13 votes

Is it All About the Petrodollar?

I'm just starting to learn about the petrodollar. Great article here, but I have questions.
http://www.caseyresearch.com/articles/will-iran-kill-petrodo...

"By 1975, all of the members of OPEC agreed to sell their oil only in US dollars."

1) Why was there this leap? if the saudis only did it in exchange for protection, what motivated the other opec members to join in?

2) What advantages does NOT using the US dollar bring to these "rouge" countries?

3) Doesn't this article/position only reinforce the idea that we should get behind the neocons and protect our savings (i.e. our dollars)?

Thanks.



Trending on the Web

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

The petrodollar helps enable

The petrodollar helps enable US politicians / The Fed to print money out of thin air by reducing the inflationary impact of doing so. This is because US dollars are required for buying oil. "Excess" money in our economy is soaked up through gasoline purchases. At the same time, other nations are required to hold significant reserves of US currency for their future oil purchases, which also props up the value of the dollar. The petrodollar system is designed in this way so that US politicians can print even more money, IMO.

...

Notice Arabia, & the Word.

We need to look back in history, (around 1890 1920). British (& euro) aristocrats & long-term planners schemed to cut-up the middle-east, which was unified under the Caliphate. The Brits installed Zionists in Palestine, and aided /armed the Saudis to capture Arabia. The plans were made when oil & paper money did not have so much influence in international trade.
After the two world wars Britain was weakened and america emerged as the replacement, with greater resources & strength, to maintain hegemony & the status-quo, i.e. the sliced-up condition of the middle-east, the tiny states who have conflicts with neighbors and turmoil within.

the U$ has encircled Arabia with bases & fleets, some forces & trainers are within, protecting the 'princes' & flow of oil. Most important is that Macca (Baca in the Bible) is in Arabia, which is the center for all Muslims, a place for mass communication, to transmit the Word. That is why the MSM is quiet about the significance of Macca.

Careful study of history shows the influence of religion in world affairs.

Have to disagree

Have to disagree.

When Mayer Amschel Rothschild said

"Give me control of a nation's money and I care not who makes her laws"

and

Israeli Sephardic leader Rabbi Ovadia Yosef said

“Goyim were born only to serve us. Without that, they have no place in the world; only to serve the People of Israel…Why are gentiles needed? They will work, they will plow, they will reap. We will sit like an effendi [Arabic, meaning lord or master] and eat,”

There was no such thing as a petro dollar.

Luke 3:38
Isaiah 43:3-5

Agreed , re Money & Religion.

great observations, that the two statements were made well before the circulation of petro-dollar$, $$ were not in vogue. Thanks for quoting. Both the statements are so relevant & related. The 1st one is about money and the other one is about racism. These quotes show their over-confidence, or call it arrogance, because they rely on support from a Biblical verse which encapsulates both the statements,

See Deuteronomy 23:19-20 (King James Version)
[[ 19 Thou shalt not lend upon usury to thy brother (jew); usury of money, usury of victuals, usury of any thing that is lent upon usury: 20 Unto a stranger (gentile) thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the Lord thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it. ]]

Once the goyim are trapped in debt they remain slaves to usury.
Ask & question scholars about the authenticity of the above verse. It is obviously a fabrication, to give unfair advantage to a cult. Law from the Heavens is Fair & Universal.

fireant's picture

Good, thought provoking questions.

1) At that time, the dollar was the only widely traded currency, was thought to be safe, stable, and reliable, and in order for OPEC to work, oil would have to be traded in a single currency. The sellers could then use that currency to purchase very safe and profitable U.S. Treasuries. The U.S. in turn, could run up debt because there was always someone to buy it, and we guaranteed ourselves a steady supply of oil.

2) They get out from under the thumb of U.S. dictates.

3) Not in my opinion. We have been irresponsible with our privilidge of world reserve currency, and are now becoming morally derelict by attempting to keep it at the point of a gun. We need a cleansing. Either we accept it willingly, or it will be forced upon us by the market in a most unpleasant way.

Just my sophmoric thoughts.

Undo what Wilson did

It is a legacy of Bretton Woods.

That is all it is.

