When you think of the petrodollar inevitably you will think of Saudi Arabia and the agreement they made with the Nixon Administration to sell all of their oil in dollars. That's why what happened just two weeks ago is so significant.
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
- from Ernest Hemingway’s 1926 novel, The Sun Also Rises.
It has been fifty years since Nixon took the USD off the gold standard. He had to because we printed so much money to pay for the Vietnam war, we didn't have the gold to cover the currency which had been issued. Oil prices soared in '73 when the US supported Israel in the Arab-Israeli war, and the Saudi's led a US oil embargo. However, in '75 Kissinger cut a deal with the Saudis to only sell their oil in USD. Additionally, Saudi and OPEC oil profits would be recycled back into the U.S. by buying U.S. assets (Treasuries, Stocks, Real Estate etc.) and U.S. weaponry. And so the petrodollar was created... and anyone who challenges this system faces the wrath of the US.
The corona virus has upset the global economy, now the old normal. It has provided a distraction that has allowed for the transfer of trillions of tax dollars to the largest most corrupt corporations. The Fed has cranked up the presses and is pumping out dollars at an unprecedented rate. Now many people say the US dollar (USD) isn't based on anything and is just paper. However, it is based on something, oil. Ever since we cut the deal with the Saudis in the early '70's all countries must buy their oil (and many other commodities) in USD. Last week oil went negative because there is such a glut and lack of storage. So in comes the Fed propping up oil prices with our tax dollars, also boosted by Trump's threat to shoot down Iranian gunboats. How do we get out of this mess? How about a war or two?
Permanent economic sanctions come with a risk, especially when the sanctioned nation doesn't bend to your will. This risk goes double when the U.S. is imposing sanctions to multiple nations.
Those nations could start working together.
Kim Iversen just dropped a crystal clear, HUGE YouTube video (25 minutes--watch the entire thing) that really everybody in the country should watch.
And the Democrat neocons are cheering him on.
Exclusive: Saudi Arabia threatens to ditch dollar oil trades to stop 'NOPEC' - sources https://t.co/SlSrpIZmx1 pic.twitter.com/Cn5ASdOA7J
— Reuters Top News (@Reuters) April 5, 2019
While the GOS is going into spasms of ecstasy today over Michael Cohen's revelation, the big news of the day came from Germany.
It's not like you couldn't see this one coming.
Last week, right before Trump imposed new economic sanctions on Iran, Reuters posted this headline:
Iran oil sanctions could advance China's 'petro-yuan'
