Difference between revisions of "Petrodollar"

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|description=The selling of the world's oil in U.S. dollars has been the backbone of U.S. dollar hegemony since the U.S. unilaterally terminated the rights of foreign central banks to convert dollars to gold in 1971.
 
|description=The selling of the world's oil in U.S. dollars has been the backbone of U.S. dollar hegemony since the U.S. unilaterally terminated the rights of foreign central banks to convert dollars to gold in 1971.
 
|start=1974
 
|start=1974
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|interests=Oil
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|constitutes=Money/Creation, Money/Fractional-reserve_banking, Cantillon_effect
 
}}
 
}}
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'''Petrodollars''' have been defined as oil revenues denominated in U.S. dollars<ref name=oweiss1974>Oweiss, Ibrahim M. (1974) Petrodollars: Problems and Prospects, Address before the Conference on The World Monetary Crisis, Arden House, Harriman Campus, Columbia University http://faculty.georgetown.edu/imo3/petrod/define.htm</ref>.
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'''Petrodollars''' have been defined as oil revenues denominated in U.S. dollars<ref name=oweiss1974>Oweiss, Ibrahim M. (1974) Petrodollars: Problems and Prospects, Address before the Conference on The World Monetary Crisis, Arden House, Harriman Campus, Columbia University http://faculty.georgetown.edu/imo3/petrod/define.htm</ref>. Dollars are required to buy oil because of a US policy of using its influence over oil exporting countries to demand that they price it in [[US dollars]].  
  
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Consequently to buy oil, dollars are needed. On a large scale exchanging local currency for dollars is too costly. The prefered way for countries to get dollars is therefore to export goods and services for dollars - or to get a loan from banks who hold enough dollar denominated assets, ie. the IMF or other big western banks.  
+
On the other hand the term "revenues" includes surpluses on such a scale that the oil producing countries could buy up a large proportion of Western assets. The term '''Petrodollar''' refers also to the management of these revenues. [[Walter Levy]], speaking at the [[1973 Bilderberg Conference]], stated that "Serious problems would be caused by unprecedented foreign exchange accumulations of countries such as [[Saudi Arabia]] and [[Abu Dhabi]]"<ref name=CoW>Engdahl, F.W. (2004) A Century of War: Anglo-American Oil Politics and the New World Order. London: Pluto ISBN 0-7453-2309-X, p.143.</ref>.{{#tag:ref|This view is also expressed by the {{ccm}} today when finding that countries like [[Saudi Arabia]] are the ''culprits'' responsible for global ''imbalances'' when running surpluses. Rejecting advice on how to handle surpluses may be interpreted as dwindling power of the dollar empire. See ie. ''[[The Economist]]'', Apr 26th 2012 "[http://www.economist.com/node/21553424 Petrodollar profusion - Oil exporters are the main drivers of global imbalances". |group=note}}
  
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On the other hand the term "revenues" includes surpluses on such a scale that the oil producing countries could buy up a large proportion of Western assets. The term '''Petrodollar''' refers also to the management of these revenues. [[Walter Levy]], speaker at the [[Bilderberg Conference]] 1973 made clear that "Serious problems would be caused by unprecedented foreign exchange accumulations of countries such as [[Saudi Arabia]] and [[Abu Dhabi]]"<ref name=CoW>Engdahl, F.W. (2004) A Century of War: Anglo-American Oil Politics and the New World Order. London: Pluto ISBN 0-7453-2309-X, p.143.</ref>.{{#tag:ref|
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{{SMWQ
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This view is also expressed by the {{ccm}} today when finding that countries like Saudi Arabia are the '''culprits''' responsible for global '''imbalances''' when running surpluses. Rejecting advice on how to handle surpluses may be interpreted as dwindling power of the dollar empire. See ie. The Economist, Apr 26th 2012 "[http://www.economist.com/node/21553424 Petrodollar profusion - Oil exporters are the main drivers of global imbalances".
+
|text=These [[OPEC]] countries were advised on how to invest their surpluses by Western investment bankers and subsequently signed contracts with the U.S. on [[military bases]], large [[arms deals]], military training and cooperation on governmental and economic levels. Their governments' dependency on U.S. specialists remains unchanged to the present day.
−
|group=note}}
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|authors=Christopher M. Blanchard
−
+
|date=2014
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These [[OPEC]] countries were advised on how to invest their surpluses by Western investment bankers and subsequently signed contracts with the U.S. on military bases, large arms deals, military training and cooperation on governmental and economic levels. Their governments' dependency on U.S. specialists remains unchanged to the present day (Blanchard 2014)
+
|source_name=Saudi Arabia: Background and U.S. Relations. Congressional Research Service 7-5700  
−
<ref>Christopher M. Blanchard (2014) Saudi Arabia: Background and U.S. Relations. Congressional Research Service 7-5700 http://www.crs.gov RL33533</ref>.
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|source_URL=http://www.crs.gov RL33533
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|subjects=OPEC, Petrodollar, arms deals
 +
}}
  
 
==Overview==
 
==Overview==
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Less mentioned by the {{ccm}} is the fact that part of the agreements was the recycling of the oil producing countries' surpluses into U.S. dept securities held at Western banks. Restrictions on cross-border capital flows or investments were lifted.{{#tag:ref|These restrictions were a key component of the Bretton Woods agreement. "The capital controls were necessary otherwise speculators could have had a field day by betting that a certain currency would go down by selling it off against the US dollar and thereby forcing it to go down purely from their speculative activity. Large financial firms with access to lots of US dollars could therefore force a foreign currency of a weaker country to collapse as they desired" (Smithy 2003b) <ref name=WOM5> Smithy (2003b) WIZARDS OF MONEY - 5. Monetary Terrorism, http://www.robinupton.com/people/WizardsOfMoney/</ref>.  
 
Less mentioned by the {{ccm}} is the fact that part of the agreements was the recycling of the oil producing countries' surpluses into U.S. dept securities held at Western banks. Restrictions on cross-border capital flows or investments were lifted.{{#tag:ref|These restrictions were a key component of the Bretton Woods agreement. "The capital controls were necessary otherwise speculators could have had a field day by betting that a certain currency would go down by selling it off against the US dollar and thereby forcing it to go down purely from their speculative activity. Large financial firms with access to lots of US dollars could therefore force a foreign currency of a weaker country to collapse as they desired" (Smithy 2003b) <ref name=WOM5> Smithy (2003b) WIZARDS OF MONEY - 5. Monetary Terrorism, http://www.robinupton.com/people/WizardsOfMoney/</ref>.  
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Exactly these currency attacks occurred later when the petrodollar recycling scheme was in place. Examples include the [[Mexican Peso crisis]] of 1994-95, the [[Asian financial crisis]] of the late [[1990s]] and the [[Russian ruble crisis]].|group=note}}
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 +
Exactly these currency attacks occurred later when the petrodollar recycling scheme was in place. Examples include the [[Mexican Peso crisis]] of 1994-95, the [[Asian financial crisis]] of the late [[1990s]] and the [[Russian ruble crisis]].|group=note}}
  
 
Until 1975 the other OPEC countries agreed to similar deals.
 
