Fueled By Dollars: An American War Story

1485594518351Adam Peach

Oil is the backbone of the global economy. It is used by almost every industrial sector you can think of. It’s easy to understand that if a nation has a lot of it, they also hold a lot of political and financial power. This is what makes Saudi Arabia so powerful. As the world’s largest oil producer, Saudi influence stretches far and wide.

The Saudis are the largest producers, however, aren’t the only ones with large oil reserves, of course. OPEC (Organization of the Petroleum Exporting Countries) is made up of 13 countries: Algeria, Angola, Ecuador, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela. In 1971, Henry Kissinger signed a deal with the House Of Saud ensuring that oil would be bought and sold in US dollars by OPEC, in return for military support from the US for Saudi Arabia. The US greenback then became the Petrodollar. A petrodollar is money accumulated by an oil-producing country for the sale of oil. As they sell oil, they collect American dollars. This gives strength to the US economy, due to so many people in the world using US dollars to buy and sell products. This is why, until recent years, most global trade was done using USD – thanks to oil. OPEC countries can then use their American dollars to buy investments, or imports for their economy. The Saudis hold so much economic power due to being the largest producer of oil, and selling to the largest consumer of oil. Thus, Saudi Arabia has accumulated a very large amount of US dollars over the years.

If oil producers stop using US dollars to trade oil, it can have a very damaging effect on the American economy. The US currency used to be a gold-backed currency. This means that you could trade gold for dollars, or visa versa. A US dollar was valued at $0.35 per ounce of gold and freely exchangeable. Due to the US having the largest gold reserves, the US dollar took on the role of being the world’s reserve currency, as per the Bretton Woods Agreement in 1944. For this reason, OPEC nations – who sought to trade oil for gold – were open to adopting the US dollar as the world reserve currency, or the petrodollar. In 1971, the dollar went from being the gold-backed currency it once was, to becoming a debt-based currency – which we are familiar with today. To put it as simply as possible, the trick is, the more global investments and debt in American Dollars, the more strength it has. When someone needs money, debt is created. Interest is then created from the debt – out of thin air. Money is made as it is needed and as it is loaned.

3153652073_5e2894d3e5_bOil Pumpjacks

Years ago, money was valued based on the gold behind it, and therefore could not simply be “created from thin air”. Someone could trade their gold in at the bank for a “bank note”. The new system, however, was completely based on debts. These debts give the dollar it’s strength. So what happens if global markets start using a different currency for trade? Well, some already have, and it could be the underlying reason for some of the deadliest, most recent conflicts we have seen in our time.

In the year 2000 – 3 years before the US invasion of Iraq – Saddam Hussein announced that Iraq would no longer accept the US dollar for oil payments. Going forward, Iraq demanded payments be made in the Euro. He viewed the United States as “the enemy”, and did not wish to support the currency of his adversary. 3 years later, the US and it’s allies administered “Shock & Awe” – an unprovoked, surprise attack, raining hundreds of bombs over Iraq in a short period of time. It was meant to do exactly as the name implies – to shock and awe a civilization, and force submission upon it. It also sent a very clear message to other oil-producing nations, in the case they may be thinking of switching trade currencies.

It’s important to note, when Saddam made this announcement, Iraq was also still on the hook for paying reparations from the first Gulf War. By switching currencies, this undermined those payments, and would have probably created a massive accounting headache for the UN.

The main reason used to justify invading Iraq, was that Saddam Hussein was harbouring weapons of mass destruction. This claim was argued, and ultimately proven false. The repetitive “weapons of mass destruction” claims, were that of a rouse, it seems. After a few bloody months, Saddam was eventually ousted and hung, and Iraq oil was controlled by the United States. This obviously ensured that Iraq oil would continue to be sold using the US dollar – or at the very least, was now under control by the United States.

As of 2004, there were only two countries that did not trade oil using American dollars – Iran and Syria. Both of these nations sought to trade oil in the Euro, not the American greenback. This meant that customers who wished to buy oil from Iran or Syria had to buy it using the Euro. This was supported by Russia – a major customer of Iranian oil – as it aimed to deflate the impact of long-running economic sanctions against Russia by the US. By switching currencies, the US would not have the same political or economic influence over Russia, however direct or indirect that influence was.


Saddam Hussein

There are other reasons for under-developing, non oil-producing nations to trade oil for Euro. Mainly, due to closer proximity to Europe. Therefore, many other imports are done using the Euro. Under-developed countries would benefit, due to having more Euro than US dollars from these trades.

In 2011, the US invaded Libya. A country that was once called a “model” and an “important ally” was now an enemy. This was allegedly due to claims of genocide carried out by Libyan leader Muammar Gaddafi. While some of those claims may have been true, another fact that went unmentioned in the mainstream media, was that Gaddafi was planning to start using a gold-backed version of the African Dinar. His idea was that all African nations could adopt this new currency and use it to buy oil from Libya – freeing African nations from the economic hold the US and Britain had on them. Minister Louis Farrakhan once said that Gaddafi has invested more into African political independence than any other leader in recent history.

