protests in the Maidan square to the tune of $5 billion. The Maidan protests reached their peak in February 2014 when snipers shot at both demonstrators and police. President Yanukovich was given the blame for this and was forced to flee Kiev. In his stead, the EU-friendly Arseniy Yatsenyuk was installed as Ukraine's prime minister - and the US had thus succeeded in destabilising the Ukraine. It was in conjunction with the conflict in the Ukraine that Russia signed the agreement with Iran. In addition, western powers imposed sanctions on Russia when Crimea joined the Russian Federation in 2014. But the US has not succeeded in destabilising Russia. As opposed to Iraq, Iran, and Libya, Russia is a superpower. And Russia's economy is improving rapidly. The country has, in principle, no national debt, as opposed to the US which would be on the brink of bankruptcy if it were not for the petrodollar system. Further, Russia of today has a diversified economy and is essentially self-sufficient in the areas of agriculture, industry, and so forth. And now Russia plans to leave the international banking system in 2017 in favour of a currency based on gold. It remains to be seen if this leads to further sanctions from the US and the west. Should NATO threaten Russia with war, this could lead to disastrous consequences: Russian nuclear power namely has the capacity to destroy the entire US and transform the entire American continent into a wilderness covered in smoldering radioactive ash. Even China is starting to support a new gold-based currency as an alternative to the dollar (which is somewhat ironic, given that China has the world's largest foreign dollar reserves). In addition, a gas consortium is being formed in the Middle East with Syria, Qatar, and Iran whose gas exports to China and Europe will be paid in euros, Russian rubles, Chinese yuan, and, in the future, the new world currency. Saudi Arabia's sanctions of Qatar are because they're growing closer to archenemy Iran through this gas consortium. The US dollar - and the petrodollar system - are under increasing pressure. Another aspect of a potential dollar crisis is that it creates a rift between the finance houses of the Rothschilds and the Rockefellers, which explains the geopolitical struggle going on in Europe today. France is close to the Rothschilds, especially since Macron (who used to work for the Rothschilds) is now the country's president. Even Germany's major banks in Frankfurt are close to the Rothschilds. Now the Rothschilds are getting closer to Russia and China, and see gold as the winner if/when the dollar collapses. This explains Macron's unexpected statement about 'France shall support Russia in the struggle against Islamic State' as well as Merkel's equally surprising quote that 'Europe must be able to survive without the US'. The Rockefellers, represented by Trump, are trying instead to establish a base in eastern Europe. This explains why Trump recently visited Poland in triumphant manner. The petrodollar system has been the dominant economic system between the US and the OPEC countries ever since the 1970s. Should more and more countries, led by Russia and China, consider leaving the petrodollar system, this could lead to extensive consequences for the US, which in turn can lead to widespread effects on the world economy. And, in a worst case, war. See Also
| ||||||||
| About | ACP | Buy | Industry Watch | Learning Curve | News | Products | Search | Substack |
| Copyright © Rixstep. All rights reserved. |