Until 1975 the other OPEC countries agreed to similar deals.
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==Containment of Oil Exporting Governments==
 
==Containment of Oil Exporting Governments==
  
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Osama bin Laden arose from internal opposition to the House of Saud. In the view of the Arab clergy and public these westernized rulers were "oppressive and corrupt political regimes",  forced on Muslims by America, disrespecting religion and selling Arabian autonomy for dollars (Clark 2005, p.194)
+
[[Osama bin Laden]] arose from internal opposition to the House of Saud. In the view of the Arab clergy and public these westernized rulers were "oppressive and corrupt political regimes",  forced on Muslims by America, disrespecting religion and selling Arabian autonomy for dollars (Clark 2005, p.194)<ref name=clark2005/>.
−
<ref name=clark2005/>.
 
  
 
When reading through the declassified Report of the [[Comptroller General of the U.S]] on the [[U.S.-Saudi Joint Commission on Economic Cooperation]]
 
When reading through the declassified Report of the [[Comptroller General of the U.S]] on the [[U.S.-Saudi Joint Commission on Economic Cooperation]]
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{{Q|"the placement of petrodollar surpluses [...] in the United States may be regarded politically as 'hostage capital'. In the event of a major political conflict between the United States and an oil-exporting nation, the former with all its military power can confiscate or freeze these assets or otherwise limit their use. [...] (Oweiss 1974)<ref name=oweiss1974/>}}
 
{{Q|"the placement of petrodollar surpluses [...] in the United States may be regarded politically as 'hostage capital'. In the event of a major political conflict between the United States and an oil-exporting nation, the former with all its military power can confiscate or freeze these assets or otherwise limit their use. [...] (Oweiss 1974)<ref name=oweiss1974/>}}
  
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[[David Spiro]] notes that 70 percent of all Saudi assets in the United States were being held in a New York Fed account.<ref>Spiro, David E. (1999). The hidden hand of American hegemony: petrodollar recycling and international markets. Ithaca, NY : Cornell University Press.</ref>{{#tag:ref|
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[[David Spiro]] notes that 70 percent of all Saudi assets in the United States were being held in a [[New York Fed]] account.<ref>Spiro, David E. (1999). The hidden hand of American hegemony: petrodollar recycling and international markets. Ithaca, NY : Cornell University Press.</ref>{{#tag:ref|
 
If OECs purchase new US Treasury securities with petrodollars they give away their oil for the promise to be payed later,  
 
If OECs purchase new US Treasury securities with petrodollars they give away their oil for the promise to be payed later,  
 
while at the same time giving Western banks the power to increase the money supply based on these assets.  
 
while at the same time giving Western banks the power to increase the money supply based on these assets.  
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==The Unfree Market==
 
==The Unfree Market==
  
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{{Q|"Money supply and debt have exploded in the absence of gold convertibility [...] Today's money is not backed by gold. It is now backed by nothing at all, except our trust in the monetary system." - Smithy (2003a) <ref name=WOM1 /> }}  
+
{{SMWQ
 +
|subjects=fiat currency, gold
 +
|text=Money supply and debt have exploded in the absence of gold convertibility [...] Today's money is not backed by gold. It is now backed by nothing at all, except our trust in the monetary system.
 +
|date=2003
 +
|authors=Smithy
 +
|ref_name=WOM1
 +
}}
  
 
This "trust" itself is backed by coercion (the world's dependency on oil) and ultimately by the U.S military (Goff 2004b)
 
This "trust" itself is backed by coercion (the world's dependency on oil) and ultimately by the U.S military (Goff 2004b)
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<ref name=goff2004b>Stan Goff. "Persian Peril", From The Wilderness Publications, 2004, accessed Nov. 14, 2014, http://www.fromthewilderness.com/free/ww3/080904_persian_peril.shtml</ref>.
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<ref name=goff2004b>Stan Goff. "Persian Peril", [[From The Wilderness]] Publications, 2004, accessed Nov. 14, 2014, http://www.fromthewilderness.com/free/ww3/080904_persian_peril.shtml</ref>.
  
 
The "explosion" of the money supply led to various financial bubbles and increased speculative activity ultimatively culminating in the [[banking crisis of 2007/08]]. In the center of all this were the big international banks who received recycled petrodollars and used them to create loans and financial instruments for speculation. They grew unbelieveable powerful with this scheme knowing fully well they would be bailed out if something went wrong - a distortion of the free market called '''[[Moral Hazard]]''' in risk management. No wonder 90 percent of the core of the network of global corporate control belongs to the financial sector today (Vitali et.al. (2011)  
 
The "explosion" of the money supply led to various financial bubbles and increased speculative activity ultimatively culminating in the [[banking crisis of 2007/08]]. In the center of all this were the big international banks who received recycled petrodollars and used them to create loans and financial instruments for speculation. They grew unbelieveable powerful with this scheme knowing fully well they would be bailed out if something went wrong - a distortion of the free market called '''[[Moral Hazard]]''' in risk management. No wonder 90 percent of the core of the network of global corporate control belongs to the financial sector today (Vitali et.al. (2011)  
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|text=Fiat money, if you like, is backed by men with guns.
 
|text=Fiat money, if you like, is backed by men with guns.
 
|authors=Paul Krugman
 
|authors=Paul Krugman
 +
|source_URL=http://www.youtube.com/watch?v=RZLdoWrNqHk
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|date=2015
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|source_name=Contra Krugman
 
}}  
 
}}  
 
The effect of rising oil prices on less-developed countries was devastating. In desperate need for oil they took out loans from Western banks, under which many defaulted when the FED raised interest rates. The IMF who promoted these loans then went on to prescribe austerity measures and bailed out troubled Western banks. The resulting weakness of the LDC's economies and the introduction of [[Moral Hazard]] by the IMF would be further exploited by currency speculators. The absence of capital controls was a necessary precondition for this form of '''monetary "terrorism"''' (Smithy 2003b)<ref name=WOM5 />, which led to attacks on, and collapse of, Mexican, Asian and Latin American currencies:  
 
