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Preparing for the Collapse of the Petrodollar System, Part 1

Over the last several weeks, there have been many news headlines containing the words "Iran" and "nuclear capability." If you listen closely, you can almost hear the drumbeats of a fresh war in the Middle East.

As an economist, I have been trained to view the world through the lens of incentives. (I am a "bottom line" kind of guy.) And just as every action is motivated by an underlying incentive, every decision has a related consequence.

This brief article details the actions, incentives, and related consequences that the United States has created through its attempts to maintain global hegemony through something known as the petrodollar system.

This article will begin with a look back at the important events of the 1944 Bretton Woods Conference which firmly established the U.S. Dollar as the global reserve currency. Then we will examine the events that led up the 1971 Nixon Shock when the United States abandoned the international gold standard. We will then consider what may be the most brillant economic and geo-political strategy devised in recent memory, the petrodollar system. Finally, we conclude by examining the latest challenges facing U.S. economic policy around the globe and how the petrodollar system influences our foreign policy efforts in oil-rich nations. The collapse of the petrodollar system, which I believe will occur sometime within this decade, will make the 1971 Nixon Shock look like a dress rehearsal.

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The Printing Press is now what supports the dollar

In this article I cover from Bretton woods gold standard to the petro dollar and argue that the dollar is only being help up by printing more and that countries go along with it because they have so many dollars and want to get paid.

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Isn't taking over Iran an

Isn't taking over Iran an attempt to keep the petrodollar going? Either we have another background war going on and we take over the entire Middle East, or Russian and China try to stop us and we have WW3 and then the dollar really does collapse. Am I wrong?

End the Fed.


1913 - 2013: Converting labor wages into taxes. Up, up & away!

Rhetorical question, so it may seem.

The Fed: Loaning you blind, since 1913. What difference does a century make?

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul