World War III: the unthinkable cost of preserving the petrodollar

crisishq: As noted by many of our readers, one of the key topics omitted from our article on the inevitability of economic collapse was the petrodollar system. Due to its significance, we felt that this subject deserves its own article. If you have never heard of the petrodollar, don’t be surprised. There’s a good reason for this. No major news network will dare touch this subject because if this information was ever to become public knowledge, politicians would find it next to impossible to convince American people to support any more wars. Public approval of wars is only possible as long as people remain ignorant of the primary driving force behind our foreign policy. The reason you haven’t heard of the petrodollar system is because our government wants you to think that we start wars to spread democracy.

However, if you want to distinguish truth from propaganda, if you want to know the real reasons behind the global conflicts in our recent history, you must first learn about the petrodollar system. Without this crucial piece of info, you will have a hard time understanding what really happened in Libya, what’s happening in Syria right now and what’s going to happen in Iran next.

Why did NATO and the U.S. aid Libyan “rebels” in killing Gaddafi? Why was our government willing to support and arm the same terrorists that would later turn on our embassy and murder US Ambassador to Libya, Chris Stevens? Why was killing Gaddafi so absolutely imperative?
Why are we now doing the same thing in Syria? Why are U.S. operatives currently on the ground in Syria aiding Al Qaeda to topple Assad? Why are we willing to work along side known terrorists just to destabilize Syria and overthrow the regime there?
Why are we willing to risk World War 3 by attacking Iran, a key ally to Russia and China? Pakistan and North Korea already possess a nuclear stockpile, but Iran is years away from developing a nuclear weapon. Iran has no military capability to target the U.S. and it has not attacked another country since 1798. Yet the media is trying to convince us that we are weeks away from Ahmedinajad unleashing his non-existent weapons of mass destruction. Sound a little familiar? Have we heard this before, maybe?
So what is the petrodollar system and why is it so important? Why is the United States willing to risk a new world war just to maintain the hegemony of the petrodollar? To get a proper perspective we need to start with a quick historical background:

Bretton Woods Conference

In July of 1944, as World War II was still raging, 730 delegates from all 44 Allied nations gathered in Bretton Woods, New Hampshire, to setup institutions and procedures to regulate the international monetary system and to establish the rules for commercial and financial relations among the world’s major industrial states.
The Bretton Woods Agreement established the dollar as the world’s reserve currency, which meant that international commodities were priced in dollars. The agreement which gave the United States a distinct financial advantage, was made under the condition that those dollars would remain redeemable for gold at a consistent rate of $35 per ounce. The fixed dollar to gold convertibility rate established a stable platform for global economic growth.
As the issuer of the world’s reserve currency, the United States promised to print dollars in direct proportion to its gold reserves. However, this promise was based on “the honor system” since the Federal Reserve refused to allow any audits or supervision of its printing presses.

The U.S. defaults on its obligation to convert dollars to gold

In the years leading up to 1970, expenditures on the Vietnam war made it clear to many countries that the U.S. was printing far more money than it had gold. In response to this and the negative U.S. trade balance, nations began demanding fulfillment of America’s “promise to pay” – that is, the redemption of their dollars for gold. This of course set off a rapid decline in the value of the dollar. The situation climaxed in 1971 when France attempted to withdraw its gold and Nixon refused.

On August 15, President Nixon made a televised announcement
referred to as the Nixon shock, stating the following:
“I have directed the Secretary of the Treasury to
take the action necessary to defend the dollar
against the speculators. I have directed Secretary
Connolly to suspend temporarily the convertibility
of the dollar into gold or other reserve assets,
except in amounts and conditions determined to be
in the interest of monetary stability and in the
best interest of United States.”

This was obviously not a temporary suspension as Nixon claimed, but rather a permanent default. For the nations of the world who entrusted the United States with their gold, this action was outright theft. Overnight, dollars transformed into fiat currency and the Federal Reserve was now free to print away. By abandoning the gold standard, the U.S. government removed all restrictions from the Federal Reserve. However, the ability to print money out of thin air comes with a pitfall. This is because each new printed dollar devalues the existing money supply already in circulation. That is unless there is a growing demand for dollars to counterbalance the newly issued currency. So, under the direction of the Secretary of State Henry Kissinger, a brilliant political and economic idea was soon devised referred to as the petrodollar system.

