Donald Hank
How the petrodollar perpetuates Islamic terror
By Donald Hank
Casey Research has done an outstanding job of explaining the origin and workings of the petrodollar.
To summarize their analysis, In 1971, Richard Nixon killed the gold standard, unconstitutionally circumventing congress. This deed is far more egregious than Watergate in the harm it did to the US people.
To keep the dollar's value propped up without gold, Nixon, at Kissinger's instigation, struck an ingenious deal with Saudi Arabia's King Faisal. The US would protect Saudi oil fields and protect them from enemies (Iran, Iraq, the Soviet Union, etc.) in exchange for the Saudis' demanding payment in US dollars for their oil.
This meant that the US could print essentially unlimited numbers of dollars and the value would never drop. This explains why the Fed could launch quantitative easing (QEs 1, 2, etc.) and not trigger another Weimar type inflation cycle.
But several countries are fouling up the works. Iran, Russia, China and the rest of the BRICS countries are deliberately dedollarizing world trade by using currencies other than the dollar in their purchase of oil and other commodities. European countries are going along with this.
I had dealt with dedollarization here, and specifically the role the China's yuan (RMB) plays in that process here.
We are being assured by both the msm and the conservative press that the reason the US is sanctioning Iran is that that country is allegedly developing a nuclear weapon. Yet Pakistan, another Muslim country, has nukes and the same politicians and media wringing their hands over Iran are blithely ignoring them. Just as they are ignoring N. Korea, which is run by a certified nut. In fact, according to none other than Israeli news outlet Haaretz, Israel, which is squealing the loudest about Iran's nukes (of which neither hide nor hair is yet to materialize) has at least 80 nukes of its own. Likewise, we are told that the reason Russia is a rogue is that it has annexed Crimea and aided the pro-Russians in Eastern Ukraine (which are being bombed by the US-backed Kiev junta). Yet Crimea held a referendum and over 90% said they wanted to leave Ukraine. Now when Scotland held a referendum to do likewise and end its relationship with the UK, this was regarded as perfectly acceptable by the Western powers. One referendum was illegal but the other was perfectly acceptable. No explanation given.
Now, returning our eyes to the ball, recall that when a group of Saudis attacked the Twin Towers and Pentagon in 2001, GW Bush stood with a group of firemen at ground zero and declared on national TV "The people who knocked down these buildings are going to hear from us." Since 15 of the 19 people who knocked down the buildings were Saudis, the other 3 were close allies of that country and all were sponsored by the Saudi royal family, one would have expected the US military to hold Saudi Arabia accountable.
Instead, Bush first waged a campaign in Afghanistan and then one in Iraq, and when Baghdad fell and Saddam Hussein was captured, Americans, in a fog of bewilderment, managed to mentally conflate the losers of these wars with the "people who knocked down these buildings." That piece of theater was a work of deceptive genius.
What had Bush accomplished?
He had cleverly given the Saudis tacit – or was it express? – permission to terrorize the Christian West as the first step in the Islamization of our region, all under the petrodollar agreement. The Saudis owned us. If they backed out of the petrodollar agreement, our economy was toast.
Meanwhile, in Europe, the refugee waves generated by the Iraqi conflict, coupled with the anti-Christian EU leadership, contributed mightily to the Islamization of Europe, which is now a work in progress that is well underway and is sowing terror on that continent. (Notice that the Saudis were not present in the Charlie Hebdo march in Paris).
The US, ie, US 2 (the shadow government, or deep state, which is sharply antagonistic to US 1, We the People – I have outlined this dichotomy here) was still propping up the petrodollar in perfect harmony with the Sunni Saudi government and, to solidify relations, was throwing in a handsome bonus for the Sunni radicals supported by them, namely, permission to wage terror. (Another juicy bonus is the opposition of US 2 and partner Israel, to Shia Iran, the nemesis of the Sunnis in Riyadh).
Today, the same process is underway and has advanced greatly.
But how do the US shadow government and its allies expect to win this desperate gamble that they put into motion in the early 70s?
It appears as if they have run through their repertoire, from abandonment of the gold standard to the petrodollar and all the costly wars and placating of the Saudis by tacitly supporting Islamization via wars and other subterfuge, to the sanctions against the dedollarizing countries.
None of these sanctions is really working and will predictably fail in the long run. Worse, sanctions and wars will be useless against the player of last resort, China, which can and almost certainly will use the RMB as the weapon of choice against the dollar (as I pointed out here, of all the world powers, China has the only currency backed up by real economics, not debt – ie, reprobate Keynesianism, which I dissected here).
And if there is an American Kim Jong-un loose somewhere in the State Department or Defense Department, he will be no match for the full arsenal of both Russia and China, which the Chinese believe can wipe out the US in an instant, as shown by my translation here.
So who will bail out US 1 – you and me – when the dollar falls?
China, of course. There is no way they will let their biggest trading partner fail.
Of course, they will dictate the terms. Including sanctions for bad behavior. It is doubtful that regimes sponsoring Islamic terror – like the US/Saudi tag team – will get off lightly following this changing of the global guard.
