The Petrodollar Is Under Attack: Here's What You Need To Know

Tyler Durden's picture

Authored by Darius Shatahmasebi via TheAntiMedia.org,

Once upon a time, the U.S. dollar was backed by the gold standard in a framework that established what was known as the Bretton-Woods agreement, made in 1944. The dollar was fixed to gold at a price of $35 an ounce, though the dollar could earn interest, marking one notable difference from gold.

The system ended up being short-lived, as President Richard Nixon announced that the U.S. would be abandoning the gold standard in 1971. Instead, the U.S. had other plans for the future of global markets.

As the Huffington Post has explained, the Nixon Administration reached a deal with Saudi Arabia:

“The essence of the deal was that the U.S. would agree to military sales and defense of Saudi Arabia in return for all oil trade being denominated in U.S. dollars.”

This system became known as the Petrodollar Recycling system because countries like Saudi Arabia would have to invest excess profits back into the U.S. It didn’t take long for every single member of OPEC to start trading oil in U.S. dollars.

A little-known economic theory, rejected by the mainstream, stipulates that Washington’s stranglehold over financial markets can be at least partially explained by the fact that all oil exports are conducted in transactions involving the U.S. dollar. This relationship between oil and currency arguably gives the dollar its value, as this paradigm requires all exporting and importing countries to maintain a certain stock of U.S. dollars, adding to the dollar’s value. As Foreign Policy – a magazine that rejects the theory – explains:

“It does matter slightly that the trade typically takes place in dollars. This means that those wishing to buy oil must acquire dollars to buy the oil, which increases the demand for dollars in world financial markets.”

The term “those wishing to buy oil” encompasses almost every single country that does not have an oil supply of its own – hardly a trivial number. An endless demand for dollars means an endless supply, and the United States can print as much paper as it wants to account for its imperial ambitions. No other country in the world can do this.

In 2000, Iraq announced it would no longer use U.S. dollars to sell oil on the global market. It adopted the euro, instead, which was no easy decision to make. However, by February 2003, the Guardian reported that Iraq had netted a “handsome profit” after making this policy change.

Anyone who rejects this petrodollar theory should be able to answer the following question: if currency is not an important factor in America’s imperialist adventures, why was the U.S. so intent on invading a country (based on cold, hard lies), only to make it a priority to switch the sale of oil back to dollars? If they cared so much about Iraq and its people, as we were supposed to have believed, why not allow Iraq to continue netting a “handsome profit”?

In Libya, Muammar Gaddafi was punished for a similar proposal that would have created a unified African currency backed by gold, which would have been used to buy and sell African oil. Hillary Clinton’s leaked emails confirmed this was the main reason Gaddafi was overthrown, though commentators continue to ignore and reject the theory. Despite these denials, Clinton’s leaked emails made it clear that Gaddafi’s plan for the future of African oil exports was a priority for the U.S. and its NATO cohorts, more so than Gaddafi’s alleged human rights abuses. This is the same Hillary Clinton who openly laughed when Gaddafi was sodomized and murdered, displaying no regrets that she single-handedly plunged a very rich and prosperous nation into a complete state of chaos.

At the start of this month, Venezuela announced it would soon “free” itself from the dollar. Barely a week or so later, the Wall Street Journal reported that Venezuela had stopped accepting dollars for oil payments in response to U.S. sanctions. Venezuela sits on the world’s largest oil reserves. Donald Trump’s threats of unilateral military intervention — combined with the CIA’s admission that it will interfere in the oil-rich country — may make a lot more sense in this context.

Iran has also been using alternative currencies  — like the Chinese yuan — for some time now. It also shares a lucrative gas field with Qatar, which could be days away from ditching the dollar, as well. Qatar has reportedly already been conducting billions of dollars’ worth of transactions in the yuan. Just recently, Qatar and Iran restored full diplomatic relations in a complete snub to the U.S. and its allies. It is no surprise, then, that both countries have been vilified on the international stage, particularly under the Trump administration.

In the latest dig to the U.S. dollar and global financial hegemony, the Times of Israel reported that a Chinese state-owned investment firm has provided a $10 billion credit line to Iranian banks, which will specifically use yuan and euros to bypass U.S.-led sanctions.