The effect of rising oil prices on less-developed countries was devastating. In desperate need for oil they took out loans from Western banks, under which many defaulted when the FED raised interest rates. The IMF who promoted these loans then went on to prescribe austerity measures and bailed out troubled Western banks. The resulting weakness of the LDC's economies and the introduction of [[Moral Hazard]] by the IMF would be further exploited by currency speculators. The absence of capital controls was a necessary precondition for this form of '''monetary "terrorism"''' (Smithy 2003b)<ref name=WOM5 />, which led to attacks on, and collapse of, Mexican, Asian and Latin American currencies:  
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==Petrodollar Wars==
 
==Petrodollar Wars==
−
{{Q|"'''I am saddened that it is politically inconvenient to acknowledge what everyone knows: the [[Iraq war]] is largely about oil.'''" - [[Alan Greenspan]] (2007) [http://en.wikipedia.org/wiki/The_Age_of_Turbulence The Age of Turbulence]}}
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{{SMWQ
 +
|text=I am saddened that it is politically inconvenient to acknowledge what everyone knows: the [[Iraq war]] is largely about oil.
 +
|authors=Alan Greenspan
 +
|date=2007
 +
|subjects=Iraq War, oil, casus belli
 +
|source_name=The Age of Turbulence
 +
}}
  
 
News outlets in mid-2000-2002 carried articles about Saddam's efforts to sell oil on markets exclusively in Euros.
 
News outlets in mid-2000-2002 carried articles about Saddam's efforts to sell oil on markets exclusively in Euros.
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==Outlook==
 
==Outlook==
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The global medium of exchange as we know it is also a medium of social control (Smithy 2003a) <ref name=WOM1/>.
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The global medium of exchange as we know it is also a medium of [[social control]] (Smithy 2003a) <ref name=WOM1/>. For most of us it is difficult to imagine that it could come without coercion; such a switch in point of view, however, is proposed by [[B. Lietaer]] in his book "The Future of Money: Beyond Greed and Scarcity" (Lietaer 2001)<ref>Lietaer, Bernard (2001) [http://www.transaction.net/money/book/index.html "The Future of Money: Beyond Greed and Scarcity"]Random House. ISBN </ref>. His proposal is based on a diversity of freely associated local and national currencies designed for special purposes as well as a global reference, the "Terra". He argues this diversity creates resilience - a feature badly needed in times of monetary monoculture.
 +
{{SMWDocs}}
  
−
For most of us it is difficult to imagine that it could come without coercion; such a switch in point of view, however, is proposed by [[B. Lietaer]] in his book "The Future of Money: Beyond Greed and Scarcity" (Lietaer 2001)
 
−
<ref>Lietaer, Bernard (2001) [http://www.transaction.net/money/book/index.html "The Future of Money: Beyond Greed and Scarcity"]Random House. ISBN </ref>.
 
−
 
−
His proposal is based on a diversity of freely associated local and national currencies designed for special purposes as well as a global reference, the "Terra". He argues this diversity creates resilience - a feature badly needed in times of monetary monoculture.
 
−
{{SMWDocs}}
 
 
==Footnotes==
 
==Footnotes==
 
{{reflist|group=note|2}}
 
{{reflist|group=note|2}}

Revision as of 17:53, 14 April 2022

Concept.png Petrodollar 
(Money/Creation,  Money/Fractional-reserve_banking,  Cantillon_effect)Rdf-entity.pngRdf-icon.png
Petrodollargun.jpg
Typecommercial
Start1974
Interest ofUS/Federal Reserve
Subpage(s)•Petrodollar/Recycling
The selling of the world's oil in U.S. dollars has been the backbone of U.S. dollar hegemony since the U.S. unilaterally terminated the rights of foreign central banks to convert dollars to gold in 1971.

Petrodollars have been defined as oil revenues denominated in U.S. dollars[1]. Dollars are required to buy oil because of a US policy of using its influence over oil exporting countries to demand that they price it in US dollars.

On the other hand the term "revenues" includes surpluses on such a scale that the oil producing countries could buy up a large proportion of Western assets. The term Petrodollar refers also to the management of these revenues. Walter Levy, speaking at the 1973 Bilderberg Conference, stated that "Serious problems would be caused by unprecedented foreign exchange accumulations of countries such as Saudi Arabia and Abu Dhabi"[2].[note 1]

“These OPEC countries were advised on how to invest their surpluses by Western investment bankers and subsequently signed contracts with the U.S. on military bases, large arms deals, military training and cooperation on governmental and economic levels. Their governments' dependency on U.S. specialists remains unchanged to the present day.”
Christopher M. Blanchard (2014)  [3]

Overview

A video by James Corbett

In 1947, by the Bretton Woods agreements, the US dollar became the world's reserve currency. To establish trust in the dollar the exchange rate to gold was fixed at 35$/ounce. However, the U.S. Federal Reserve increased the money supply by 340% from 1947 to 1971 while decreasing its gold reserves over the same period. Since 1969 foreign countries began to understand that this was unsustainable to exchange their dollars for gold.

In 1971, after excessive spending on the Vietnam War the U.S. unilaterally terminated the rights of foreign central banks to convert dollars to gold. The end of Bretton Woods was accompanied by a devaluation of the dollar vs. gold, a stock market crash, global recession and the breakdown of the international dollar-pegged monetary system. The U.S. went from oil export to import after its own production peaked. OPEC began discussing the viability of pricing oil trades based on a basket of currencies.

In the face of these dramatic events which threatened American military and monetary supremacy (the two pillars of the empire) the Nixon administration began high-level talks with Saudi Arabia to unilaterally price international oil sales in dollars only - despite US assurances to its European and Japanese allies that such a unique monetary/geopolitical arrangement would not transpire.[4]

Less mentioned by the commercially-controlled media is the fact that part of the agreements was the recycling of the oil producing countries' surpluses into U.S. dept securities held at Western banks. Restrictions on cross-border capital flows or investments were lifted.[note 2]

Until 1975 the other OPEC countries agreed to similar deals.

Recycling

Full article: Petrodollar/Recycling

Petrodollar recycling is the handling of the oil producing countries' surpluses. These surpluses are commonly turned into either U.S. government securities (allowing the creation of more U.S. dollars by international banks[6] which are in turn used to buy oil and other goods and services) or are spent in arms deals including payments for U.S. military bases in the Middle East.

"The process of petrodollar recycling makes it possible for commercial banks of industrialized nations, international lending institutions, and Arab banking consortia to provide financial assistance to less-developed countries (LDCs). Western Europe, Japan, and the United States buy oil from oil-exporting countries (OECs). LDCs pay for oil imports and other foreign goods and services with money borrowed from Western commercial banks. The process of recycling is complete when those commercial banks and institutions obtain cash and investments from OECs" (Oweiss 1974)[1].[note 3]

It is easy to see that "commercial banks of industrialized nations, international lending institutions [IMF], and Arab banking consortia" were the big winners of this scheme.

