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

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.

Comments

globalintelhub Sep 22, 2017 7:44 AM Permalink

This article is correct, but highly misleading - the dollar isn't under 'attack' in fact it is the USA who has pressured China for financial reforms to make the Yuan more of a global currency.  There's no risk of 'world war' this article paints a picture as if somehow a strong BRIC financial system will collapse the US which is ridiculous when it is USA that is financing this and pressuring BRICs to have a robust financial system.  At the moment china is a house of cards teetering on economic collapse.  As we explain in our book www.splittingpennies.com the USD will remain a global reserve for the next 100 years unless some new event changes things.  China is not a real innovator and thus can only 'copy and paste' from New York and London.  There's no real meat here, other than to make people confused.. what are investors supposed to do after reading this?  Buy gold?  And then what?   The article mentions well that Nixon created Petro Dollar but fails to mention at this time China was opened up, this was Nixon's "Triangular Diplomacy" idea - but for FX it was critical to provide cheap labor (i.e. crap made in junk China factories) to support a dwindling US manufacturing base.  When Nixon opened China during this same period there was no economy in China at all, in cities there were Bicycles.  This is perhaps more important to note than the Arab oil deal, because alternatives exist for energy.

wisebastard Sep 21, 2017 10:19 PM Permalink

its pretty obvious. the US will kick the can down the road as far as the can and bomb anyone who tries to reason with them. when China and Russia stand up Americans will change their attitudes, and it wont be pretty. there is nothing more selfish then what was mentioned in this article.......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”?

MK ULTRA Alpha Sep 21, 2017 9:41 PM Permalink

It is a historical system of massive losses nearly every ten years. S&L robbery, tech crash robbery, 2008-2009 banking robbery, over and over the same cycle of destruction. Who is doing this? It's the Jews. When the dollar world reserve currency is destroyed, it was to be the new world currency of the one world government. Funny it's not working out because of BRICS. Thus we will have a global war. The only thing the Americans are good for is a beast of burden for the Jews. The Jews are beating the drums of war and it will become louder and louder. ZioChristians are liars, thieves and murderers living in a racial caste system, Jews, white then blacks and anyone not white. It's sick. ZioChristians are from the lowest socioeconomic class and are robbed over and over, send their sons and daughters to die in wars and believe the lies of Ziotelevision. It's sick. I met one the other day, he said IF WE DON'T BLESS ISRAEL WE'RE CURSED. I think we're cursed from being associated with the Jews.

Nobodys Home Sep 21, 2017 8:48 PM Permalink

"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."

This is the cutest way I've heard it explained. So nicey nice and sweet.

Silver Savior Sep 21, 2017 8:26 PM Permalink

Gold and silver! Butt coin is an investment vehicle but not a store of value. Never dump one for the other. This is going to be epic. Btw JM Bullion has 2015 and 2016 silver Pandas on sale. Around $23 what a steal! Picked some up this morning!

MK ULTRA Alpha Silver Savior Sep 21, 2017 9:54 PM Permalink

Silver may go down further, maybe to $14, I'm buying all the way down. Below $14 buying a truck load, at $14 selling everything to buy more silver. Will be sitting on a mountain of silver using it as a bunker with guns and ammo. Sitting in the corner with stacks of silver, nothing else, just food, water, guns and ammo, waiting for the crash of Babylon the great. I will NOT Bless Israel, nor will they get one more dime from me, will sell silver at a high and will be starting a farm in south America, swiss of south america, Uruquay. This is no longer America, brainwashed ZioZombies, ZioCommunist, ZioMedia, ZioZuckerNazi, ZioCensors, ZioGovernment, ZioLies, ZioFakeNews, ZioFreaks everywhere, a Ziofreak land headed down.

In reply to by Silver Savior

Silver Savior MK ULTRA Alpha Sep 22, 2017 12:44 AM Permalink

Very well said but I am acting like silver will not go down further. The stakes are too high to wait for lower prices. I am not going to sell out my life because I wanted to save a few fiat bucks today. I mean if it goes lower then that's great but I am just not factoring it into the equasion. I am also going to stop buying any more crypto and go back to solely buying silver again this is too real to be scared.

In reply to by MK ULTRA Alpha

MK ULTRA Alpha Silver Savior Sep 22, 2017 3:18 AM Permalink

I will buy all the way down or if it increases I will buy. I got a feeling this is going to end real bad for this sick system. I figure 5000 ounces will bring a good $500K before this is over. I don't think the Fed is in control. Use of dollar as world reserve currency causes demand for dollars. No world reserve currency, then a huge amount of dollars must be removed from system. Things like gas will be $10 gallon, anything imported will cost more. Silver and gold will be valued not by NYC but by the world. meaning like $10 gas, 5 times valuation, around $100 an ounce. If a major war breaks out, it will be now, if not, within next 5-7 years. BRICS are moving fast, too much failure in valuation of commodities in dollars. A sea change is slowly moving against the Fed. The world is tired of USA dictating to them. And US fiscal debt is starting to cause cracks in the system. We may see $30 trillion US national debt at rate of borrowing. Silver to $100-$150.