The birth of the petrodollar leads to global domination

In 1973, President Nixon promised King Faisal of Saudi Arabia that the US would protect Saudi Arabian oilfields from any and all invaders. In return, Saudi Arabia and by extension OPEC, agreed to sell their oil in US dollars only. Essentially, this meant that all countries purchasing oil from OPEC had to do so in US dollars, or ‘petrodollars’. This forced the world’s oil money to flow through the US Federal Reserve, creating ever-growing international demand for U.S. dollars. As if that weren’t sweet enough, as part of the deal, OPEC countries were required to invest their profits in US treasuries, bonds and bills. This strengthened the US dollar, resulting in a steady US economic growth.

While other countries exchanged their currency for the dollar (forfeiting value in the process), the U.S. simply printed more money to match their needs and purchase their oil – essentially for free. Of course rather than exchange currencies, many countries focused on exporting goods to the U.S. to maintain their constant supply of the Federal Reserve paper. Paper went out, while everything America needed came in and in the process the United States got very, very rich. It was the largest financial con in recorded history.
As the coffers got fatter and fatter, the U.S. military machine continued to expand at an accelerated rate. The arms race of the Cold War was a game of poker. Military expenditures were the chips and the U.S. had an endless supply of chips. With the Petrodollar under its belt, the U.S. was able to raise the stakes higher and higher, outspending every other county on the planet. Until, eventually, U.S. military expenditure surpassed that of all other nations in the world combined. The Soviet Union never had a chance.
The collapse of the Communist block in 1991 removed the last counterbalance to America’s military might. The United States was now an undisputed super power with no rival. Many hoped that this would mark the beginning of a new era of peace and stability. Unfortunately, there were those in high places who had other ideas.

Petrodollar system must be maintained at any cost

That same year, the U.S. invaded Iraq in the first Gulf War. And after crushing the Iraqi military and destroying their infrastructure, including water purification plants and hospitals, crippling sanctions were imposed on Iraq, which prevented its infrastructure from being rebuilt. These sanctions, which were initiated by Bush Sr. and sustained throughout the entire Clinton administration, lasted for over a decade and were estimated to have killed over 500,000 children. The Clinton administration was fully aware of these figures.

Excerpt from a May 5, 1996 interview:
Lesley Stahl from 60 Minutes show, asks Secretary of State
Madeleine Albright about the U.S. sanctions against Iraq:
“We have heard that a half million children have died.
I mean, that’s more children than died in Hiroshima.
And, you know, is the price worth it?“
Secretary of State Madeleine Albright replies:
“I think this is a very hard choice,
but the price–we think the price is worth it.”

What exactly was it that was worth killing 500,000 kids for? Let’s see if you can spot a pattern here.
Iraq… In November 2000, Iraq began selling its oil exclusively in euros. This was a direct attack on the petrodollar and it wasn’t going to be tolerated. In response, the U.S. government with the assistance of the mainstream media began to build up a massive propaganda campaign, claiming that Iraq had weapons of mass destruction and was planning to use them.
In 2003, the U.S. invaded Iraq. Once the U.S. had control of the country, oil sales were immediately switched back to dollars. This is particularly notable due to the fact that switching back to the dollar meant a 15-20% loss in revenue due to the euro’s higher value. It doesn’t make any sense at all unless you take the Petrodollar into account.

Excerpt from a March 2, 2007 DemocracyNow interview:
So I came back to see him a few weeks later and by that time we were bombing in Afghanistan. I said “Are we still going to war with Iraq?” and he said, “Oh, it’s worse than that”, he reached over on his desk, picked a piece of paper and he said:
“I just got this down from upstairs today (meaning secretary of defense office) today. This is a memo that describes how we’re going take out 7 countries in 5 years, starting with Iraq and then Syria, Lebanon, Libya, Somalia, Sudan and finishing of Iran.”
– Wesley Clark, Retired 4-Star General and Supreme Allied Commander Europe of NATO from 1997 to 2000

Libya… Muammar Gaddafi harbored the Lockerbie Bombers and allowed various terrorist organizations establish training camps in Libya. He tried to buy a nuke from China in 1972. In 1977, he approached Pakistan, then India. He sought nerve gas from Thailand. Then he did something totally insane. Gaddafi decided to move away from the petrodollar in favor of a gold-based currency. Seeking nukes and harboring terrorists is one thing, but threatening the petrodollar is quite another. Within a year, ‘internal’ elements rose up in rebellion against Gaddafi. After taking control of the region, U.S. and NATO armed rebels executed Gaddafi in cold blood and immediately setup the Libyan Central Bank.

