We live in a political world, | Love don't have any place. | We're living in times where men commit crimes | And crime don't have a face.
Following on my House of Cards post below, I found Tom Feeley posting a Kaleem Hussain (of the Independent Centre for Strategic Studies and Analysis) interview with Krassimir Petrov, author of The Proposed Iranian Oil Bourse.
No matter what I read—and answer—to the contrary, Petrov and Clark continue to make eminent sense.
In August 15, 1971, The U.S. Government had defaulted on its payments when foreigners demanded payment for their dollars in gold. The popular “spin” at the time was that the U.S. was severing the link between the dollar and gold, in reality the denial to pay back in gold was an act of bankruptcy by the U.S. Government in order to foster the aims of what it had declared as its empire. It had extracted an enormous amount of economic goods from the rest of the world, with no intention or ability to return those goods, and the world was powerless to respond- the world was taxed and it could not do anything about it. At that juncture, in order to sustain the American empire and continue to tax the world, the U.S. had to force the rest of the world to hold ever depreciating American dollars in exchange for economic goods. It had to give the rest of the world a viable reason to hold these ever depreciating dollars. The reason it gave was oil.
[...]
In 1971, as it became clearer and clearer that the U.S Government would not be able to buy back its dollars in gold, it made in 1972-73 an iron-clad arrangement with Saudi Arabia to support the power of the House of Saud in exchange for accepting only U.S. dollars for its oil. The rest of OPEC was to follow suit and also accept only dollars. Because the world had to buy oil from the Arab oil countries, it had the reason to hold dollars as payment for oil. Because the world needed ever increasing quantities of oil at ever increasing oil prices, the world's demand for dollars could only increase. Even though dollars could no longer be exchanged for gold, they were now exchangeable for oil.
The economic essence of this arrangement was that the dollar was now backed by oil. As long as that was the case, the world had to accumulate increasing amounts of dollars, because they needed those dollars to buy oil. As long as the dollar was the only acceptable payment for oil, its dominance in the world was assured, and the American empire could continue to tax the rest of the world. If, for any reason, the dollar lost its oil backing, the American empire would cease to exist. Thus, imperial survival dictated that oil be sold only for dollars. It also dictated that oil reserves were spread around various sovereign states that weren't strong enough, politically or militarily, to demand payment for oil in something else. If someone demanded a different payment, he had to be convinced, either by political pressure or military means, to change his mind.
[...]
In the past 5 years, the dollar has been devalued in terms of gold by more than fifty percent. The above analysis has shown, that if anyone does challenge the status quo in terms of the link between the dollar and oil e.g. Saddam Hussein (2000), the powers that be will use all economic and military means to remove that challenge (regime change) at whatever costs, including at times illegitimate authorisation as in Iraq. In 2001, Venezuela’s ambassador to Russia spoke of Venezuela switching to the Euro for all their oil sales. This was immediately thwarted with economic pressure from the U.S.. The U.S. foreign policy in recent years has heightened tensions and increased resentment amongst majority Muslim nations around the world. This does not hold well when it comes to U.S. credibility and diplomacy in the international arena. R. Paul states that the $ 2.trillion never ending war must be paid for one way or another. Dollar hegemony provides the vehicle to do just that.
We live in a political world. | The one we can see and can feel | But there's no one to check, it's all a stacked deck, | We all know for sure that it's real.
Bob Dylan | Political World