In reply to by Silver Savior

Silver Savior MK ULTRA Alpha Sep 22, 2017 10:09 AM Permalink

I tend to think along those same lines but I am forecasting silver being able to buy atleast $1200 in value terms of what $1200 USD buys today. The basis for my reasoning is silver for investment is more rare than gold so if gold is $1300 silver should ultimately do even better but I just call it at $1200 just because silver does not have the same amount of publicity as a monetary metal that gold does. All in all silver is in for a big move.

In reply to by MK ULTRA Alpha

MK ULTRA Alpha harleyjohn45 Sep 22, 2017 3:04 AM Permalink

Can you read? I will sell at a high and use an airliner. medicare?, America medical is ranked number 11 out of 11 advanced countries but number 1 in cost. another ranking ranked USA at number 39 medical. I would get much better medical care outside the US. National medical insurance is much less than medicare. LOL you're a standard TV head. Americans are sick, after watching TV for two generations of millions of TV murder after murder, they murder each other with substandard medical care, or anyway they can. Are you a ZioChristian, you need to send Israel your last dime or America is cursed.

In reply to by harleyjohn45

Beastofsteel Sep 21, 2017 7:44 PM Permalink

It looks like America will be left out in the cold because we don't play well with others and kill countries that don't play by the rules.  I would imagine the rest of the world has just about had enough. 

You Only Live Twice Sep 21, 2017 7:07 PM Permalink

It is important to remember that the Petrodollar's principle functions was to export inflation. Countries wishing to purchase Oil had to purchase US debt to get those dollars, and those dollars were then recycled by the countries selling.The gradual rejection of the US dollar will eventually mean that those dollars, and most importantly the debt attached to them will return home to roost. The inflationary influences will creep up, first slowly, and more and more rapidly.

s2man Sep 21, 2017 7:03 PM Permalink

I really must become a writer.  All you have to do is mash together a bunch of previous OpEds,  quote some smart person and quote myself to fill more space. Sheesh.   worthless re-hash of what we all already knw.

Maestro Maestro Sep 21, 2017 6:32 PM Permalink

USA/The West is hopeless.

However,

The BRIC countries are only part of the problem and not the solution.

The BRICs are all IMF member countries and are thus forbidden to monetize gold, or link their currencies to gold, or use gold as a trading or exchange mechanism:

http://m.beforeitsnews.com/silver/2016/04/how-the-imf-forbids-the-use-o…

http://www.24hgold.com/english/news-gold-silver-why-does-the-imf-prohib…

India recently collaborated with Western bankers and following the West's instructions, temporarily destroyed the purchasing power of its own Indian population by demonetizing physical cash, under the guise of eliminating tax evasion and cash-only criminal activity. This has had the effect of crashing the gold price by temporarily removing the Indians from the gold market, exactly when the Trump inauguration lit a fire under the gold price.

The Russians never abstained from using dollars even at the time of the communist USSR! If they did not demand gold for their oil during the Cold War, why would the Russians do it now when the Russian central bank is owned and controlled by the City of London banking establishment since the creation of the new Russian Constitution under Yeltsin? The Russians are forbidden to issue their own currency the Ruble without permission from Western bankers and the Russians can only buy US Treasuries with the dollars they get for their oil, not gold. There are more dollar assets than Rubles in Russia:

http://anonhq.com/checkmate-central-bank-russia/

http://www.pravdareport.com/russia/economics/30-12-2014/129431-usa_russ…

The gold price would have skyrocketed if the Russians and the Chinese were buying gold hand over fist as alleged. Why do you think that Western bankers would give gold away at or below cost to their purported enemies?

Unless they were not enemies in reality, and just partners playing good cop, bad cop for the purposes of fooling and manipulating their unsuspecting respective populations?

http://batr.org/forbidden/091217.html

http://www.mygen.com/users/ufo/Mao_was_a_Yale_Man_2.html

Why do the Russians never ask the Americans to leave Syria where the Americans are illegal invaders under international law? Why did the Russians never prevent the Americans and the Israelis from attacking their allies the Syrians?

The Shanghai Gold Exchange is a fraud designed to legitimize the fraudulent COMEX "discovered" gold price. Goldman Sachs and JPM never could have manipulated the gold and silver prices lower without active Chinese collaboration. That the Shanghai Gold Exchange is a physical only market is a LIE:

https://www.sprottmoney.com/blog/the-new-shanghai-gold-exchange-does-an…

The Chinese government defrauded and stole from their own Chinese citizens by encouraging them to buy gold at the top. The Chinese bankers then colluded with JPM and Goldman Sachs to crash the gold and silver prices. Large amounts of physical silver were leased out and sold into the physical markets by the Chinese authorities as well:

http://www.silver-investor.com/charlessavoie/cs_july04.htm

http://m.digitaljournal.com/article/279166

http://www.dnaindia.com/money/column-china-urges-citizens-to-buy-gold-a…

Do not forget: It's the international ruling classes against the common folk. That's the real meaning of globalism.