Iran… In 2005, Iran sought to create an Iranian Oil Exchange, thus bypassing the US controlled petrodollar. Fear that western powers would freeze accounts in European and London banks put an end to that plan. More recently however, Iran was able to secure agreements to begin trading its oil in exchange for gold. In response, the U.S. government, with mainstream media assistance has been attempting to build international support for military strikes on the pretext of preventing Iran from building a nuclear weapon. In his recent State of the Union address, Obama went as far as to say that when it comes to Iran and the insistence they dismantle their nuclear program, “no options are off the table”. By stating ‘no options’ this would include nuclear deployment as a deterrent. In the meantime, the U.S. established sanctions that, U.S. officials openly admit, are aimed at causing a collapse of the Iranian economy.
Syria… Syria is Iran’s closest ally and they’re bound by mutual defense agreements. Syria is currently being destabilized from within by the “Free Syrian Army” (FSA), in its intensifying effort to topple Assad. It is a well known fact that FSA consists of multiple terrorist factions from Afghanistan to Chechnya, most notably Al Qaeda. Yet this is not stopping United States or NATO from providing covert assistance to FSA. Despite warning from Russia and China to the United States, the White House has made statements within the past month indicating that the U.S. is considering military intervention.
However, it should be clear, that military intervention in Syria and Iran isn’t being considered. It’s a forgone conclusion, just as it was in Iraq and Libya.

World War 3: a calculated risk to preserve the petrodollar

The U.S. is actively working to create the context which gives them diplomatic cover to do what they already have planned. The motive for these invasions and covert actions becomes clear when we look at them in full context and connect the dots.
Those who control the United States understand that even if only a few countries begin to sell their oil in another currency it will set off a chain reaction and the dollar will collapse. They understand that there’s absolutely nothing else holding up the value of the dollar at this point, and so does the rest of the world.

But rather than accepting the fact that the dollar is nearing the end of its lifespan, the powers that be have made a calculated gambit. They have decided to use the brute force of the U.S. military to crush each and every resistant state in the Middle East and Africa.
That, in and of itself, would be bad enough. But what you need to understand is that this is not going to end with Iran. China and Russia have stated publicly and in no uncertain terms that they will not tolerate an attack on Iran or Syria. Iran is one of their key allies, one of the last in independent oil producers in the region. And they understand that if Iran falls, then they will have no way to escape the dollar without going to war. And yet, the United States is pushing forward despite the warnings.
What we’re witnessing here is a trajectory that leads straight to the unthinkable.
It’s a trajectory that was mapped out years ago, in full awareness of the human consequences.

Who Is Pulling The Strings?

But who was it that put us on this course? What kind of psychopath is willing to intentionally set off a global conflict that would lead to millions of deaths just to protect the value of a paper currency?
It obviously isn’t the president. The decision to invade Libya, Syria and Iran was made long before Obama had risen to the national spotlight. And yet he’s carrying out his duty just like the puppets that preceded him. So who is it that pulls the strings?
Often the best answer to questions like these are found by asking another question. Cui bono? Who benefits?
Obviously, those who have the power to print the dollar out of thin air have the most to lose if the dollar was to fall. Since 1913, that power has been held by the Federal Reserve.
The Federal Reserve is a PRIVATE entity, owned by a conglomerate of the most powerful banks in the world. And the men who control those banks are the ones who pull the strings. To them, this is just a game. Your life and the lives of those you love are just pawns on their chess board. And like a spoiled four year old who tips the board on to the floor when he starts to lose, the powers that be are willing to start World War III to keep control of the global financial system.
Remember this when these wars extend and accelerate. Remember this when your son or your daughter comes back home in a flag draped coffin. Remember this when the point the finger at the new boogeyman. Because the mad men who are running this show will take this as far as you will allow them to.
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