As noted by many of our readers, one of the key topics omitted from our article on the inevitability of economic collapse, was the petrodollar system. Due to it’s significance, we felt that this subject deserves it’s own article. If you have never heard of the petrodollar, don’t be surprised. There’s a good reason for this. No major news network will dare touch this subject, because if this information was ever to become public knowledge, politicians would find it next to impossible to convince American people to support any more wars. Public approval of wars is only possible as long as people remain ignorant of the primary driving force behind our foreign policy. The reason you haven’t heard of the petrodollar system is because our government wants you to think that we start wars to spread democracy.
However, if you want to distinguish truth from propaganda, if you want to know the real reasons behind the global conflicts in our recent history, you must first learn about the petrodollar system. Without this crucial piece of info, you will have a hard time understanding what really happened in Libya, what’s happening in Syria right now and what’s going to happen in Iran next.
Why did NATO and the U.S. aid Libyan “rebels” in killing Gaddafi? Why was our government willing to support and arm the same terrorists that would later turn on our embassy and murder Libya ambassador Chris Stevens? Why was killing Gaddafi so absolutely imperative?
Why are we now doing the same thing in Syria? Why are U.S. operatives currently on the ground in Syria aiding Al Qaeda to topple Assad? Why are we willing to work along side known terrorists just to destabilize Syria and overthrow the regime there?
Why are we willing to risk World War 3 by attacking Iran, a key Russian and Chinese ally? Pakistan and North Korea already possess a nuclear stockpile, but Iran is years away from developing a nuclear weapon. Iran has no military capability to target the U.S. and it has not attacked another country since 1798. Yet, the media is trying to convince us that we are weeks away from Ahmedinajad unleashing his non-existent weapons of mass destruction. Sound a little familiar? Have we heard this before, maybe?
So what is the petrodollar system and why is it so important? Why is the United States willing to risk a new world war just to maintain the hegemony of the petrodollar? To get a proper perspective we need to start with a quick historical background:
Bretton Woods Conference
In July of 1944, as World War II was still raging, 730 delegates from all 44 Allied nations gathered in Bretton Woods, New Hampshire, to setup institutions and procedures to regulate the international monetary system and to establish the rules for commercial and financial relations among the world’s major industrial states.
The Bretton Woods Agreement established the dollar as world’s reserve currency, which meant that international commodities were priced in dollars. The agreement which gave the United States a distinct financial advantage, was made under the condition that those dollars would remain redeemable for gold at a consistent rate of $35 per ounce. The fixed dollar to gold convertibility rate established a stable platform for global economic growth.
As the issuer of the world’s reserve currency, the United States promised to print dollars in direct proportion to its gold reserves. However, this agreement was based on an honor system, since the Federal Reserve refused to allow any audits or supervision of it’s printing presses.
The U.S. defaults on it’s obligation and violates Bretton Woods Agreement
In the years leading up to 1970, expenditures in the Vietnam war made it clear to many countries that U.S. was printing far more money than it had gold. In response to this and the negative U.S. trade balance, nations began demanding fulfillment of America’s “promise to pay” – that is, the redemption of their dollars for gold. This of course set off a rapid decline in the value of the dollar. The situation climaxed in 1971 when France attempted to withdraw it’s gold and Nixon refused.
On August 15, President Nixon made a televised announcement
referred to as the Nixon shock, stating the following:
“I have directed the Secretary of the Treasury to take the action necessary to defend the dollar against the speculators.
I have directed Secretary Connolly to suspend temporarily the convertibility of the dollar into gold or other reserve assets,
except in amounts and conditions determined to be in the interest of monetary stability and in the best interest of United States.”
This was obviously not a temporary suspension as Nixon claimed, but rather a permanent default. And for the rest of the world who would entrust the United States with their gold, it was outright theft.
The birth of the petrodollar leads to global domination
In 1973, President Nixon asked King Faisal of Saudi Arabia to accept only U.S. dollars as payment for oil and to invest any excess profits into U.S. treasury bonds, notes and bills. In return Nixon offered military protection for Saudi oil fields. The same offer was extended to each of the world’s key oil producing countries and by 1975 every member of OPEC had agreed to only sell their oil in U.S. dollars.
The act of moving the dollar of off gold and tying it to foreign oil, instantly forced every oil importing country in the world to start maintaining a constant supply of the Federal Reserve paper. And in order to get that paper, they would have to send real, physical goods to America.
This was the birth of the Petrodollar. Paper went out, everything America needed came in and the United States got very, very rich as a result. It was the largest financial con in recorded history.
The arms race of the Cold War was a game of poker. Military expenditures were the chips and the U.S. had an endless supply of chips. With the Petrodollar under it’s belt, it was able to raise the stakes higher and higher, outspending every other county on the planet. Until eventually U.S. military expenditure surpassed that of all other nations in the world combined. Soviet Union never had a chance.
The collapse of the Communist block in 1991 removed the last counterbalance to America’s military might. United States was now an undisputed super power with no rival.
Many hoped that this would mark the beginning of a new era of peace and stability. Unfortunately, there were those in high places who had other ideas.
Petrodollar system must be maintained at any cost
Within that same year, the U.S. invaded Iraq in the first Gulf War. And after crushing the Iraqi military and destroying their infrastructure, including water purification plants and hospitals, crippling sanctions were imposed which prevented that infrastructure from being rebuilt.