Petrodollars were also recycled directly by an agreement between the U.S. Treasury and the Saudi Arabian Monetary Agency (SAMA), whose mission was

"to establish a new relationship through the Federal Reserve Bank of New York with the [U.S.] Treasury borrowing operation. Under this arrangement, SAMA will purchase new US Treasury securities with maturities of at least one year" (Bennet 1975)[7].

It is noteworthy that under this agreement the Saudis accept the promise to be payed later, while at the same time increasing the U.S. (military) budget for that amount. A high oil price therefore leads to rising demand for U.S. dollars on a global scale without negatively affecting key parts of the U.S. economy. [note 4]

In addition, petrodollars were recycled into banks managed by Saudi/U.S joint ventures used to finance transnational black ops, ie. Riggs Bank and BCCI from 1976 onwards. The Saudi intelligence personnel running these banks have been named as Saudi Arabia's most important financiers of Osama bin Laden and his Al Qaeda group (see ie. v.d. Reijden 2013 [8] , Scott 2014 [9] , Komisar 2007 [10] ).

Containment of Oil Exporting Governments

Osama bin Laden arose from internal opposition to the House of Saud. In the view of the Arab clergy and public these westernized rulers were "oppressive and corrupt political regimes", forced on Muslims by America, disrespecting religion and selling Arabian autonomy for dollars (Clark 2005, p.194)[4].

When reading through the declassified Report of the Comptroller General of the U.S on the U.S.-Saudi Joint Commission on Economic Cooperation [11] the dimension of this 'joint venture' becomes visible. From military to finance to construction to advice on how to run a 'modern' government: it reads like a gigantic takeover by U.S. corporations. Today Saudi Arabia can not operate without its 9 million foreign professionals. Other OECD countries have similar deals.

The internal opposition was driven by the conflict with Israel. OECD's governments seem to acquiesce to the occupation of Arab land since the 1967 Six-day War. This and the rising military presence of the U.S. in the region is seen as a permanent humiliation. Beginning with the late 70s Bin Laden received large funds from influential Saudi Arabians which might have helped calming him down, however, since 2003 some 90 people were killed by suicide bombings and kidnappings. One could argue, the Arab-Israeli conflict acts like a dial to drive up pressure on the House of Saud and to motivate acts of "terrorism". (Goff 2004a [12], Komisar 2007 [10]).

An example of how this dial works is the 'oil crisis' of 1973. The perception of shortage created by the commercially-controlled media bamboozled the Western public to accept hardship in the form of higher oil prices and recession and to distract from the power grab that came with the recycling scheme. To announce an 'embargo' - in the face of the provocative, open support of Israel in the Yom Kippur War by the U.S. - was one of the few options available to Saudi King Faisal to calm down public rage and to save his throne (Bichler et. al. 1989c, p.15f) [13].

Financial Containment

On the side of oil exporting nations

"the placement of petrodollar surpluses [...] in the United States may be regarded politically as 'hostage capital'. In the event of a major political conflict between the United States and an oil-exporting nation, the former with all its military power can confiscate or freeze these assets or otherwise limit their use. [...] (Oweiss 1974)[1]

David Spiro notes that 70 percent of all Saudi assets in the United States were being held in a New York Fed account.[14][note 5]

As of 2004 "Sixty percent of Saudi foreign investment is in the United States, and the Saudi Royals are heavily invested in the US financial sector. This investment is growing, rising from a Saudi-to-US FDI in 1998 of $2.7 billion to $4.4 billion by 2001 when the World Trade Center fell. Any blow to the US financial establishment reverberates through Saudi Arabia, and this heavy Saudi investment significantly disinclines either country to disentangle with the other. It also reinforces dollar hegemony with the petrodollar" (Goff 2004a) [12]

The Saudi establishment literally sits in the same boat with the U.S's.

"It follows, therefore, that governments placing their petrodollar surpluses in the United States may lose part of their economic and political independence. Consequently, the more petrodollar surpluses are placed in the United States by a certain oil-exporting nation, the less independent such a nation becomes." (Oweiss 1974)[1]

While freezing assets to apply pressure seems not necessary in the case of Saudi Arabia due to common interests of its establishment and the shaky position of the ruling kingdom, the U.S. government resorted to such weapons twice in the 1980s against Iran and Libya. In 2006 when Iran began selling oil for Yen, Renminbi, Rubles and Euro its foreign assets were frozen - allegedly because of its nuclear program. [note 6]

The Unfree Market

“Money supply and debt have exploded in the absence of gold convertibility [...] Today's money is not backed by gold. It is now backed by nothing at all, except our trust in the monetary system.”
Smithy (2003)  [6]

This "trust" itself is backed by coercion (the world's dependency on oil) and ultimately by the U.S military (Goff 2004b) [17].

The "explosion" of the money supply led to various financial bubbles and increased speculative activity ultimatively culminating in the banking crisis of 2007/08. In the center of all this were the big international banks who received recycled petrodollars and used them to create loans and financial instruments for speculation. They grew unbelieveable powerful with this scheme knowing fully well they would be bailed out if something went wrong - a distortion of the free market called Moral Hazard in risk management. No wonder 90 percent of the core of the network of global corporate control belongs to the financial sector today (Vitali et.al. (2011) [18].

When oil prices quadrupled 1971-1975 the revenues of big oil, international banks and defence contractors skyrocketed in a similar dimension (Rowley et. al. 1989 [19] , Bichler et. al. 1989a [20]).

The ever increasing U.S. military budget becomes the most profitable investment opportunity - shielded from international competition - while the economic performance of Western industrial countries declines (Bichler et. al. 1989b) [21].

This led to an unprecedented concentration in the degree of monopoly, power and control over world affairs in the hands of Transnational Corporations (TNCs) - which per se are financial institutions to manage their profits - with revolving doors to politics and intelligence (Scott 2014 [9] , Vitali et.al. 2011 [18]).

The petrodollar recycling scheme gives the U.S. and western based TNCs an advantage in what is often portrayed - but in reality is not - a 'free market'. It allows the U.S. to run the largest trade deficit in world history, while the dollar "is propped up by dollar-denominated Saudi oil sales on one side and by American bullets on the other" (Goff 2004a) [12].

The Price of Oil

"Oil is not a normal commodity. No other commodity has five US navy battle groups patrolling the sea lanes to secure it. - Mark Jones[12]

Since the oil industry was first consolidated in the nineteenth century, no prolonged period of price competition has occurred. (Bichler et. al. 1989a)[20]

As vertically integrated companies, the Oil Six are engaged in all stages of production — drilling, extracting, shipping, refining and the marketing of final petroleum products. The price of crude oil forms the basis from which prices of subsequent petroleum products are determined.

