The Petrodollar

PETRODOLLAR:

The current global money system is a fiat system: the value of currency is not based on a physical commodity such as gold, but on the government’s decree that the currency has value.

Most of the world came off asset-backed currencies after world wars 1 & 2.

Then, the US had to get off the Gold standard in 1971 – after the Korean war (1950-53) and then Vietnam war (1955-1975).

That is when the fiat system went into full-swing: the Fed could print as much or as little as it deemed appropriate, and the value was backed by the power of our military enforcing all oil to be traded/transacted in US Dollars.

With no hard asset backing the currency, enforcing global sales of oil in US Dollars became the only way to control the value of the currency with precision (military precision):

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Iraq: In 2000, Iraq announced its intention to sell oil in EUR instead of USD.

The US-led coalition invaded Iraq on March 20, 2003, and was able to overthrow Saddam Hussein’s regime, murdered him publicly, and Iraq returned to selling its oil in USD.

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Libya: On March 15, 2011, Moammar Ghaddafi announced he would begin selling oil in gold-backed dinars instead of USD. The 2011 Libyan civil war broke out just after the announcement and Ghaddafi was killed before this plan could be put into practice.

Ghaddafi was captured and killed on October 20, 2011 – the video of his murder was spread on social media.

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Venezuela: In 2017, Venezuela’s government announced it would sell oil to India in rupees instead of USD. The country has faced economic sanctions and unable to trade oil in any currency.

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Iran: In 2018, Iran announced it would accept payments for oil in EUR instead of USD. Iran has been under US sanctions and unable to trade oil in any currency ever since.

@SecComms

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