Comment: That Embargo was really about bad paper more than anything...

(See in situ)


That Embargo was really about bad paper more than anything...

That embargo wasn't really about the rate of exchange for oil and such is evident in that the exchange for oil from a historical perspective of a commodity index has since been for the most part both stable and cheap.

The real stink in 1973 was over the fact that the US dollar which had been representing yellow gold in exchange for black gold, was no longer representative of a commodity. The real stink was that it became very clear to the Arabs that there was no longer any natural reason for the market to still respect the US dollar as a reserve currency since it is there simply is little reason to respect a fiat currency in such a way. The dollar had stopped being unique to competing currencies from a market standpoint which had previously caused the market to naturally save dollars as a metric of commodity exchange which prior to 1971 no other currency could do.

Since leaving the gold standard and since the settlement of the 1973 embargo, the US dollar has been backed by the commodity of coercion. We outright bribe other countries to use it exclusively (Egypt etc.)so as to thus maintain its status. Countries which do not comply are sanctioned economically to the point of war(Iraq, Iran, Libya) while the Emirate nations get from us the guarantee of their generational sovereignty from both internal dissent and foreign aggression. 20 years after the dollar going fiat yet inexplicably remaining a currency of 'reserve value', we put on a show for the other monarchies in putting the Emir of Kuwait back on his throne despite the fact Kuwait's autocratic government is counter to everything the United States otherwise stands for.

This has been going on because Nixon and Kissinger 'made them an offer they couldn't refuse'.

Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has. - Margaret Mead