Maintaining an empire dependent upon a "dollars for oil" systemSubmitted by go213mph on Thu, 08/01/2013 - 09:11
Understanding the petrodollar system will help you make sense of the hundreds of U.S. military bases stationed in over 130 countries. After all, maintaining an empire dependent upon a "dollars for oil" system is no cheap task and requires careful monitoring and oversight of the world's oil supplies. Chief among the potential concerns for the petrodollar guardians are: threats of restrictions on oil supplies, new oil discoveries in potentially "anti-Western" oil fields, the nationalizing of a country's oil supplies, and perhaps most importantly, devising "permanent solutions" to the problems presented by nations who dare challenge the current "dollars for oil" system.
By perpetually expanding the U.S. money supply, America's standard of living increases as well. The only problem with this situation is that the only way that it can be sustained is if the demand for the dollar and for U.S. debt securities remains consistently strong.
Grasping this last point is extremely important. For if the artificial global dollar demand, made possible by the petrodollar system, were ever to crumble, forgeign nations who had formerly found it beneficial to hold U.S. dollars would suddenly find that they no longer needed the massive amounts that they were holding. This massive amount of dollars, which would no longer be useful to foreign nations, would come rushing back to their place of origin...America.
Obviously, an influx of dollars into the American economy would lead to massive inflationary pressures within our economic system.
As the primary guardian of the petrodollar, the U.S. often finds its militaristic adventurism at odds with the goals of foreign nations who do not share the same enthusiasm for confronting sovereign nations over a system in which they share no real direct incentives.
Given these facts, let's now explore how the petrodollar system has affected America's foreign policy actions in the oil-rich region of Western Asia.