As another large oil producer, this would have had a crushing effect on the US dollar as it was a throwback to when gold was the global reserve currency, or petrodollar. African nations would not have to depend on American dollars to stabilize it’s economy. In January 2016, it was reported that Hillary Clinton had 3000 classified emails leaked from the State Department. Shortly after, a separate report indicated that some of those emails included evidence that the French-led NATO invasion of Libya was to control Libyan oil for Western nations, and due to growing concern over Gaddafi’s large gold and silver reserves. In the Foreign Policy Journal, Brad Hoff states:

‘…historians of the 2011 NATO war in Libya will be sure to notice a few of the truly explosive confirmations contained in the new emails: admissions of rebel war crimes, special ops trainers inside Libya from nearly the start of protests, Al Qaeda embedded in the U.S. backed opposition, Western nations jockeying for access to Libyan oil, the nefarious origins of the absurd Viagra mass rape claim, and concern over Gaddafi’s gold and silver reserves threatening European currency.’

‘The email identifies French President Nicholas Sarkozy as leading the attack on Libya with five specific purposes in mind: to obtain Libyan oil, ensure French influence in the region, increase Sarkozy’s reputation domestically, assert French military power, and to prevent Gaddafi’s influence in what is considered “Francophone Africa.”’

Besides gaining control over Libyan oil reserves, Western nations now controlled a reported 144-tons of Libyan gold. This came during a time when central banks from Venezuela were demanding their gold back from Britain, and Germany was demanding their gold reserves back from the US and France – citing it was not to be sold, but to used to deter a “currency crisis”. There was a rumour that the US and Britain had depleted the gold, through various wars and trade deals over the years. This rumour was amplified after Germany demanded they be allowed to see it’s gold in the US federal Reserve. First, the demand was declined, citing “security” and “not enough room” as the reasons. After some persistence, German officials were allowed access to a room in which 5 or 6 golden bars sat to represent the German reserves. This same year, Romania has demanded that Russia return its’ gold. Netherlands also asked Switzerland for their gold back. Iran also repatriated its’ gold around this time. Countries would store gold in other nations’ banks for security. In the case of an invasion, their gold would be safe in a foreign bank, to prevent theft. Countries were now asking for their stored gold back.

It’s interesting to note that, also in 2012, central banks around the world purchased more bullion by the ton, then any other year in almost half a century. It’s been about the same time since the petrodollar was created, as mentioned previously.


Muammar Gaddafi

In recent reports, US oil firms have been pressuring countries like Nigeria to leave the OPEC agreement. If this were to happen, the US could potentially begin it’s own separate version of OPEC. This has been previously speculated with consideration of the US establishing military bases in Uzbekistan, Tajikistan, Kyrgyzstan, and Turkmenistan in the Caspian Basin since the wars in Iraq and Afghanistan. Natural gas is also a key factor here. Construction began in 2015 for the Turkmenistan–Afghanistan–Pakistan–India Pipeline (TAPI), or also known as the Trans-Afghanistan Pipeline. At a total length of 1127 miles (1814 Km), it will provide gas to Pakistan and India, from gas fields in Turkmenistan – passing through Afghanistan. This project was developed by the Asian Development Bank. The ADB is based out of the Philippines, however, all of it’s former presidents are of Japanese nationality – as well as current president Takehiko Nakao. This project has seen a lot of interest from US oil firms. A similar project, the Afghanistan Oil Pipeline, was to run adjacent to TIPA, carrying oil. Instability in certain Afghan regions due to the Taliban and other factors have brought the project to a halt.

The US currently gets a huge portion of it’s crude oil from Algeria, Libya, Egypt and Angola. Nigeria was once a major supplier of oil for the US, but has since been dropped as countries like Angola now produce more oil for America. Nigeria does not export oil to the US anymore. It was reported in 2004, that US firms were pressuring non-OPEC oil producers to “flood the oil markets” and retain denomination is US dollars, in an effort to weaken OPEC’s market control and challenge the recent transition from dollars to Euro for some nations.

Iran is the most recent nation to publicly announce their move from the US dollar. Although the announcement itself is a major political event, Iran has been selling oil in other currencies for a few years now, as previously stated in this article.

I reported about the “Anti-Dollar Alliance” in a previous article, in which Russia and China have been lobbying a new gold-backed currency to it’s trade partners. This has been going on under the radar for a few years now. In fact, China has been buying oil in it’s own currency, the Yuan, since 2012. As Russia is a major supplier of oil to China, both nations formed an agreement in which China could purchase as much oil from Russia as needed – in Yuan, not dollars. Since, China has convinced other trade partners to start trading with Yuan, such as Australia and Taiwan. Thanks to so many nations transitioning, in 2015 the IMF classified the Yuan with “Reserve-currency status”. A 2014 poll on CNBC showed that the Yuan would soon eventually succeed the US dollar as the leading reserve currency.

This “economic takeover” has been in the works even before China’s 2012 announcement to boost it’s own currency. The Independent UK reported in 2010 that secret meetings had taken place between Arab states, such as Qatar, United Emirates and Kuwait, as well as China, Russia, Japan, France and Brazil, to discuss importing and exporting in currencies such as the Chinese Yuan, Japanese Yuan, Euro, gold and a new unified currency supported by middle-eastern and African nations – possibly the gold-backed African Dinar proposed by Libya’s Gaddafi. This could explain the spike in gold prices that year, as suggested by The Guardian – in addition to the global repatriation of gold reserves. Gold prices in 2017 continue to surge. In the report by Independent UK, China’s former special envoy to the Middle East Sun Bigan warned of the risks of deepening tensions between the US and China over influence and oil in the Gulf regions.

“Bilateral quarrels and clashes are unavoidable,”

“We cannot lower vigilance against hostility in the Middle East over energy interests and security.”

said Sun Bigan to the African Review

In several reports, it was claimed that Syria had been selling gold reserves to Russia and China, to battle tough economic sanctions imposed by Western nations – this has been denied by the head of Syria’s central bank. The claims state that Syria has been liquidating their gold, at a 15% discount. It was also revealed in 2012, through a group of hackers targeting the Syrian regime, that Assad had transferred 2-billion Euro to a Russian, government-run bank. Before the civil war, 90% of Syria’s oil was going to Europe, however, since the sanctions, Syrian oil production is down 30%. Since 2012, and possibly earlier, India, Russia, and China have been buying Iranian oil with Gold. In relation to the claims of Syria liquidating gold, it would be an advantageous move to purchase gold from Syria at 15-percent off, and use it to purchase oil at market value.


Gold Bullion

Saudi Arabia is now feeling the economic shift, in 2017. For the first time in history, the nation will no longer be tax-free, as it imposes an IMF-backed value-added tax on a number of products to cut budget deficit. In may of 2016, due to slumping oil prices and a growing deficit, Moody’s Investor Service downgraded Saudi Arabia’s credit rating, along with Bahrain and Oman. Moody’s left the credit ratings for Kuwait, United Arab Emirates, and Qatar untouched. The Arab states left untouched were also some of the states involved in the secret discussions with China and Russia, as previously mentioned in this article.

It seems the term weapons of mass destruction could be translated to “weapons of mass economic destruction”, to be more specific. Based on events in the last 17 years, it’s evident that a number of occupations by US and its NATO allies were to protect economic interests, not humanitarian interests. This neo-liberal, imperialistic approach has subsequently created a number of growing issues in various regions; most notably ISIS, who formed as the US was gearing up to leave Iraq. As imperialist nations occupy others, uprisings will occur. More groups like ISIS will pop up due to nations becoming victim of this economic and militaristic oppression. People will fight back. Time and time again, this has been the case.


US Secretary of State & Saddam Hussein, circa 1980’s

With the continued tension towards Iran from the US, it will be interesting to see what will come next. The Bush administration used the same false claims that Iran was building weapons of mass destruction, however, the CIA concluded that Iran was not in possession of such weapons. It is true, however, that Iran would like to build weapons for defensive purposes. The reason for this argument, goes back to the Iran-Iraq war, in which Iran was attacked by a US-supported Saddam Hussein in the early 80’s. Saddam used chemical weapons against Iran in this bloody war. It was later revealed that the US was supporting Iraq during this war against Iran. For reasons like this, Iran would like to assemble a defence system – but have not, as of yet. The US also used a recent Houthi attack against a Saudi naval ship to increase pressure on Iran. The Houthi group are a militia fighting in Yemen against Saudi, and Al Quaeda forces. Yes, you read that correctly. Al Quaeda and the Saudis are fighting against the same force in Yemen, being supported by the US. The Houthi have ties to the Iranian government, however, are not directly related. The Houthi have went against Iranian orders in the past, proving their own agenda comes first, rather than Iranian politics. Iran is still a valuable ally for them, regardless. This is a deadly proxy war that has been increasing in tension as multiple militias fight for power in a land with no water or food, and 2-million people are facing starvation and dehydration.

Norwegian professor Johan Galtung, is the nobel peace price nominee who very accurately predicted the fall of the Soviet Union. He also predicted the Tiananmen Square uprising in China, as well as, the September 11 attacks in New York. He has predicted that the US superpower will collapse by 2020. In his book, “The Fall of the American Empire—and then What?”, he guides through several phases that push closer to power collapse. President Trump getting elected on an immigration platform coincides with the final phase in the book. He has stated that announcements to deport 3-million immigrants and build a border wall are also subjects that speed up the decline.

Related Sources:

Link 1, Link 2, Link 3, Link 4, Link 5, Link 6, Link 7, Link 8, Link 9, Link 10, Link 11, Link 12

Published by

Patrick Vinson

Founder of Berning Media Network

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s