TeethVillage88s Sep 21, 2017 6:22 PM Permalink

Here is what you need to know... 40:1 Leverage at Banks wasn't a mistake, wasn't an oversight, was predicted, was known, "Get Bill Black. Kill Him. I MEAN kill him dead." Charles Keating caught on tape in Savings and Loan Scandal.

- Never will US Congress put TBTF Banks and big contributors in the spot light, in front of congress, in front of MSM
- Inflation = Big Money Supply & Money Velocity
- CPI is warped by Boskin Commission Reforms of CPI in 1996
- Federal Reserve will never raise Fed Target Interest Rate significantly since there will never be evidence of Inflation under current polices
- USDs Coming Home to USA is a new case, this case has not been tested yet
- Dow Jones 30,000 is being talked about
- Manipulated Monetary Policy since 2001 is 16 years old, LIRP
- Manipulated Congress is at least dating back to Death of JFK
- USA as an Empire in Beta Phase goes back to Monroe Doctrine

oh and death to Iran

TeethVillage, Sewer Cleaner

Tommy_Peters Sep 21, 2017 6:21 PM Permalink

Pawn shop. Not quite the Madoff scandal but if Bernie was able to wing it by switching tracks like the Federal Reserve did, from gold to crude, and still have the gullible buy their paper, De Niro would be one short of the 103 he made.  Seriously, folks, we are reading this second-hand. In two shakes, one Sheikh (pun intended) Imran Nazar Hosein explained the supplanting of Bretton-Woods for the Petrodollar in a 2013 lecture in Malaysia entitled The International Monetary System & the Future of Money, gleaned from his 2007 book entitled Islam and the Future of Money, where the sheikh likened the Federal Reserve to a private Pawn shop of the Zionist banking elite, printing dollars willy nilly; and that it was de Gaulle who exposed the Ponzi when he called upon Nixon to return the gold France had (in the shop) in exchange for the dollars it held.  Perhaps ZH would invite Imran over to give us a piece, but tell him if he veers into the Zionist-Christian alliance that is enabling the ruse and it is the Vatican that is driving the ship, it may touch a few nerves, on this forum.

ali-ali-al-qomfri Sep 21, 2017 6:04 PM Permalink

Our Reserve-Currency Lease is about to expire.We looked awesome with it though. We road it hard, didn't maintain it, and treated it with disrespect, took long road trips, off-road and across a million pot-holes.And now we have to turn it in and pay the penalties for;smoke damage, missing buttons, scratches, dents and dings, excessive mileage, stains and blemishes.We'll be walking from now on.

Son of Captain Nemo Sep 21, 2017 5:58 PM Permalink

Why the "idle threats" (https://www.rt.com/usa/404127-trump-north-korea-new-sanctions/) and "looting" (https://southfront.org/russian-special-forces-repel-us-planned-attack-s…) (https://southfront.org/syrian-democratic-forces-capture-key-oil-fields-…) will only continue until "Samson" (https://en.wikipedia.org/wiki/Samson_Option) is FULFILLED!

DONALD TRUMP TO PRESIDENT(S) PUTIN AND JINPING...

PLEASE SEND U.S. THE $5 TRILLION WE REQUESTED IN GOLD AND SILVER OR WE WILL KILL YOU AND OURSELVES IF WE DON'T GET THE "RANSOM" FUND WE WANT!!!

AFTER ALL?... YOU DON'T UNDERSTAND WHAT "MORE OF EVERYTHING" MEANS WHEN YOU'VE NEVER HAD IT!!! (https://www.youtube.com/watch?v=d2JKXbVGq7A)

yarpos Sep 21, 2017 5:55 PM Permalink

If by "under attack" you mean the world doesnt feel obliged to use it any more then yes it probably is.   Of course there is the option to just have a national currency and get on with your own business like most civilised countries.    The whole world dominance thing really hasnt worked out,  never really does long haul.

Jack Oliver Sep 21, 2017 5:43 PM Permalink

Looks like MAGA was 'doublespeak' for ' Make the $US great again '

Through any FUCKING means available to them !!

They rigged the election - just like they rig all FUCKING elections !! Just like they rigged BREXIT - you - the people - thought you had some FUCKING power !!!

You were sadly deluded !!

sinbad2 Sep 21, 2017 5:42 PM Permalink

It would be interesting to know the cash flows.In theory American banks would only be receiving half as much money, since the oil price dropped by half.I think the low oil price would be a bigger factor than countries dumping the dollar for trade at the moment.Obama really fucked up when he crashed the oil price to get Russia.

smacker Sep 21, 2017 5:26 PM Permalink

The petrodollar was always a super win-win deal for the US. A coupla benefits:

  • - The huge international demand for USD to buy oil created a strong USD on the FX markets which in turn allowed domestic interest rates to be lower than otherwise would be the case. This in turn allowed US corps to borrow and expand more easily and of course consumer credit was cheaper, giving way to the consumer society. A win-win merry go round.
  • - Add to that the huge recycling of USD from oil producers back into the US by employing construction corps like Bechtel to build the Riyadh city in the desert and its infrastructure, thereby making vast profits.