Consider that in August 2015, then-Secretary of State John Kerry warned that if the U.S. walked away from the nuclear deal with Iran and forced its allies to comply with U.S.-led sanctions, it would be a “recipe, very quickly…for the American dollar to cease to be the reserve currency of the world.”

Iran, bound to Syria by a mutual-defense pact, was reportedly working to establish a natural gas pipeline that would run through Iraq and Syria with the aim of exporting gas to European markets, cutting off Washington and its allies completely. This was, of course, in 2009 — before the Syrian war began. Such a pipeline deal, now with Russia’s continued air support and military presence, could entail the emergence of a whole new market that could easily be linked to the euro, or any other currency for that matter, instead of the dollar.

According to Russian state-owned outlet RT, the Kremlin’s website announced Tuesday that Russian President Vladimir Putin has also instructed the government to approve legislation to ditch the U.S. dollar at all Russian seaports by next year.

Further, the Asia Times explains that Putin dropped an enormous “bombshell” at the recent BRICS summit in Xiamen early September, stating:

“Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.” [emphasis added]

According to the Asia Times author, the statement was code-speak for how BRICS countries will look to bypass the U.S. dollar as well as the petrodollar.

China is also on board with this proposal. Soon, China will launch a crude oil futures contract priced in Chinese yuan that will be completely convertible into gold. As reported by the Nikkei Asian Review, analysts have called this move a “game-changer” for the oil industry.

Both Russia and China have been buying up huge quantities of gold for some time now. Russia’s present gold reserves would back 27 percent of the narrow ruble money supply – far in excess of any other major country. The United States’ Federal Reserve admitted years ago that they haven’t held any gold for a very long time.

China is also implementing a monumental project, known as the Silk Road project, which is a major push to create a permanent trade route connecting China, Africa, and Europe. One must wonder much control over these transactions will the U.S. have.

These are just a few of the latest developments that have affected the dollar.

Can those continue to reject this petrodollar-related theory answer the following questions with confidence: Is it a coincidence that all of the countries listed above as moving away from the dollar are long-time adversaries of the United States, including the ones that were invaded? Is it a coincidence that Saudi Arabia gets a free pass to commit a host of criminal actions as it complies with the global financial order? Are Saudi Arabia’s concerns with Qatar really rooted in the latter’s alleged funding of terror groups even though Saudi Arabia leads the world in funding the world’s most vile terror groups?

Clearly, there is something far more sinister at play here, and whether or not it is tied solely to a deranged, psychopathic currency warfare will remain to be seen. The evidence continues to show, however, that the U.S. dollar is slowly being eroded piece by piece and ounce by ounce — and that as these adversarial countries make these developments in unison, there appears to be little the U.S. can do without risking an all-out world war.

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Truthseeker20's picture

We wouldnt have needed to worry abt the dollar if it was backed by gold which the constitution said it was supposed to be. Back to gold standard.

Clock Crasher's picture

Here is what you need to know

Fiat Ponzi Insurgents have captured the government at all levels

NWO Trinity Plague Storm are adding poison to the food, air and water

Sick Care Empire

Global Everything Bubble

US Bank 242 Trillion Dollar-Jihadi Suicide Vested

100+ Trillion dollars of unfunded liabilities

94 Million working age Americans unemployed

120 Million tax payers supporting 164 Million receiving benefits

40 Million on food stamps

Wealth Gap Chasm

Exponential Debt Parabola Dooms Day Machine

Negative Real Rates for them 24% CC rates for us

Captured Regulatory & Justice Departments

Zero Hedged Institutions

US Banks leveraged between 10:1 and 20:1

War on Cash

Divided Nation

Off Shoring of Jobs

Off Shoring of Dollars

Mass Denial

Chupacabra-322's picture

@ Clock,

Hedgemony is difficult & expensive to keep Centrialized for long periods of time.

Rome comes to mind.

"I know not why any one but a school-boy in his declamation should whine over the Commonwealth of Rome, which grew great only by the misery of the rest of mankind. The Romans, like others, as soon as they grew rich, grew corrupt; and in their corruption sold the lives and freedoms of themselves, and of one another. [...] A people, who while they were poor robbed mankind; and as soon as they became rich, robbed one another."