Now connect these dots

Israeli 6 day war, Arab reaction over the next 5 years, the Oil Embargo, and the CIA's reaction via CONFESSIONS OF AN ECONOMIC HITMAN by John Perkins.

Yes, please BUY this wonderful libertarian BOOK! We all must know the History of Freedom! Buy it today!

"The System of Liberty: Themes in the History of Classical Liberalism" ...by author George Smith --
Buy it Here: http://www.amazon.com/dp/05211820

So, the value of the Dollar

So, the value of the Dollar will skyrocket? Don't hold gold or silver?

Hold income producing assets and some hard assets*. No Debt.

http://www.dailypaul.com/243584/the-worldwide-reverse-bankru...

*Hard Assets include Gold and Silver

Below I meant to say "keep oil prices high for everyone..".

I agree with that... I am buying large apartments for Good Cash

Flow...... Patriots welcome to join me.

Treg

Yes, please BUY this wonderful libertarian BOOK! We all must know the History of Freedom! Buy it today!

"The System of Liberty: Themes in the History of Classical Liberalism" ...by author George Smith --
Buy it Here: http://www.amazon.com/dp/05211820

The petrodollar is a monopoly,

to keep prices high for everyone, including Americans. Start moving your money into hard assets, no debt. Free markets are fair and will make your wages purchase more goods. This is good for everyone except the rent seekers (the .001%).

Rent Seekers (the .001%). ??

"Free markets are fair" is a fair statement. I could (/not) understand what you meant in the last sentence, - pls clarify "rent seekers".

Folks rent car, machinery, tools, etc., use it, return it, pay cost & move on. Same with room (motel /hotel) or a house. The owner pays taxes and maintains the property, provides this service to the needy. It is all voluntary, if the one who borrowed the car or house cannot afford it any longer - he can return the same , = move on.

There is another kind of rent seeker called the money-lender. Money is a consumable item, it is spent, gone from the borrower's possession. To repay he has to earn it back and add interest till the date of repayment. Most often it creates difficulty for the borrower, this is what we see today. Humanity, govts & corps are in debt to banks, and the interest is increasing the load, now it is mathematically impossible to repay the (U$) debts.

Definition of Rent Seekers

When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.

In economics, rent-seeking is an attempt to obtain economic rent by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth, for example, spending money on political lobbying in order to be given a share of wealth that has already been created. A famous example of rent-seeking is the limiting of access to lucrative occupations, as by medieval guilds or modern state certifications and licensures.

Investopedia explains 'Rent-Seeking'
An example of rent-seeking is when a company lobbies the government for loan subsidies, grants or tariff protection. These activities don't create any benefit for society, they just redistribute resources from the taxpayers to the special-interest group.

= unfair advantage, etc.

+1. Thank you for your attention & response, now its clear.
" manipulating the social or political environment in which economic activities occur,". Its like gaining advantage or privilege through govt intervention /influence.

Two years back I had read an article from the Independent Institute on this subject of Rent Seekers, - the contents were so similar to what you posted above. It may sound silly or strange but I completely forgot about it, - your post was like a reminder.
Maybe its the effect of some medicines I have been taking, for over 4 weeks, it even causes drowsiness,etc. I hope this ends soon.

I wish to say - the term "rent seekers" is a bit misleading. It would be better to use /coin some other term closer in meaning, or descriptive of the activities mentioned in your post above.
Thanks again, and best wishes. RP 2012.

There's no clarity on economic events as to just how many

variables are at play and 'economists' who claim to know all the variables are just that, 'economists', a term that now has become a mockery in and unto itself

I can't imagine however this event not having something to do with these OPEC countries basically picking sides during the Cold War between the US and Soviet.. soviet likely had their source of oil and energy and their own oil producers at the time and this can be seen as a counter measure by opec from an objective point of view. unquestionably there are rivalries on behalf of buying and selling oil as well, since at the time those activities carried heavy political implications, as they still do today

this is why if EU breaks up, US dollar won't be here to stay because it is the same with geopolitics. each nation's interest is differently served by forming alliances with different superpowers, and the more that align with the US the greater incentive there is to align with the us' opposing interests, because the offer will be upped, essentially, and it is a zero-sum game--there is only so much US can offer. the late comers will rank behind and that creates a disincentive. we're talking about the case where alliances are formed on the grounds of political negativity, of course, meaning trade wars, embargoes and all the rest, which does happen with high probability in global depressions. Each and every time, in fact, as far as what's been observed in recent history.