High crude oil prices drive up profits of oil/armament/banking centered TNCs. Moreover more funding is available for Safari Club-like structures as the BCCI and its successor organizations from Saudi sources. As already mentioned Middle Eastern conflicts motivate these cash flows.[note 7] TNCs have learned about this correlation since the two major oil crises of 1973 and 1979 led to dramatic increases in levels of profits, while subsequent price stability during the 1975-1978 period was associated with profit stability and price declines after 1981 led to drastic reductions in profits. (Bichler et. al. 1989c)[13]

The official narrative is that in 1973 a OPEC embargo led to significant oil shortages which triggered a global recession. The embargo was presumably politically motivated to punish the U.S. for its support of Israel in the Yom Kippur War. There are several problems with this view. First, the shortfall corresponded to only 7.5% of global output and second, the embargo was lifted after 5 month without achieving any political goal (Hamilton 2011) [23].

The official counter narrative is, that further increases in the price of oil were to be expected according to standard economic theory due to inflationary pressure, col. termed the 'FED printing money' (Barsky and Kilian 2001) [24].

The problem here is, the price of crude oil was set by decree - arrived at by agreements in oligopolistic structures (Bichler et. al. 1989b)[21] - and the U.S. side was part of these structures (Scott 2014)[9].

Why is this question so important? The idea that on both sides of the Atlantic moneyed interests are playing together rather than against each other - condoning a global recession - is a dangerous one. Obviously incompatible with the official narrative of capitalist free markets, it could lead the public opinion to sway against big business' interests. The broader official narrative that there is only 'one' economy and the interest of the public magically coincides with big business' interests through employment and trickle-down effects is a basic glue that binds Western societies together. [note 8]

To ensure sufficient global demand for the dollar, however, high oil prices were - and are - essential. [note 9] Consequently - after the Saudi government had bought the first $2.5 billion U.S. treasury bills in 1974 from its oil surplus funds - the U.S. administration secretly lobbied OPEC through its puppet regime in Iran to increase prices. [note 10]

Bichler, Rowley and Nitzan (1989[13]) come to the conclusion, that "Middle Eastern wars were the instrument of oil crises rather than their cause." They see petrodollar profits as an important piece of the puzzle in the formation and power-grab of what Peter Dale Scott and others later termed a "supranational deep state".

Now that the US occupies Iraq (which is a OPEC member), it has a regular seat at OPEC meetings. As mentioned before, the power elites of key OPEC countries were entangled deep enough to act in concert even before. Peter Dale Scott mentioned at least two cases in which the price of oil was manipulated downwards: 1) in the 1980ies to bring down the Soviet Union (followed by speculation against the ruble) after Gorbachev planned big reforms towards power-to-the-people (financed by oil sales) and 2) in 2014/15 to punish Putin for his engagement in Ukraine (and possibly to weaken his oil/monetary union with China).

Dollar Hegemony

“Fiat money, if you like, is backed by men with guns.”
Paul Krugman (2015)  [28]

The effect of rising oil prices on less-developed countries was devastating. In desperate need for oil they took out loans from Western banks, under which many defaulted when the FED raised interest rates. The IMF who promoted these loans then went on to prescribe austerity measures and bailed out troubled Western banks. The resulting weakness of the LDC's economies and the introduction of Moral Hazard by the IMF would be further exploited by currency speculators. The absence of capital controls was a necessary precondition for this form of monetary "terrorism" (Smithy 2003b)[5], which led to attacks on, and collapse of, Mexican, Asian and Latin American currencies:

"The axing of the gold standard backing the US dollar led to the "floating" of most national currencies, which were no longer pegged to a gold conversion standard.

This lead to phenomenal growth in speculation against international currencies, which later led to massive economic and social crises in various countries that were speculated against. Examples include the Mexican Peso crisis of 1994-95, the Asian financial crisis of the late 1990s, followed by the Russian ruble crisis. Since the death of the gold standard and the floating of most major currencies we have seen currency speculation increase to an astonishing 98% of all international transactions. This means that "real economic" transactions account for a mere 2% of international transactions, and we truly live in the midst of a global casino. This data on currency speculation is derived from data from the Bank for International Settlements and summarized in the book "The Future of Money" by Bernard Lietaer, Century Press" (Smithy 2003b) [5].

The widespread use of the dollar can be used to threaten foreign banks, corporations and governments with sanctions. If a bank is cut off from dollar trade - as in the case of PNB Paribas - it faces severe currency exchange costs and even bankruptcy.[29]

The phony legal argument is that U.S. law may be enforced in foreign countries as well. On these grounds Eric Holder, US Attorney General imposed a $8.97bn fine on PNB Paribas and New York state banking regulator Benjamin Lawsky named 12 officials who he recommended should step down. The reason given, among others was trade with Iran (not compatibel with U.S. sanctions). More likely the case against France's BNP has something to do with the delivery to Russia of two French-produced Mistral-class helicopter carriers for $1.6bn.[30] [31]

It is noteworthy that most major banks trade with Iran, Sudan, Libya, etc. but none of them is threatened with bankrupcy. Instead their cases are settled out of court with gentlemen agreements.[32]

Obviously using the world's reserve curreny to blackmail other nations into compliance is a double-edged sword, because it pushes the drive to replace the dollar. In the words of the CEO of the French National Bank, Christian Noyer,

"Beyond this particular case [the case of PNB Paribas], rising financial risks originating from the application of American law to all dollar transactions in the whole world can push towards a diversification of reserves. BNP Paribas has given the numerous observers the opportunity to recall that there have already been certain sanctions in the past and that we will see certainly more of that in the future. Moving towards a diversification in reserve currencies in international trade is inevitable."

"Au-delà de ce cas particulier, l’accroissement des risques juridiques venant de l’application des règles américaines à l’ensemble des transactions en dollar de par le monde peut pousser à une diversification des devises utilisées. BNP Paribas a été l’occasion pour de nombreux observateurs de se rappeler qu’il y avait déjà eu un certain nombre de sanctions et de penser qu’il y en aurait certainement d’autres dans le futur. Un mouvement de diversification des devises utilisées dans le commerce international est inévitable."[33]

Petrodollar Wars

“I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.”
Alan Greenspan (2007)  [34]

News outlets in mid-2000-2002 carried articles about Saddam's efforts to sell oil on markets exclusively in Euros. [35] [36] This may have been viewed as a push by Iraq to influence other OPEC states to challenge the reserve currency status in oil trading of the USD. This may have been an unacceptable outcome in the global economy with respect to the flow of petrodollars.