Samuel Johnson: Review of Thomas Blackwell's "Memoirs of the Court of Augustus"

JRobby's picture

Assume all out war

These forces will not be easily taken care of like they did with "The Colonel" ("we came, we saw, he died")

https://www.youtube.com/watch?v=Fgcd1ghag5Y

Chuckles galore when you hang with the psychotic bitch!

Ruining the way of life for millions.

https://www.youtube.com/watch?v=NLflLdIJeMw

 

 

 

Manthong's picture

 

The Federal Reserve fiat pseudo-dollar is toast.

Soon it will not be the reserve/preferred currency of the world.

The banks and the deep state have only themselves to blame for giving up what Valéry Giscard d'Estaing described as “America's exorbitant privilege”.

A small number of people got filthy rich in this process.

The vast majority in this country will be suffering greatly because of their larceny.

Hedge your excess Fed dollars if you have any, or dump them for something that will be more durable.

BennyBoy's picture

 

Fuck the petro dollar standard.

Fuck the gold standard. Its so fucking easy to manipulate. Read some history.

We need a better financial system than our debt based one where for a dollar to be created a dollar must be borrowed (Federal Reserve NOTE). The bankers get their interest on every buck created no matter what. And thats the beginning of bank frauds.

Here's one better, doable way, there are others (use google):

One Dollar Of Capital - A Definition And Challenge*

ergatz's picture

Petro or not, the US$ is already destroyed. http://wp.me/p4OZ4v-2GY

Got The Wrong No's picture

Another 6 week Interchangeable Biblical Institute profile. 

Diatom's picture

forget all out war...

90 NPP'S just in the US...

ICBM's now integrate S400 tech and decoys...

So much for a 10 times Russia military budget...

Do you now the difference between a 500 dollar hammer and a 5 dollar hammer?

It's in the fucking price tag...

StychoKiller's picture

The $500 hammer has a two-foot high stack of paper demanded by Congress/Military, proving that it's really a $5 hammer.

Manthong's picture

This kind of situation usually leads to a very nasty war.

We will have one that affects everybody on our soil if we do not get rid of the neocons and leftists here.

 

 

skbull44's picture

No reserve currency lasts forever...nor does any empire.

 

https://olduvai.ca

King of Ruperts Land's picture

So obvious. Traitor media pulling their hair out to try to distract from this.

Clock Crasher's picture

@ Chupacabra

Rome and all empires are Not, too big to fail.  They grow So big they have to fail. 

Miss Informed's picture

What have the Romans ever done for us?

Clock Crasher's picture

Brought us empire-end-game regulations.  Bread & Circus, currency debasement and orgies.

unsafe-space-time's picture

Sodomy, pagan pope worship and the mafia.

The Alarmist's picture

Built the sewers, gave us running water ...

soyungato's picture

The technology to make cement and glass.

Diatom's picture

History can be divided in 3 categories:

Natural

Political

Industrial

The most important is industrial.

Thats the one that's causing 60% fall in sperm counts and a 1 in 2 cancer rate...

Rome: Cement,glass and lead pipes...

2017: Poison everywhere...

The Alarmist's picture

USD is the indispesible currency ... the world is flat. Proceed at your own risk.

LawsofPhysics's picture

Yes, but then again those are our ponzi insurgents...

"Full Faith and Credit"

tick tock motherfuckers.

gdogus erectus's picture

Oh, stop trying to cheer us all up.

Clock Crasher's picture

I've got some cheerful material further down. 

/coughing sarcastically

HRClinton's picture

You forgot...

 

Two-Tier Just-Us/Justice system ( TBTJ, Pedo/Pizzagate avoidance)

GMOs 

Education is a racket

Health Care is a racket

War on Drugs is a racket

War on Terror us a racket

Statistically insane over-representation of the Ashkenazi genome in halls of power and influence.

Willful Reverse Darwinism of the Population

KennyW's picture

Good comment. I'm going to copy and paste it to share with others.

Clock Crasher's picture

I Could think of two other lines to add to that list

Outstanding Public Debt/Private Debt Split 20 Trillion/46 Trillion

500 Billion Dollars Expensed on Usurus Interest Payments w/o Recession

earleflorida's picture

"The Colossal failure of the U.S. in Syria signals coming economic collapse for America"   by Dimtri Orlov @ Russi Insider  Sept. 21, 2017

https://www.sott.net/article/362555-The-colossal-failure-of-US-in-Syria-signals-coming-economic-collapse-for-America   

Today's problem,... yesteryears arrogance coming home to crucify America...--- has [but] 'two' choices in dealing with Israel regarding the 'Two-State (Palestinian) Issue or going down the Zionist `Hisorical path of Jew Apartheid!?!

