Thursday, April 05, 2007

Petro Dollars and U.S. Debt

An interesting post on the U.S. Debt and the U.S. Dollar as it relates to American Petro-Economy Imperialism

Cost, abuse and danger of the dollar

By Rudo de Ruijter,
Independent Researcher

Camouflaged conflicts

To keep the permanent demand for dollars going, oil sales must remain in dollars. That is why the US tries to keep as much influence as possible, as well on the US owned IPE and NYMEX world oil markets, as with the people in power in oil exporting countries. By doing so the US secures its oil supply at the same time. Beyond that, lucrative contracts can be obtained from the local governments, and with these contracts a maximum of benefits can be seized from the oil production.

Fear always wins over reason

But when the local governments do not want to sell their oil in dollars anymore, the US has a problem. Then, the US-president will not explain how dependent the US is on the dollar demand. The conflict is always camouflaged. And to do so, always an emotional theme is chosen. In times gone by this was the danger of communists, today it is the danger of terrorists, fundamentalists and other popular bogies, like “the enemy has weapons of mass destruction” or “the enemy tries to make nukes.”

The fact that there is, rationally, not a single proof for such allegations, does not matter. The emotions always win. Even the fact, that these accusations could be turned around and then can be proved, is noticed by hardly anyone. There was no proof Iraq had weapons of mass destruction, but the US, the accuser, has weapons of mass destruction and has used them. There is no proof Iran has intentions for nukes, but the US, the accuser, has nukes and has used them, and, afterwards, repeatedly threatened to use them again.

But once again, at the moment accusations are loaded with emotions, humans switch off their intelligence. Then, reason is no argument for peace anymore. The theatre is only about the launched accusations. And because, as a result, only specialists of weapons of mass destruction or nukes are called upon to give their opinion, nearly nobody finds out what the conflict is really about.


In Venezuela, since many years, the US tries to pull down president Chavez, pretexting he is a dangerous communist. Chavez has nationalized the oil industry and has set up Barter-deals to export Venezuelan oil in exchange for medical care from Cuba and others. In Barter deals there is no necessity for dollars and the US has no profit from the oil trade.


Until 1990 the US maintained lucrative commercial contacts with Saddam Hussein. He was a good ally. For instance, in 1980 he had tried to free the hostages at the US-embassy in Teheran.

But in 1989 Saddam accused Kuwait of flooding the oil market and making the oil price go down. The following year Saddam tried to annex Kuwait. It led to an immediate turn around of the attitude of the US. With the annexation Saddam would dispose of 20 percent of world oil reserves. The Iraqis were chased out of Kuwait by the US, with an alliance of 134 countries, and condemned to water and bread by a UN-embargo that lasted ten years.

Although the US sought a way to re-establish its influence in Iraq, Saddam’s switch to the Euro on November 6, 2000 [9], would lead to the US invasion. The dollar sank away and in July 2002 the situation got that serious, that the IMF warned that the dollar might collapse. [10] A few days later the plans for an attack were discussed at Downing Street. [11] One month later Cheney proclaimed it was sure now, that Iraq had weapons of mass destruction. [12] With this pretext the US invaded Iraq on March 19, 2003. The US switched back the oil trade into dollars on June 5, 2003. [13]

There is a huge difference between trading Iraqi oil in euros and trading it in dollars. This will be explained below. (See: “How do you steal oil reserves?”)

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1 comment:

Randal said...

The USD saw a traumatic day of trading yesterday as it stretched as high as 1.48 versus the EUR, and spiked up to 1.8636 against the GBP. This sharp decline in the value of the USD comes from the ongoing financial crisis and the fact that the recent rescue plan has not yet produced enough confidence in the future of the financial sector. Investor uncertainty lingers over the question of whether or not this plan will do the job, especially when many of its details may not get released until later next week. Until then, the USD will continue to bear the brunt of the recent volatility emerging from this crisis.

Randall Flynn

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