The Wars We Fight – God Save the Petrodollar! (the coming collapse of the dollar)
What are Petrodollars?
The Petrodollar system is a scheme that was setup by the US, whereby all oil transactions in the world (with some exceptions) must be denominated in dollars. The enormous benefit to the US from this system cannot be over-emphasized. However, it is not so good for the rest of the world.
For the US, it essentially provides a free way to finance the purchase of oil imports. In other words, the US can simply print money whenever it needs to and exchange it directly for oil.
The rest of the world must exchange their currency for dollars to purchase oil. In order to protect themselves against world currency exchange fluctuations, these countries usually keep a significant reserve of dollars on hand, often in the form of US Treasury debt securities. This creates a stable and constant demand for the US dollar and a way to issue large amounts of debt at very low cost to the US (low yields paid to domestic/foreign investors in the form of interest payments).
This is how the US has been able to operate at very high deficit levels and still remain solvent and “prosperous”. No other country could achieve the type of long-term prosperity and economic stability that we have enjoyed here in the US (with it’s associated debt load) without the a constant and undeniable global demand for it’s currency.
What has history taught us about every financial scheme that has ever been conceived and perpetuated? They always eventually come crashing down. And it usually ends quite quickly, sometimes spectacularly, once the scheme starts to really unravel.
The Petrodollar Titanic – Plugging the Holes in the Sinking Ship (Petrodollar Warfare)
Why are Iraq, Iran, Libya, Syria, North Korea, Venezuela, Cuba, etc considered evil “regimes” by the U.S.? These countries are either operating outside of the Petrodollar system and/or have central banks that operate outside of the influence of the U.S. led banking cartels.
In 2000, Saddam Hussein had converted his country’s oil transactions to the Euro (under the Oil for Food Program) and was encouraging the rest of OPEC to follow suit. This represented a grave threat to the power of U.S. oligarchy at the time. The result of this threat was the invasion of Iraq under the false pretense of WMD’s/terrorism.
After the fall of Saddam Hussein, the US immediately moved Iraq back to the Petrodollar system.
What has happened since then? We have seen a continuing drive to invade countries (that are easy prey) which either threaten the Petrodollar system and/or dollar hegemony…mostly under the umbrella of the “War on Terror”. When that has failed to illicit the desired support of the American people, human rights violations, dangerous “regimes”, WMD threats, threats to democracy, etc have been cited.
The Euro-Threat – Financial Terrorism
Is the financial turmoil in Europe a coincidence, or a strategic initiative? The Euro was quickly becoming a significant threat to both the Petrodollar system and the hegemony of the dollar (as the world reserve currency). The solution? Destabilize the Euro in order to prevent a move away from the dollar.
The Collapse of the Dollar
The pending collapse of the Dollar is being seen/felt globally…in world economies, financial markets and in ever-expanding military actions. The Petrodollar Titanic is sinking. There are simply too many holes to be plugged at this point in order to keep the system afloat.
There are enormous amounts of excess dollars floating around globally right now because of the Petrodollar system. As more countries (plan to) move away from this system, the excess dollars will begin to find their way back to the US economy. In other words, as the dollar becomes less significant, so will the need to hold dollars and reserves in the form of U.S. Treasury Securities. U.S. government debt will become increasingly more difficult to finance and inflation will show up as the unneeded dollars begin to flood the U.S. economy.
What will happened when (not if) the dollar collapses? If we don’t get into an all out international war before that happens, this is what we can expect at home here in the USA:
• The dollar will lose it value
• The weight of the US deficit will come crashing down
• Borrowing will become prohibitively expensive. The free financing made possible by the Petrodollar system will be eliminated
• Low cost oil imports made possible by the Petrodollar system will no longer be possible
• Hyperinflation will occur very quickly
• People will not be able to afford to buy food to eat, gas for their cars, energy to heat/cool their homes, water, clothes to wear or any of the basic necessities
• Payments from social services such as social security, disability, food stamps and pensions may be reduced, or perhaps even eliminated
• Production and transportation will be severely impacted. Farm (food) production will decrease, energy production will decrease, transportation (planes, cars, buses, trains, trucking, etc) will be prohibitively expensive
• Widespread riots and civil unrest will occur
• Marshall law will be enacted
This time is approaching rapidly. The preparations for the impending collapse can clearly be seen with the restrictive legislation being passed (quite swiftly at this point) that will be needed in order to enforce order as the chaos begins to unfold.
What can we do as individuals to avert this disaster? Sadly, at this point it will be difficult to avoid. It would be kind of like Enron deciding in their final hour to start operating in an ethical and economically feasible manner. Once the snowball is that large, it’s hard to stop. We can however, try and be prepared as best as possible.
For more information, please see the videos/articles below:
The Petrodollar System
Enron The Smartest Guys In The Room
Petrodollar Warfare and the Collapse of the US Dollar – Imperialism in the 21st Century
The Real Reasons Why Iran is the Next Target:
The Emerging Euro-denominated International Oil Marker
Iran, China, And The Petrodollar
Tehran (Iran) Dumps Dollar for Euro
Syria Switches To Euro Amid Confrontation With US http://www.informationclearinghouse.info/article11894.htm
Libya Gold News report (Libya attempts to switch off USD) http://www.youtube.com/watch?v=GuqZfaj34nc&feature=player_embedded
U.N. to Let Iraq Sell Oil for Euros, not Dollars (2000) http://archives.cnn.com/2000/WORLD/meast/10/30/iraq.un.euro.reut/
North Korea Embraces the Euro
Iran, Venezuela Declare War on Petrodollar
New enemies – The Petrodollar and The Petroeuro
Beginning Of The End For The Petrodollar? Saudi Arabia And China Team Up To Build A Gigantic New Oil Refinery
The Demise of the Dollar
History of the Petrodollar: Iran and Iraq