© Donald Hank
March 14, 2015
Casey Research has done an outstanding job of explaining the origin and workings of the petrodollar.
To summarize their analysis, In 1971, Richard Nixon killed the gold standard, unconstitutionally circumventing congress. This deed is far more egregious than Watergate in the harm it did to the US people.
To keep the dollar's value propped up without gold, Nixon, at Kissinger's instigation, struck an ingenious deal with Saudi Arabia's King Faisal. The US would protect Saudi oil fields and protect them from enemies (Iran, Iraq, the Soviet Union, etc.) in exchange for the Saudis' demanding payment in US dollars for their oil.
This meant that the US could print essentially unlimited numbers of dollars and the value would never drop. This explains why the Fed could launch quantitative easing (QEs 1, 2, etc.) and not trigger another Weimar type inflation cycle.
But several countries are fouling up the works. Iran, Russia, China and the rest of the BRICS countries are deliberately dedollarizing world trade by using currencies other than the dollar in their purchase of oil and other commodities. European countries are going along with this.
I had dealt with dedollarization here, and specifically the role the China's yuan (RMB) plays in that process here.
We are being assured by both the msm and the conservative press that the reason the US is sanctioning Iran is that that country is allegedly developing a nuclear weapon. Yet Pakistan, another Muslim country, has nukes and the same politicians and media wringing their hands over Iran are blithely ignoring them. Just as they are ignoring N. Korea, which is run by a certified nut. In fact, according to none other than Israeli news outlet Haaretz, Israel, which is squealing the loudest about Iran's nukes (of which neither hide nor hair is yet to materialize) has at least 80 nukes of its own. Likewise, we are told that the reason Russia is a rogue is that it has annexed Crimea and aided the pro-Russians in Eastern Ukraine (which are being bombed by the US-backed Kiev junta). Yet Crimea held a referendum and over 90% said they wanted to leave Ukraine. Now when Scotland held a referendum to do likewise and end its relationship with the UK, this was regarded as perfectly acceptable by the Western powers. One referendum was illegal but the other was perfectly acceptable. No explanation given.
Now, returning our eyes to the ball, recall that when a group of Saudis attacked the Twin Towers and Pentagon in 2001, GW Bush stood with a group of firemen at ground zero and declared on national TV "The people who knocked down these buildings are going to hear from us." Since 15 of the 19 people who knocked down the buildings were Saudis, the other 3 were close allies of that country and all were sponsored by the Saudi royal family, one would have expected the US military to hold Saudi Arabia accountable.
Instead, Bush first waged a campaign in Afghanistan and then one in Iraq, and when Baghdad fell and Saddam Hussein was captured, Americans, in a fog of bewilderment, managed to mentally conflate the losers of these wars with the "people who knocked down these buildings." That piece of theater was a work of deceptive genius.
What had Bush accomplished?
He had cleverly given the Saudis tacit – or was it express? – permission to terrorize the Christian West as the first step in the Islamization of our region, all under the petrodollar agreement. The Saudis owned us. If they backed out of the petrodollar agreement, our economy was toast.
Meanwhile, in Europe, the refugee waves generated by the Iraqi conflict, coupled with the anti-Christian EU leadership, contributed mightily to the Islamization of Europe, which is now a work in progress that is well underway and is sowing terror on that continent. (Notice that the Saudis were not present in the Charlie Hebdo march in Paris).
The US, ie, US 2 (the shadow government, or deep state, which is sharply antagonistic to US 1, We the People – I have outlined this dichotomy here) was still propping up the petrodollar in perfect harmony with the Sunni Saudi government and, to solidify relations, was throwing in a handsome bonus for the Sunni radicals supported by them, namely, permission to wage terror. (Another juicy bonus is the opposition of US 2 and partner Israel, to Shia Iran, the nemesis of the Sunnis in Riyadh).
Today, the same process is underway and has advanced greatly.
But how do the US shadow government and its allies expect to win this desperate gamble that they put into motion in the early 70s?
It appears as if they have run through their repertoire, from abandonment of the gold standard to the petrodollar and all the costly wars and placating of the Saudis by tacitly supporting Islamization via wars and other subterfuge, to the sanctions against the dedollarizing countries.
None of these sanctions is really working and will predictably fail in the long run. Worse, sanctions and wars will be useless against the player of last resort, China, which can and almost certainly will use the RMB as the weapon of choice against the dollar (as I pointed out here, of all the world powers, China has the only currency backed up by real economics, not debt – ie, reprobate Keynesianism, which I dissected here).
And if there is an American Kim Jong-un loose somewhere in the State Department or Defense Department, he will be no match for the full arsenal of both Russia and China, which the Chinese believe can wipe out the US in an instant, as shown by my translation here.
So who will bail out US 1 – you and me – when the dollar falls?
China, of course. There is no way they will let their biggest trading partner fail.
Of course, they will dictate the terms. Including sanctions for bad behavior. It is doubtful that regimes sponsoring Islamic terror – like the US/Saudi tag team – will get off lightly following this changing of the global guard.
© Donald Hank
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