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Published: Monday, May 22, 2006
The Petrodollar is the
Achilles heel of the United States of America... Virtual Chicano writes:
Sometime during the Nixon administration (around 1973), the United States
decided to back its currency with oil. The gold standard had become too unstable
because it was easy for foreign central banks to manipulate the dollar by buying
and selling incredibly large quantities of gold. Domestically, Americans bought the full faith
and credit of the US government line but abroad world leaders demanded
something more tangible so that the dollar would hold its value against
inflation. The United States then rode of a wave of constant returns
to scale for three decades until some went and threw a wrench into that wheel.
And that someone was Saddam Hussein. In 2003, Saddam Hussein demanded payment for
Iraqs oil in Euros or Petroeuros. After 30 years many countries had grown
discontent with the way the United States was inflating the dollar and thus
making their dollar reserves lose value. Of all the European countries, France had the most to gain
because they had the bulk of contracts with the government of Iraq and Iraqi
companies. This is why France did not support the war with Iraq. France did
finally join in so as not to lose out on the rebuilding of Iraq, whenever that
is. The US has been stuck in the mud in this
liberation of Iraq and has people recalling not just the Viet-Nam quagmire,
but the stalemate in the Korean peninsula as well. If youve been watching the news lately, then you might
know that the US is finally ready to sign a peace treaty with North Korea,
putting out the embers of war so that it can concentrate on Iran. Yes,
Iran. Iran, not to be outdone by old Saddam, is creating its own
oil trading market, The Iranian Oil Bourse, to compete with the New York
Mercantile Exchange (NYMEX) and Londons International Oil Exchange
(IPE). And guess which currency it will
use, the Petroeuro... Is all the talk about a nuclear Iran is in
reality an attempt by the US to scare Iran out of establishing their Petroeuro
based oil Bourse? Although being the only game in town adds
inflationary pressures to the US$, it is still better for the Americans as
opposed to losing their world currency monopoly. The Empire of the United States reached the crest of world
dominance with its success in Europe and Asia at the end of WW2. Economic
de-stabilization could push it over the edge where, an act of self preservation,
might cause it to attack its weaker neighbors to the south, Venezuela and
Mexico. Therefore, it is important that every Latino
understand what the Petrodollar is and the potential ramifications of the
establishment of a major competitor, the Petroeuro. The Petrodollar is the Achilles heel of the United States
of America ... and all it will take to send the US over the edge is for
countries that have been either bullied or bombed (or both) by the US to
band together and dump the Petrodollar and to demand payment for their oil in
Petroeuros instead. Virtual Chicano Complete archives at http://www.sitbot.net/ Please let us stay on topic and be civil. OM
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