These sanctions, which were initiated by Bush Sr. and sustained throughout the entire Clinton administration, lasted for over a decade and were estimated to have killed over 500,000 children. The Clinton administration was fully aware of these figures.
Excerpt from a May 5, 1996 interview:
Lesley Stahl from 60 Minutes show, asks Secretary of State Madeleine Albright about the U.S. sanctions against Iraq:
“We have heard that a half million children have died.
I mean, that’s more children than died in Hiroshima.
And, you know, is the price worth it?“
Secretary of State Madeleine Albright replies:
“I think this is a very hard choice,
but the price–we think the price is worth it.”
Miss Albright, what exactly was it that was worth killing 500,000 kids for?
In November in 2000, Iraq began selling it’s oil exclusively in euros. This was a direct attack on the dollar and on U.S. financial dominance and it wasn’t going to be tolerated. In response, the U.S. government with the assistance of the mainstream media began to build up a massive propaganda campaign, claiming that Iraq had weapons of mass destruction and was planning to use them.
In 2003, the U.S. invaded and once they had control of the country, oil sales were immediately switched back to dollars. This is particularly notable due to the fact that switching back to the dollar meant a 15-20% loss in revenue due to euros higher value. It doesn’t make any sense at all, unless you take the Petrodollar into account.
Excerpt from a March 2, 2007 DemocracyNow interview:
So I came back to see him a few weeks later and by that time we were bombing in Afghanistan. I said “Are we still going to war with Iraq?” and he said, “Oh, it’s worse than that”, he reached over on his desk, picked a piece of paper and he said:
“I just got this down from upstairs today (meaning secretary of defense office) today. This is a memo that describes how we’re going take out 7 countries in 5 years, starting with Iraq and then Syria, Lebanon, Libya, Somalia, Sudan and finishing of Iran.”
– Wesley Clark, Retired 4-Star General and Supreme Allied Commander Europe of NATO from 1997 to 2000
Let’s take a look at the events in the past decade and see if you see a pattern.
In Libya, Gaddafi was in the process of organizing a block of African countries to create a gold-based currency called the “dinar” which they intended to use to replace the dollar in that region. U.S. and NATO forces helped destabilize and topple the Libyan government in 2011. And after taking control of the region, U.S. armed rebels executed Gaddafi in cold blood and immediately setup the Libyan Central Bank.
Iran has been actively campaigning to pull oil sales off the dollar for some time now and it has recently secured agreements to begin trading it’s oil in exchange for gold. In response, the U.S. government with mainstream media assistance has been attempting to build international support for military strikes on the pretext of preventing Iran from building a nuclear weapon. In the meantime they established sanctions which U.S. officials openly admit are aimed at causing a collapse of Iranian economy.
Syria is Iran’s closest ally and they’re bound by mutual defense agreements. This country is currently in process of being destabilized with covert assistance from NATO. And though Russia and China have warned the United States not to get involved, the White House has made statements within the past month indicating that they’re considering military intervention. It should be clear that military intervention in Syria and Iran isn’t being considered, it’s a forgone conclusion, just as it was in Iraq and Libya.
World War 3: a calculated risk to preserve the petrodollar
The U.S. is actively working to create the context which gives them diplomatic cover to do what they already have planned. The motive for these invasions and covert actions becomes clear when we look at them in full context and connect the dots.
Those who control the United States understand that even if a few countries begin to sell their oil in another currency it will set off a chain reaction and the dollar will collapse. They understand that there’s absolutely nothing else holding up the value of the dollar at this point, and so does the rest of the world.
But rather than accepting the fact that the dollar is nearing the end of it’s lifespan, the powers that be have made a calculated gambit. They have decided to use the brute force of the U.S. military to crush each and every resistant state in the Middle East and Africa.
That in itself would be bad enough, but what you need to understand is that this is not going to end with Iran. China and Russia have stated publicly and on no uncertain terms that they will not tolerate an attack on Iran or Syria. Iran is one of their key allies, one of the last in independent oil producers in the region. And they understand that if Iran falls, then they will have no way to escape the dollar without going to war. And yet, the United States is pushing forward in spite of the warnings.
What we’re witnessing here is a trajectory that leads straight to the unthinkable. It’s a trajectory that was mapped out years ago, in full awareness of the human consequences.
Who Is Pulling The Strings?
But who was it that put on this course? What kind of psychopath is willing to intentionally set off a global conflict that would lead to millions of deaths, just to protect the value of a paper currency.
It obviously isn’t the president. The decision to invade Libya, Syria and Iran was made long before Obama had risen to the national spotlight and yet he’s carrying out his duty just like the puppets that preceded him. So who is it that pulls the strings?
Often the best answer to questions like this are found by asking another question. “Cui bono”. Who benefits?
Obviously those who have the power to print the dollar out of thin air, have the most to lose if the dollar was to fall. Since 1913, that power has been held by the Federal Reserve.
The Federal Reserve is a private entity, owned by a conglomerate of the most powerful banks in the world. And the men who control those banks are the ones who pull the strings. To them, this is just a game. Your life and the lives of those you love are just pawns on their chess board. And like a spoiled four year old who tips the board on to the floor when he starts to lose, the powers that be are willing to start World War Three to keep control of the global financial system.
Remember that when these wars extend and accelerate. Remember that when your son or your neighbors son comes back home in flag draped coffin. Remember that when the point the finger at the new boogeyman. Because the mad men who are running this show will take this as far as you will allow them to.
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