The Downfall of the Petrodollar System Is the End of US World Dominance
Saudi Arabia ended it's 50-year agreement with the US on June 9th and with it the vice grip the US has on the world economy ends
Big shifts often begin quietly. They don’t announce themselves with a bang. Instead, headlines, largely ignored by the general public, point to monumental shifts in the mechanics of the world.
The decline of US world leadership has not announced itself with a loud bang. It has been quietly happening in the background for quite some time.
The latest step on this downward path is the end of the agreement with Saudi Arabia to sell its oil exclusively for US dollars.
For the last 80 years, the world has accepted the US dollar as the lead currency. The basis of international trade. Most of us have forgotten that it wasn’t always like this.
Before the US dollar, the UK pound was the leading currency. But empires rise and fall.
In 1944 The US dollar replaced the pound as the world's primary reserve currency. This was cemented in the Bretton Woods Agreement of 1944. It replaced the British Pound after two World Wars had caused devastating damage to the British economy, and the United Kingdom's gold reserves had been depleted.
This was the first step to establish the US financial grip on the economies of the world. It was followed by the establishment of the International Monetary Fund (IMF) in 1945 which was tasked with monitoring and controlling exchange rates.
But the genius strike to achieve world domination was the establishment of the dollar as the singular currency for the trade of petrol in 1972.
Henceforth, any country interested in being part of modern civilization, anyone who wanted to drive a car or use any product made of petrochemicals, became a puppet of US goodwill. This was the birth of the dependence of the oil-producing countries and the world on the petrodollar.
The petrodollar made sure that while the Western countries profited from the steady supply of crude oils, the oil-producing countries had to sell their oil unrefined. They got more money for crude oil than if they processed it inside their own countries.
The ramifications of this policy can be seen in countries such as Nigeria, which, despite being one of the largest oil producers, suffers from frequent gas shortages and is unable to provide its own population with a continuous supply of gasoline.
Countries unwilling to bend to the rule of the dollar were quickly forced into submission. There’s even a name for this. Petrodollar Warfare. The term was coined by William R. Clark, who wrote a book with the same title.
It shows the international use of the US dollar for oil transactions as economic imperialism and a major hidden driver of world politics.
In countries that weren’t as compliant as the US would have liked, such as Iraq, Iran and Venezuela, violent military intervention made sure that the system remained in place.
Saudi Arabia chose a different, more lucrative approach than these countries. In 1974, they signed a 50-year security agreement with the US.
It ensured that both countries would economically benefit from the trade of Saudi Arabian petrol. And that Saudi Arabia would not come into the crosshairs of US military intervention.
This agreement, signed on June 8, 1944, ended last Sunday. And Saudi Arabia decided not to extend it.
Few media outlets have chosen to report on this historic event.
But it indicates that the United States has lost it’s status as the “leader of the free world.” The Saudis know that the US has overextended their military resources on pointless imperialistic interventions and no longer holds the power to force them to sell their petrol in one currency only.
The US is weaker than ever. Other forces are on the rise.
The BRIC states are stronger than ever. Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates joined BRICS as full members
I’m certain that this is one of the big steps in America’s economic decline. What do you think?