America’s Petrodollar Crisis

 Posted by on October 29, 2012  I. M. Citizen
Oct 292012

Did you know an organized rebellion against the dollar is underway? It’s true. Investors are walking away from US bonds. They used to pour money into America but there’s growing fear America cannot honor its obligations. So can you blame them?

If you think the world is populated with fools you are wrong. Those outside America know our credit rating was down-graded. They see America carrying a $16 trillion national debt. They know Obama has had four consecutive years of $1 trillion deficits. They hear about city after city declaring bankruptcy. They realize, perhaps more than the vast majority of American citizens, that stimulus packages, bailouts and quantitative easing are really just delay tactics — fake solutions — that will only worsen our problems. The international community understands all this and, candidly, they seem to be waving goodbye.

Many people believe the American standard of living is because we make and export great products like cars, televisions, furniture or cellphones. This is false. It is a lie perpetuated by the ruling elite and promoted by the propaganda press they own. America’s high-brow culture is derived from the petrodollar system.

The petrodollar system requires all countries to purchase oil with dollars. Native currencies like the lira, franc or rupee are not acceptable. They must be converted to dollars. So, because most of the world needs oil, most of the world needs dollars. But converting currency is a hassle. The better way is to sell products directly to America.

Simplified, what is happening is the Federal Reserve prints vast sheets of money to be used by American consumers to purchase foreign goods. These transactions bring the foreign product into America and send the dollars to the foreign countries. These countries then use the dollars to purchase oil. And there’s gravy. Remember, these countries must buy oil to maintain their society and they must use dollars to purchase it. As a result, their products are priced low to make sure Americans buy them. This is why we are the world’s largest importer. Basically, Japan swaps stereos or cars with America – on the cheap – to obtain bags of dollars so they can buy oil.

And because of all these inexpensive imports, America stopped making stuff. Our major product is printed paper –the dollar. Sure, right now the world is forced to value the paper because it must be used to buy oil. But take that requirement out of the picture and you see the problem. Who would swap a car for a bag of worthless paper? Unfortunately, that is exactly what is starting to happen. Iran, China, Russia and India, to name a few, are rejecting the petrodollar system. Not good. America must have petrodollar transactions or it falls hard.

So crucial is the petrodollar system to America that she will fight to maintain it. Do you really think we are endlessly entangled in the Middle East because we want to promote democracy? Or nation-build? Please, leave the naivety at the door.

It is now common knowledge that Iraq didn’t possess weapons of mass destruction. So why did we do Saddam Hussein? Most likely, it was because in late 2000, he started doing oil deals outside the petrodollar system. If true, the accusation that Iraq had weapons of mass destruction was a government promoted cover story to whip up blood lust in Americans. Nothing more.

Last year, Muammar Gaddafi got taken down in Libya. It turns out, he was a long promoter of skirting the petrodollar system. Is this just coincidence?

And now we have Iran.

Our government and the propaganda press say Iran has nuclear bomb ambitions. Do they? Or is it a cover story? You and I just don’t know the truth. But we do know Iran is side-stepping the petrodollar system. If America attacked Iraq and orchestrated Gaddaffi’s fall in Libya to protect petrodollars, is it a reach to think similar action against Iran is imminent? And as you know, both Obama and Romney have been talking tough about Iran.

But Iran has oil customers that are big players in the world. They are happy and, more importantly, they are needy. Will China or Russia really allow America to take on Iran and interrupt their flow of oil? And if one or both step in for Iran, what is America’s next move?

The collapse of the dollar would grind America to a halt. The power elite and our leaders know all this, even as they keep us in the dark. Why did our government buy some 450 million rounds of ammo earlier this year? Is it really for training? Or fighting terror? Or do they anticipate prolonged civil unrest when the government stops paying welfare, social security and all other entitlements as we painfully transition to a far, far lower standard of living?

Why did the government approach the largest banks and require they develop a plan to avoid collapse? Why are military exercises being conducted in American cities? Why are there hundreds and hundreds of FEMA camps popping up all over the country? Is it because they anticipate lots of natural disasters? Or is it because they anticipate the need for places to cage the unruly? Or, if you believe in friendly government, places to manage the homeless and destitute?

Why have thousands and thousands of caskets been purchased? Is it because the government is going to offer free burial services as part of Obama-care? Or is it more likely they anticipate that the collapse of the dollar will result in calamities (shortages of food, water, medicine, energy, etc.) that will lead to a large number of deaths?

The bitter reality is that the sanctions against Iran are probably speeding up the collapse of the dollar. Unlike decades past, now much of the world must have oil. When America demands embargoes, countries are put in a very uncomfortable position — defy Washington or risk hurting themselves. Add to this the obvious fact that our enemies have been waiting patiently for an opportunity to take on the neighborhood bully.

With countries side-stepping the petrodollar system, it seems our enemies have little fear of American muscle. And investors are walking away from US bonds, too. And why shouldn’t they? The American economy has been dead for half a decade. Worse, since the 1970′s too many of our leaders and citizens demand more and more but we produce less and less.

The world knows we have made extremely poor political decisions for the last few decades and if not for the petrodollar system, we would be a barter society by now. And make no mistake, there are forces outside — and inside — this country that are trying to make that happen.


  2 Responses to “America’s Petrodollar Crisis”

  1. [...] outside of the West—China, Russia, India, Iran and others – have decided to do oil transactions outside the petro-dollar system. This is significant. America’s economy and the bankster’s profits are directly tied [...]

  2. [...] outside of the West—China, Russia, India, Iran and others – have decided to do oil transactions outside the petro-dollar system. This is significant. America’s economy and the bankster’s profits are directly tied to [...]

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