Since the beginning of 2003, Iran has required euro in payment of exports toward Asia and Europe. The government opened an Iranian Oil Bourse on the free trade zone on the island of Kish, [37] [38] for the express purpose of trading oil priced in other currencies, including euros.

Libya decided to challenge the petrodollar system and stop selling all their oil for dollars, shortly before it was attacked. Qaddafi initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar. Qaddafi suggested establishing a united African continent, with its 200 million people using this single currency. … The initiative was viewed negatively by the USA and the European Union, with French president Nicolas Sarkozy calling Libya a threat to the financial security of mankind; but Gaddafi continued his push for the creation of a united Africa. Gaddafi’s proposal to introduce a gold dinar for Africa revived the notion of an Islamic gold dinar floated in 2003 by Malaysian Prime Minister Mahathir Mohamad, as well as by some Islamist movements. The notion, which contravenes IMF rules and is designed to bypass them, has had trouble getting started: a number of unexplained deaths, murders, plane crashes, sanctions, guerrilla warfare and NATO interventions stifled any such ambitions.

But today the countries stocking more and more gold rather than dollars include not just Libya and Iran, but also China, Russia, India and Brazil (Scott 2011) [39]. [40] In May 2014, China agreed to buy $400 billion of Russian-produced natural gas over 30-years, valued in domestic currencies, in what was touted as Gazprom’s biggest contract ever. In August, Russia signed a historic deal with Iran to purchase $20 billion of oil in rubles, bypassing Western sanctions against Iran while hastening the petrodollar’s decline. President Vladimir Putin said Russia should "aim to sell its oil and gas for Roubles globally because the dollar monopoly in energy trade was damaging Russia's economy." [41]

Petrodollar vs. Peak Oil

Global oil production will slowly decline from its peak around 2015 to 2200 (Hirsch 2005) [42]. [note 11]

With an "oil-for-dollars" agreement there seems to be a problem if oil production is running out. However, dependency of the global economy on oil will probably not only continue for the next 100 years but competition will increase. This is because the ratio of energy needed to extract oil vs. the energy one gets from burning oil is way higher than any other competing energy resource. Ie. for Saudi oil the ratio was 200:1 according to Clark (2005, p.100)[4], for fracking it is 3:2 and for "bio" fuels derived from plants it is less than one (negative). Moreover to get started with alternative energies oil is needed (Kuhlman 2007) [43].

Different oil fields peak at different times. Saudi wells are rated last, with the biggest remaining reserves and the highest ROI. As long as Saudi Arabia keeps buying U.S. securities and the region is militarily controlled by the U.S. the petrodollar monopoly can stay in place although it has lost much of its mesmerizing quality (Rowley 1989)[19].

It is important to understand that rising oil prices tightens the influence, control and revenues of the established oil-military-banking-political complex at the expense of the global population. However, the consumer price of oil must be kept in a certain range - artificially low - otherwise consumers are looking for alternatives to oil witch could threaten the petrodollar hegemony from the other side (Smithy 2003c)[44]

Outlook

The global medium of exchange as we know it is also a medium of social control (Smithy 2003a) [6]. For most of us it is difficult to imagine that it could come without coercion; such a switch in point of view, however, is proposed by B. Lietaer in his book "The Future of Money: Beyond Greed and Scarcity" (Lietaer 2001)[45]. His proposal is based on a diversity of freely associated local and national currencies designed for special purposes as well as a global reference, the "Terra". He argues this diversity creates resilience - a feature badly needed in times of monetary monoculture.

 

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Footnotes

  1. ↑ This view is also expressed by the commercially-controlled media today when finding that countries like Saudi Arabia are the culprits responsible for global imbalances when running surpluses. Rejecting advice on how to handle surpluses may be interpreted as dwindling power of the dollar empire. See ie. The Economist, Apr 26th 2012 "[http://www.economist.com/node/21553424 Petrodollar profusion - Oil exporters are the main drivers of global imbalances".
  2. ↑ These restrictions were a key component of the Bretton Woods agreement. "The capital controls were necessary otherwise speculators could have had a field day by betting that a certain currency would go down by selling it off against the US dollar and thereby forcing it to go down purely from their speculative activity. Large financial firms with access to lots of US dollars could therefore force a foreign currency of a weaker country to collapse as they desired" (Smithy 2003b) [5]. Exactly these currency attacks occurred later when the petrodollar recycling scheme was in place. Examples include the Mexican Peso crisis of 1994-95, the Asian financial crisis of the late 1990s and the Russian ruble crisis.
  3. ↑ "to provide financial assistance" is a bit of an euphemism here. These were loans with high interest rates which increased the dollar money supply and allowed Western banks to engage in currency speculation.
  4. ↑ Academically speaking, since the volume of oil that should have been supplied in observance of standard microeconomic theory exceeded the volume actually supplied "the difference [...] is in fact a subsidy granted, in real terms, to oil-importing nations such as the United States, Germany, France, and Japan" (Oweiss 1974) [1]. In other words, through the recycling mechanism these close trading partners of the U.S. can buy oil with a fiat currency print at will.
  5. ↑ If OECs purchase new US Treasury securities with petrodollars they give away their oil for the promise to be payed later, while at the same time giving Western banks the power to increase the money supply based on these assets. In addition they pay for military "protection" of their country by the same forces which siphon off their oil. Moreover, the Bank of International Settlements acknowleges that on the long run, "foreign investors in U.S. dollar assets have seen big losses measured in dollars, and still bigger ones measured in their own currency." [15]
  6. ↑ The U.S. National Intelligence Estimate 2007 stated that Tehran had put a stop to weapons production in 2003 contradicting its assessment from 2005, however, the sanctions were not lifted. [16]
  7. ↑ The Arabs' interest in the bank was more than financial. A classified CIA memo on BCCI in the mid-1980s said that "its principal shareholders are among the power elite of the Middle East, including the rulers of Dubai and the United Arab Emirates, and several influential Saudi Arabians. They are less interested in profitability than in promoting the Muslim cause."[22]
  8. ↑ Rarely mentioned is the fact that with the Yom Kippur war the Arab kingdom came under severe pressure from its religious leaders and its people over its quiet resignation to the Israeli occupation of Syrian and Egyptian territory since 1967 (following the Six-Day War). This was seen as so humiliating that a member of the Saudi Bin Laden family was motivated to found a forerunner organization to Al Qaeda in opposition to the Saudi ruling family's close ties to America. The United States' provocative support of Israel triggered an embargo, which in turn triggered a sudden 'shitstorm' in the commercially-controlled media. The Yom Kippur war did not come as a surprise, nor did the embargo, but was portrayed as such by the commercially-controlled media. Warnings of King Faisal were blocked by U.S. officials and the commercially-controlled media during the six month build-up to the war. The Saudi government was cornered between its population and American monetary interests. In rage that he could not escape the scapegoat position, King Faisal threatened to "burn the oil wells and return to the tents", pointing out that the U.S needed his oil, but he in turn doesn't need the dollars, in response to Kissinger who made a joke about the embargo on his visit to the kingdom in 1974. After his murder in 1975, the official narrative remarks that he was followed by more "pragmatic" leaders.
  9. ↑ The official narrative goes a long way to deny the fact that high oil prices stabilize the dollar. Rowley et. al. (1989)[19] point out that "the pivotal significance of high oil prices was abruptly uncovered in 1986, when Saudi Arabia flooded the oil market with additional supplies and caused the price of crude petroleum to drop below $10 per barrel. This action was recognized as so hazardous to the interests of the Armadollar- Petrodollar Coalition that some immediate political response was called for. Subsequently, the vice president [Bush] was sent to the Middle East with the task of openly asking Saudi Arabia to reconsider the action and reinstate lower levels for production." The price settled at $16 - low enough to shock the Soviet Union, which broke apart three years later.
  10. ↑ At first, the Saudi officials seemed not to grasp the idea. In 1969 the Saudi petroleum minister, Yamani, explained his policy toward the U.S. as follows: "For our part, we do not want the majors to lose their power and be forced to abandon their role as a buffer element between the producers and the consumers. We want the present setup to continue as long as possible and at all costs to avoid any disastrous clash of interests which would shake the foundations of the whole oil industry."[25] In retrospective he said: "The oil companies were in real trouble at that time, they had borrowed a lot of money and they needed a high oil price to save them." He was convinced of this by the attitude of the Shah of Iran, who in one crucial day in 1974 moved from the Saudi view [advocating lower prices] to advocating higher prices. [26] In a declassified Memo July 27, 1973 Kissinger lectures the Shah, that Egypt might use the oil embargo if they concerted its policy with the U.S. [27]
  11. ↑ This is largely because the expected Return on Investment (ROI) for new discoveries is reduced. There might be abundant oil reserves from a variety of sources - biotic and abiotic - but no way to extract them with a positive ROI.