While the Petro dollar may have some meaning

the trouble in the middle east is mostly, if not entirely, about Jewish Xenophobia. Centuries of persecution and exile have created a deep pathology in the jewish psyche, and the Israelites are willing to attack anyone that threatens them in any way.

re - Zion's Xenophobia.

+1. very valid point, the msm will not discuss this aspect.

Xenophobia : an unreasonable fear or hatred of foreigners or strangers or of that which is foreign or strange.

Very little is strange* to them, because, as a nation they are the most informed people on Earth, so fear of the 'unknown' is not there.
Here is a sample of their intellect, a 2 min video =

"See how Israel teach their children about the world" -
http://www.youtube.com/watch?feature=endscreen&v=sVCMGtrsh_8...
they deny their own wrong, & find fault in everybody else.

re - Persecution - you rightly mentioned centuries, but it is both ways. many nations over many centuries canNot be wrong each time. there is something (U$ury) that jews practice and other nations detest - Eventually - when a certain point is reached which is unbearable, e.g. suffocation, near to death, as in a Mort-Gage or Debt-Trap.
In pain the survival instinct is activated, its natural, mankind thinks hard, or calls out to a greater force, The Creator, seeks add-wise, the issue is discussed & debated, awareness increases, the awakened folks see the root of injustices = banksters & their U$ury.

We are in similar times, it has become fashionable to bs banksters. We may (not?) call it "Righteous Indignation" on a mass scale. See =
http://en.wikipedia.org/wiki/Righteous_indignation
[[ Righteous indignation is typically a reactive emotion of anger over perceived mistreatment, insult, or malice. It is akin to what is called the sense of injustice. In some Christian doctrines, righteous indignation is considered the only form of anger which is not sinful, e.g., when Jesus drove the money lenders out of the temple. (Gospel of Matthew 21) ]]

re - zion's pre-emptive attacks, its because of guilt complex = fear.
Rothschildes have led them into an unenviable situation /position.

I read this book: "Petro-Dollar Warfare"

It cleared up a lot of things.

It IS all about petro-dollars because the world must convert their currencies into US Dollars or "petro-dollars" in order to buy oil.

So the way I understand it, if you are Germany and you want to buy oil from Iraq, you must first must basically change your euros into American dollars and then condust your business.

But as Ron Paul pointed out; in late 2000, Saddam announced to the world that he would no longer accept US dollars for oil but only Euros of GOLD instead.

THAT was Saddam's death warrant and sowed the seesds for the Iraqi invasion.

I believe it also sowed the seeds for 9/11 because the adminsitration needed a "new Pearl Harbor" in order to invade Iraq.

Immediately after Baghdad fell, Iraqi oil once again traded in US dollars.

THAT was the "Mission Accomplished" which Bush proclaimed to the world but Americans were to ignorant to understand this.

In 2008, Iran as well began trading in an alternate currency which is why we are sanctioning and threatening them.

It is a matter of time before a conflict will end Iran's trading in anything other than US dollars.

"We have allowed our nation to be over-taxed, over-regulated, and overrun by bureaucrats. The founders would be ashamed of us for what we are putting up with."
-Ron Paul

"Mission Accomplished" , Economic Hitmen.

+1. yes, that was the main point, = well focused. There is a brief animated video which helps understanding this subject, = plunder with ruses and then gun-point. see - Economic Hitmen - 2 minutes,
http://www.youtube.com/watch?v=n7Fzm1hEiDQ

I will post here what was quoted in another thread of DP, = there is an old saying (of knotty men)- "when you run out of tricks pull out a dagger".

+1

and this is a major reason why we destroyed Libya and killed Gadaffi. He demanded gold for his oil too.