Dated by Paul Rogers @ Open Democracy  Mar. 18,2010 

https://www.opendemocracy.net/paul-rogers/america-and-israel-historic-choice    

doctor10's picture

Why hasn't the USA used its "exorbitant privilege" to purchase the worlds gold from 1073 to present?

inquiring minds would like to know.

It would seem the "USA leaders" sold out We the People to be the mercenaries of a new world order dissolving before everyone's eyes on a week by week basis

Mebbe someone held the Dallas fairytale files over them all?

soyungato's picture

I think we are ready to back the dollar with gold since they have replenished the vault with Gaddafy's gold.

Akzed's picture

The dollar is a unit of measurement for gold and silver. From the Coinage Act of 1792:

SEC. 9. And be it further enacted, That there shall be from time to time struck and coined at the said mint, coins of gold, silver, and copper, of the following denominations, values and descriptions, viz. Eagles—each to be of the value of ten dollars or units, and to contain two hundred fort-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold. Half eagles—each to be of the value of five dollars, and to contain one hundred and twenty three grains and six eights of a grain of pure, or one hundred and thirty five grains of standard gold. Quarter Eagles—each to be of the value of two dollars and a half dollar, and to contain sixty one grains and seven eights of a grain of pure, or sixty seven grains and four eights of a grain of standard gold. Dollars or the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver, Half Dollars—each to be of half the value of the dollar or unit, and to contain one hundred and eighty-five grains and ten sixteenth parts of a grain of pure, or two hundred and eights of a grain of standard silver. Quarter Dollars—each to be of one fourth the value of the dollar or unit, and to contain ninety-two grains and thirteen sixteenth parts of a grain of pure, or one hundred and four grains of standard silver. Dismes—each to be of the value of one tenth of a dollar or unit, and to contain thirty seven grains and two sixteenth parts of a grain of pure, or forty one grains and three fifth parts of a grain of standard silver. Half Dismes—each to be of the value of one twentieth of a dollar, and to contain eighteen grains and nine sixteenth parts of a grain of pure, or twenty grains and four fifth parts of a grain of standard silver. Cents—each to be of the value of the one hundredth part of a dollar, and to contain eleven penny-weights of copper. Half Cents—each to be of the value of half a cent, and to contain five penny-weights and half a penny-weight of copper.

~

I know everyone here knows this, I just get goose bumps now hitting Save.

DisorderlyConduct's picture

You gotta hand it to them. They had it all set up right.

The thieves that came later jacked it all up.

WhackoWarner's picture

Good luck and wishful thinking.  With all respect there is no constitution in USA OR ANY OTHER COUNTRY anymore.  We have been brainwashed; corporate media pablumed and neutered.

All that remains is a VEIL of lies.  It is all there for anyone who cares to think.

 

WAR is the only solution to this garbage.  And I suspect that this is the reason why USA foreign "policy" is busy shopping up and down the various aisles of whom to hate looking for some idiotic policy that can be lied about and hit on.

Gotta find a war somewhere.  Gotta find an argument that will be embraced.  This is beyond any semblance of sanity.

This is beyond any semblance of sanity that people empower their government to destroy life for the sake of a few.

And there are only a few.  Look up the momma Rothschild quote on her sons and wars.  Dates way back.  " If my sons did not want a war etc."

Now has graduated into minion greed land.  And the minions of the ONE BANK are billionaires.  Well billionaires can jump from windows as easily as you and I.  Ask yourself...why is the richest idiot list?  Why are the Queenio, Vatican, various Italian families and never a Rothschild ever ever there? 

And then do a search for the study of the interlocking ownership and companies that own the world.  Was done few years back by scholars.

But war is the aim.  Right now it is a moving target.  PR firms must be looking at where the lies stick.  But war is the aim.  Who gives 2 flying frigs if it wipes out life?  As long as the trillionaires survive.  War accomplishes many goals.  NONE OF THESE have diddly to do with defending any more than money/power and actually the USA. Mind I suspect many wealthy .000001% have set up USA military to kill, anywhere and anytime to defend the monopolies of drugs, banking, central banking, politics, media etc. that allow the capture of everything of value on the planet.  Water everywhere.  Agriculture.  BUT the big thing I have said for years is how the frig do they monetize oxygen?   Water is being done.  Public lands.  Any rights.  I digress cause I am pissed.