References

  1. ↑ a b c d e Oweiss, Ibrahim M. (1974) Petrodollars: Problems and Prospects, Address before the Conference on The World Monetary Crisis, Arden House, Harriman Campus, Columbia University http://faculty.georgetown.edu/imo3/petrod/define.htm
  2. ↑ Engdahl, F.W. (2004) A Century of War: Anglo-American Oil Politics and the New World Order. London: Pluto ISBN 0-7453-2309-X, p.143.
  3. ↑ http://www.crs.gov RL33533 Saudi Arabia: Background and U.S. Relations. Congressional Research Service 7-5700
  4. ↑ a b c William R. Clark (2005) Petrodollar Warfare: Oil, Iraq and the Future of the Dollar, New Society Publishers, ISBN: 978-0865715141 http://www.petrodollarwarfare.com/
  5. ↑ a b c Smithy (2003b) WIZARDS OF MONEY - 5. Monetary Terrorism, http://www.robinupton.com/people/WizardsOfMoney/
  6. ↑ a b c Smithy (2003a) WIZARDS OF MONEY - 1. How Money is Created, http://www.robinupton.com/people/WizardsOfMoney/
  7. ↑ Letter of Jack F. Bennett (assistant secretary of the U.S. Treasury) to Henry Kissinger, February 1975. ‘Subject: Special Arrangements for Purchase of U.S. Government Securities by the Saudi Arabian Government.’ International Currency Review. Vol. 20, no. 6, January 1991.
  8. ↑ Joël v.d. Reijden (2013) 9/11: The WTC Collapses, Part 2, ISGP archives, https://isgp-studies.com/911-supranational-suspects#saudi
  9. ↑ a b c Scott, Peter Dale (2014) The State, the Deep State, and the Wall Street Overworld, https://wikispooks.com/w/index.php?title=Document:The_State,_the_Deep_State,_and_the_Wall_Street_Overworld
  10. ↑ a b Lucy Komisar. "The BCCI Game: Banking on America, Banking on Jihad", In: A Game as Old as Empire (2007) Berrett-Koehler, San Francisco ISBN, accessed Nov. 14, 2014, http://www.truth-out.org/archive/item/69782:ties-between-the-bush-family-and-osama-bin-laden
  11. ↑ U.S. Government Accountability Office. "The U.S.-Saudi Arabian Joint Commission on Economic Cooperation" ID-79-7: Published: Mar 22, 1979. Publicly Released: Mar 29, 1979. http://www.gao.gov/assets/130/126054.pdf
  12. ↑ a b c d Stan Goff. "The War for Saudi Arabia", Sanders Research Associates, December 30, 2004, accessed Nov. 14, 2014, http://freedomroad.org/2004/12/military-matters-30-the-war-for-saudi-arabia-2
  13. ↑ a b c Bichler, Shimshon and Nitzan, Jonathan and Rowley, Robin. (1989c) The Armadollar-Petrodollar Coalition - Demise or new Order? Working Papers (Part 4). Department of Economics. McGill University. Montreal. Vol. 89. No. 11. pp. 1-63. http://bnarchives.yorku.ca/135/01/890101RBN_ADPD_Coalition_Demise_or_New_Order.pdf
  14. ↑ Spiro, David E. (1999). The hidden hand of American hegemony: petrodollar recycling and international markets. Ithaca, NY : Cornell University Press.
  15. ↑ Steve Whitehouse. "BIS says global downturn could be 'deeper and more protracted' than expected", Forbes Magazin, June 30, 2008, accessed Jan 22, 2011, http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/30/afx5166493.html
  16. ↑ "Iran has stopped selling its oil for U.S. dollars, the Iranian ISNA news agency said on Saturday, citing the country's oil minister", RIA Novosti, Dez 08, 2007, updated Okt 28, 2014, accessed Nov. 14, 2014, http://en.ria.ru/world/20071208/91488137.html
  17. ↑ Stan Goff. "Persian Peril", From The Wilderness Publications, 2004, accessed Nov. 14, 2014, http://www.fromthewilderness.com/free/ww3/080904_persian_peril.shtml
  18. ↑ a b Vitali, S. and Glattfelder, James B. and Battiston, S. (2011) The Network of Global Corporate Control. PLoS ONE 6(10): e25995. doi:10.1371/journal.pone.0025995
  19. ↑ a b c Rowley, Robin and Bichler, Shimshon and Nitzan, Jonathan. (1989) The Armadollar-Petrodollar Coalition and the Middle East. Working Papers (Part 3). Department of Economics. McGill University. Montreal. Vol. 89. No. 10. pp. 1-54. http://bnarchives.yorku.ca/134/01/890101RBN_ADPD_Coalition_and_the_ME.pdf
  20. ↑ a b Bichler, Shimshon and Nitzan, Jonathan and Rowley, Robin. (1989a) The Political Economy of Armaments. Working Papers (Part 1). Department of Economics. McGill University. Montreal. Vol. 89. No. 7. pp. 1-34.
  21. ↑ a b Bichler, Shimshon and Nitzan, Jonathan and Rowley, Robin. (1989b) The Political Economy of Armament and Oil – A Series of Four Articles. Working Papers (Part 2). Department of Economics. McGill University. Montreal. Vol. 89
  22. ↑ Lucy Komisar. "The Evidence Is There: It's Time for Congress to Investigate the Ties Between the Bush Family and Osama bin Laden", IPS News April 4, 2007, http://www.alternet.org/story/50156/the_evidence_is_there%3A_it%C3%A2%E2%82%AC%E2%84%A2s_time_for_congress_to_investigate_the_ties_between_the_bush_family_and_osama_bin_laden
