I wrote a post called “Sad Bastards” a few weeks ago and since then Putin has actually invaded Ukraine, which I will be honest I did not think would happen……….but how did we get here? Well as usual it’s a long road and the events in Ukraine didn’t happen overnight. I was recently doing a speech for the Bremer Forum and the topic was money and I chose to talk about the Petrodollar.
So what is the Petrodollar? Well it was an idea that was conceived by Nixon and Kissinger back in 1973. The US dollar was the world’s reserve currency since 1944 and at that time it was pegged against an ounce of gold at a price of $35. By 1971 America was running out of gold and so it need to find another way of keeping its currency as a reserve currency and so Nixon and Kissinger hatch this scheme which is still in play today.
At this time in the early seventies there was an oil crisis and OPEC increased the price of oil by around 300%, America imported almost 70% of its oil at this time and so it was desperate to secure its future. Kissinger went to Saudi Arabia to secure future oil supplies and in doing so got the Saudi’s to agree to only buy and sell oil in American dollars and in return America will protect Saudi Arabia until the end of time…….the end of time!!
The Petrodollar was born. The American dollar shifted from the gold standard to be aligned with oil.
- The Saudis agreed to price all of their oil sales in U.S. Dollars only.
- The Saudis would invest their surplus oil proceeds in U.S. debt securities.
- The U.S would provide arms and a security guarantee to Saudi Arabia.
Eventually all the major oil producers followed suit and so the American dollar was underpinned because it meant that all other foreign governments had to hold American dollars. In fact there are more $100 notes outside of America than in.
Oil is crucial to the American economy as is war, they go hand in hand. Two events from history will show you what America does when someone threatens to take away their wealth. Lose the Petrodollar status and America will go back to the days of the depression.
In 2003 George Bush sent the troops to Iraq to kill Saddam Hussein under the pretext of him having weapons of mass destruction, the fake news of the day. No weapons were ever found and the story was completely fabricated by the Americans. Why did they invade Iraq? Well Saddam wanted to sell oil in Euros and that would upset the applecart for America.
In 2011 I was in Thailand and I was watching the BBC news when I saw Gaddafi in the back of a pickup bloodied and battered and shortly afterwards he was dead. It seemed that the people had enough and so they took out their friendly dictator, but maybe there is more to this story.
Gaddafi wanted all the African countries to sell oil and link it with gold, if this was to happen then this would impact America greatly and so he was removed.
America will do anything to protect itself and it does not give a fuck about anyone else. I don’t agree with Putin or what is happening in Ukraine, however he is using the same type of propaganda as the Americans used when invading Iraq, it justifies the actions.
America wants to control the world and it has slowly been promoting its democracy around the world at every opportunity and after the fall of the USSR many countries moved to a democratic way of life and in doing so many of them asked to join NATO which has slowly grown in size and is now knocking on Russia’s door, but this is OK because we can trust America can’t we? I mean all those other countries are the problem because they don’t hold the same values. America can reach Russia and China by having bases in other countries and all the while keeping harm at arm’s length.
I guess Putin is losing the plot and I think he knows that his time is nigh and he has decided to go out with a bang to the detriment of Ukraine. In this world where America believes it has the power to do what it wants and to make countries bend the knee and unfortunately Ukraine is a pawn in the global game of chess.
I hope the war in Ukraine ends soon and Putin is held to account for what he has done and I also hope that the Petrodollar comes to an end, which it might just do. There are many countries that are beginning to get a bit pissed off with the current situation along with the power America gains from such an agreement. Let’s hope that in the near future the Petrodollar will cease to exist and maybe America might not be so bullish.
A few facts,
It should come as no surprise that the United States maintains a major military presence in much of the Persian Gulf region, including the following countries: Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates, Egypt, Israel, Jordan, and Yemen. It has basis in 80 countries or territories around the world.
The truth is easy to find when you follow the money…
The Petrodollar System Encourages Cheap Exports to the United States
The Primary Benefits of the Petrodollar System
The petrodollar system has proven tremendously beneficial to the U.S. economy. In addition to creating a marketplace for affordable imported goods from countries that need U.S. dollars, there are more specific benefits. In essence, America receives a double loan out of every global oil transaction.
First, oil consumers are required to purchase oil in U.S. dollars.
Second, the excess profits of the oil-producing nations are then placed into U.S. government debt securities held in Western banks.
The petrodollar system provides at least three immediate benefits to the United States.
It increases global demand for U.S. dollars
It increases global demand for U.S. debt securities
It gives the United States the ability to buy oil with a currency it can print at will
As you know I do not like America, it has exported its paranoia and corrupt methods around the world for years and I think it is only right and fair that it will finally get its comeuppance.