 

And there really is no where to hide.  Much as Simon and the kids and others sell subsctiptions for survival  and land in Brazil?   There is no morality that guides these policies and lies.  Comes down to it?

 

 

 

Mustafa Kemal's picture

"there appears to be little the U.S. can do without risking an all-out world war."

Since it is doubtful that whoever runs this place will ever come to their senses, I fear that is certain.

It flows much more naturally than trying to fix our problems at home

Yars Revenge's picture

The US dollar is the worlds premier currency and will continue to be so for the forceeable future.

All this talk about the dollar coming to an end is rubbish.

sleigher's picture

Just because I am paranoid doesn't mean they aren't out to get me.

The_Juggernaut's picture

The US dollar is the worlds premier currency and will continue to be so for the forceeable future.

Yep.  It's kinda like bitcoin that way.  

Wait did you mean forcible or forseeable?

JRobby's picture

A paranoid is someone who knows a little of what's going on.
- William S. Burroughs

MozartIII's picture

Very True!!!

 

If the establishment schmucks feel threatened about the petro dollar, we will have war, lots of fricking war!

Implied Violins's picture

I'll repost this here, since it applies just as well:

The destruction of the dollar was the plan ever since 1913. Inflation has made it worth about 1% of what it was then, so that job has already been accomplished.

Beyond that, Nixon taking us off the gold standard then going to China was an acceleration of US decline. You can actually see as American industries were transferred there, so too did the Chinese economy rise and the US tank. This was PLANNED.

The next step is to transfer the reserve currency from US control to an interim BRICS control (which is why the Chinks have bought so much gold), with an eventual one world currency, as the Rothschild rag the Economist outlined in 1988.

Why is this not obvious to so many here? The USA and the dollar were set up for vilification in every way possible by the (((elite))) so that the transfer of control will be met with APPLAUSE. They WANT us to be happy that the evil west is dead - but THEY ARE THE ONES WHO DID THIS SHIT.

The international bankers are the ones to watch. They set us up to be dispatched. They should be the ones to reap the karma, along with US and western leaders who did their dirty work.

LawsofPhysics's picture

I don't think the chinese are ever going to back their currency with gold or be transparent in their accounting in order to become the world's reserve currency.  There is food for five and there are ten people at the table so to speak...

the chinese invented fiat currency for fuck's sake, we are all going to war whether we like it or not.

chestergimli's picture

It appears that the (((tribe))) are busy setting up another section of the world to be fleeced. Remember the opium wars of China and how the Chinese were being fleeced. Remember also India. In the meantime, the US was being set up as the kingpin and at the same time they were setting up the demise of the British reserve currency. It seems they jump from one section of the world to the next but they are always on top.

The reason they hate Christianity so much is because Our Lord Jesus Christ said no and stood between us and (((them))) with his sermon on the mount.

swmnguy's picture

How far can you see into the future?

I don't think anyone is talking about the dollar coming to an end.  I think the day when the US Dollar is no longer the global reserve currency is nearly upon us, however.  Global reserve status is what justifies the existence of about 80% of US Dollars, and probably about 80% of USD value and purchasing power.

There doesn't have to be one global "premier currency."  There hasn't always been one such.  Whatever two willing parties will agree to, you know.  The trouble is, the US standard of living, deficit spending on guns while keeping all the butter, and overall advantage in finance is completely reliant on the US Dollar's global reserve status.

Chupacabra-322's picture

Only a matter of time before a colossal haircut.

Only question is, will the barber leave us Bald?

Implied Violins's picture

He's going to go for the neck beard. Best to wax beforehand.

chubbyjjfong's picture

Its just coincidence then? Yes of course it is, no conspiracy here. Those pesky Venesualans and their medling ways just have to be stopped. For fuck sake bro!

Angel Eyes's picture

The world's premier currency ha ha ha ha. It's surprising you can even read. More like Jughead's Revenge.

saldulilem's picture

Wait, I thought it was the British pound?