When a true genius appears in the world, you may know him by this sign: that the dunces are all in confederacy against him. ~J. Swift

some more reading material

http://www.energybulletin.net/node/7707

and of course, Ron talking petro dollars:

http://www.lewrockwell.com/paul/paul303.html

1) we'll make you rich. (pure speculation)
2) can't be robbed through inflation.
3) sure, if you want to spill blood to protect the printing press.
the same one that's robbing you of your savings and purchasing power.

"The two weakest arguments for any issue on the House floor are moral and constitutional"
Ron Paul

I can answer your last

I can answer your last question.

Undoubtedly its in America's best interest to maintain this dollar monopoly.

Leaving aside the moral arguments, America's army is the most powerful in the world by far and thus the status of the dollar as the world's reserve currency can be maintained indefinitely.

The only thing that brings parity to the situation is a thermonuclear device. America will not and cannot directly threaten a nation that has this capability. That is why the thought of Iran having nuclear technology is so disproportionately abhorrent to neocons when you compare it to the risk of Iran attacking the US.

Its not that they fear an Iranian attack. They fear that they will not be able to threaten and strong arm them or their allies if they develop this capability.

Oh so another country wants

Oh so another country wants to trade in something other then Dollar. So to keep them trading in dollars we threaten them and keep them suppressed and broke? And then, you expect them not to want to be free from us? You are saying to keep them from attacking us we must continue to build on our pressure and economic sanctions which only makes them more determined to break free. Have you never experienced a growing up teenager who doesn't want to be told what to do? It's oppressive rebellion. If someone tells you that you have to buy something in a dollar and can't use whatever the two of you agree on you just sit back and say, "oh well that's fair?" How are they different from us wanting to have freedom in money?

Commerce with all nations, alliance with none, should be our motto. - T. Jefferson rЭVO˩ution

"Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.” - BASTIAT

Look, my man, I'm simply

Look, my man, I'm simply trying to address the OP's questions. If the world perceived America as weak or stumbling, you guys could be the subject of an economic collapse that makes the collapse of the Soviet Union look like a joke.

Yes, America is a bully. At the same time it also helps countries with technologies, loans etc when they comply.

This is how America has done things since the second world war and few will say that it has been a total failure.

Someone very rightly said that to debate with someone, you have to be able to see things from their point of view as well.

Simply calling Neo-Conservatives evil psychopaths is not going to change anything.

Can you tell me for example, if the dollar was no longer the world's reserve currency, as many here seem to want, how it would benefit you in any tangible way.

This is a complicated issue and shouting slogans and one-liners isn't going to be what solves it.

My whole point reflects conservatism.

We may not have the perfect systems, but they work to a degree and have proved to be relatively stable. Let's change things for the better, but in a slow concerted way rather than taking extreme steps that throws everything into chaos.

Success story?

"Let's change things ... in a slow concerted way rather than taking extreme steps that throws everything into chaos."

Or in other words...

Free condoms for rapists is also a successful program. As long as my sister is being raped it isn't fair for yours to opt out as long as the system is relatively stable and no one's grandmother is being sodomized.

dynamite anthrax supreme court white house tea party jihad
======================================
West of 89
a novel of another america
https://www.smashwords.com/books/view/161155#longdescr

Rapists, sister being raped,

Rapists, sister being raped, sodomy...

If you think that is a way to address a person trying to have a reasonable discussion then I'm sorry, I'd rather not.

If you want to address individual points I invite you to do it. That way I can learn something and you may also do.

Anytime you are speaking of government actions...

Rape and sodomy are about as close of a comparision as can be made. If you feel otherwise, it's only because they are taking it easy on you, if you are middleeastern, there's no kiss, no grease, no reach around. Just hard and often.

Share this:

http://youtu.be/yuC_4mGTs98

I have sworn upon the altar of God eternal hostility to every form of tyranny over the mind of man.

If these are the terms in

If these are the terms in which you want to discuss things then no thanks.

A system?

it's not a 'system' it's a monopoly, that is enforced by coercion and military intervention, fear and retaliation; and yes it's successfull, to the point the US economy is not sustainable without the concept of the petro dollar, mainly to support and fund all these immoral wars to enforce it's continuation.
Was the mafia control over gambling casino's a system...or a crime?.

"Hell is empty, and all the devils are here" (Shakespeare)
RP 2012~ Intellectual Revolution.