  23. ↑ James D. Hamilton (2011) Historical Oil Shocks. Department of Economics, University of California, San Diego, December 22, 2010, Revised: February 1, 2011
  24. ↑ Barsky, R. B. and Kilian, L. (2001) Do We Really Know that Oil Caused the Great Stagflation? A Monetary Alternative. in B.S. Bernanke and K. Rogoff (eds.) NBER Macroeconomics Annual 2001. Cambridge, MA: MIT Press.
  25. ↑ Barnet, R. J . (1980) The Lean Years. Politics in the Age of Scarcity, New York: Simon and Schuster, p. 61
  26. ↑ Oliver Morgan and Faisal Islam. "Saudi dove in the oil slick", The Observer (UK), January 14, 2001, interview with Sheikh Yaki Yamani (Saudi Arabian Oil Minister from 1962–1986) at the Royal Institute of International Affairs, http://www.theguardian.com/business/2001/jan/14/globalrecession.oilandpetrol
  27. ↑ White House Memorandum of Conversation (July 27, 1973) Participants: The Shah of Iran, Henry Kissinger, Helms, Saunders. Declassified Jan 9, 2009. http://www.nixonlibrary.gov/virtuallibrary/releases/jun09/072773_memcon.pdf
  28. ↑ http://www.youtube.com/watch?v=RZLdoWrNqHk Contra Krugman
  29. ↑ BNP Paribas's Sanctions Penalty Is Not Enough, Forbes Magazine, Jul 1, 2014, accessed Jan 10, 2015, http://www.forbes.com/sites/francescoppola/2014/07/01/bnp-paribass-sanctions-penalty-is-not-enough/
  30. ↑ US Blackmailed France using the Banque Nationale de Paris as Hostage, Umberto Pascali, Global Research, Jul 2, 2014, accessed Jan 10, 2015, http://www.globalresearch.ca/the-battle-for-europe-is-raging-how-america-undermines-franco-russian-relations/5389467
  31. ↑ France to hand over first Mistral helicopter carrier, Russia Today, Nov, 2014, accessed Jan 10, 2015, http://rt.com/news/200579-france-russia-mistral-delivery/
  32. ↑ BNP Paribas: Sanctions, Fines And Politics, Forbes Magazine, Mai 31, 2014, accessed Jan 10, 2015, http://www.forbes.com/sites/francescoppola/2014/05/31/bnp-paribas-sanctions-fines-and-politics/
  33. ↑ La BCE peut lancer un programme d’achats d’actifs privés et publics, Interview with Christian Noyer, Les Echos Bourse, Jul 14, 2014, accessed Jan 10, 2015, http://bourse.lesechos.fr/infos-conseils-boursiers/chat-interview-video/interview/la-bce-peut-lancer-un-programme-d-achats-d-actifs-prives-et-publics-984324.php
  34. ↑ The Age of Turbulence
  35. ↑ William Dowell. "Foreign Exchange: Saddam Turns His Back on Greenbacks", Time Magazine, New York City, Monday, Nov. 13, 2000, accessed Nov. 14, 2014, http://www.time.com/time/magazine/article/0,9171,998512,00.html
  36. ↑ Charles Recknagel. "Iraq: Baghdad Moves To Euro", Radio Free Europe, November 01, 2000, accessed Nov. 14, 2014, http://www.rferl.org/content/article/1095057.html
  37. ↑ "Kish Oil Exchange Planned", Iran Daily, January 24, 2006, http://www.iran-daily.com/
  38. ↑ Pepe Escobar. "A frenzied Persian new year", Asia Times, March 22, 2006, accessed Nov. 14, 2014, http://www.atimes.com/atimes/Middle_East/HC22Ak01.html
  39. ↑ Scott, Peter Dale. (2011) The Libyan War, American Power and the Decline of the Petrodollar System. Document:The_Libyan_War,_American_Power_and_the_Decline_of_the_Petrodollar_System
  40. ↑ Michael Lind. "The Wars That Really Are About The Oil", Spectator (UK), Aug 30, 2014, accessed Nov. 14, 2014, http://www.spectator.co.uk/features/9298552/the-wars-that-really-are-about-the-oil/
  41. ↑ Jerome R. Corsi. "Putin: 'The petrodollar must die'. On mission to reduce global role of U.S. currency", Whistleblower/WND Weekly, Aug 15, 2014, accessed Nov. 14, 2014, http://www.wnd.com/2014/08/putin-the-petrodollar-must-die/
  42. ↑ Hirsch, Robert L. (2005) Peaking of World Oil Production - Reacent Forecasts,ASPO
  43. ↑ Alexander Kuhlman, "The fallacy of Alternatives", In: "Peak Oil: The End of the Oil Age", 2007, accessed Nov. 14, 2014, http://www.oildecline.com/index.htm
  44. ↑ Smithy (2003c) WIZARDS OF MONEY - 20. The Battle Of The Dragons, Oil vs Insurance, http://www.robinupton.com/people/WizardsOfMoney/
  45. ↑ Lietaer, Bernard (2001) "The Future of Money: Beyond Greed and Scarcity"Random House. ISBN

Further reading

  • Spiro, David E. (1999) The hidden hand of American hegemony : petrodollar recycling and international markets. Ithaca, NY : Cornell University Press.
  • William R. Clark (2005) Petrodollar Warfare: Oil, Iraq and the Future of the Dollar, New Society Publishers, ISBN: 978-0865715141
  • Nitzan, Jonathan and Bichler, Shimshon (2009) Capital as Power. A Study of Order and Creorder. RIPE Series in Global Political Economy. London and New York. Routledge.

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