The Petrodollar
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[edit] Origins
In 1971 President Nixon took the US dollar off the gold standard.
OPEC did consider moving away from dollar oil pricing, as dollars no longer had the guaranteed value they once did. The US response was to do various secret deals with Saudi Arabia in the 1970s to ensure that the world's most important oil exporter stuck with the dollar. What the Saudis did, OPEC followed.
International oil trades at New York's NYMEX and London's IPE were (and still are) strictly denominated in dollars, hence the name 'petrodollar'. Oil around the globe is traded and payed for in US dollars.
[edit] Petronomics
Petrodollar economics or Petronomics is quite different than the economy thought at state schools. Because oil is traded in U.S.Federal Reserve Notes, governments around the world need to have a stack of dollar holdings to be able to supply their economies with the black gold. The effect is that the USA has become an dollar exporter nation, it exports vast amounts of dollars and the dollar has become the reserve currency of the worlds nations.
The dollar demand raises the value of the dollar and if the demand of dollars comes under threat, that could happen when oil exporting countries would ask for example euros for their oil, the dollars value is said to go down. Artificial balance or not: oil is dollars and dollars is oil.
Therefor its quite understandable that the interest of the US government is to keep oil denominated in dollars and they are prepared to to lenghts to keep it so.
The risks involved if all the world oil exporters, or just OPEC would move out of the dollar are said to be worse on the US economy than a nuclear strike. Thats quite a responsability on the side of the oil exporters too.
[edit] Enter Saddam
Mister Saddam Hussayn, the CIA installed dictator in iRAQ, moved out of the Petrodollar and into Petroeuro and as an influentual OPEC member he probably wanted the other OPEC members to do the same, or at least the risks were such. Well we know what happened to Saddam.
[edit] Iranian and Russian Oil Bourses
The next threat to the dollar hegemony comes from competing oil bourses that have their oil traded in other currencies than the dollar in the case of both Iran and Russia.Iran has already shifted its oil trade out of the dollar due to American economic,financial and covert military pressure. Iran's Finance Minister Davoud Danesh-Jafari said the Iranian Oil Bourse would be inaugurated during the anniversary of the Islamic Revolution (February 1-11) at the latest. Though they have made such claims before the Cutting of Undersea International Communications Cables makes it likely the Iranians are serious about it.
A possible currency used for dealings at the Iranian Oil Bourse is the Petroruble.
The russians stated to open their own Russian Oil Bourse before 2013. Russian President Vladimir Putin suggested the creation of the oil and oil product exchange to trade in Petroruble in St. Petersburg. “I believe that it would be a landmark event for the whole of Russia and for St. Petersburg,” Putin said.
[edit] American interests
Americans will use a vast array of strategies to halt or hobble the operation’s exchange:
- Sabotaging the Exchange this could be a computer virus, network, communications, or server attack, various server security breaches, or a 9-11-type attack on main and backup facilities.
see Cutting of Undersea International Communications Cables
- Coup d’état this is by far the best long-term strategy available to the Americans.
- Negotiating Acceptable Terms & Limitations this is another excellent solution to the Americans. Of course, a government coup is clearly the preferred strategy, for it will ensure that the exchange does not operate at all and does not threaten American interests. However, if an attempted sabotage or coup d’etat fails, then negotiation is clearly the second-best available option.
- Joint U.N. War Resolution this will be, no doubt, hard to secure given the interests of all other member-states of the Security Council. Feverish rhetoric about Iranians developing nuclear weapons undoubtedly serves to prepare this course of action.
- Unilateral Nuclear Strike this is a terrible strategic choice for all the reasons associated with the next strategy, the Unilateral Total War. The Americans will likely use Israel to do their dirty nuclear job.
see also Filipino Monkey Hoax
- Unilateral Total War this is obviously the worst strategic choice. First, the U.S. military resources have been already depleted with two wars. Secondly, the Americans will further alienate other powerful nations. Third, major dollar-holding countries may decide to quietly retaliate by dumping their own mountains of dollars, thus preventing the U.S. from further financing its militant ambitions. Finally, Iran has strategic alliances with other powerful nations that may trigger their involvement in war; Iran reputedly has such alliance with China, India, and Russia, known as the Shanghai Cooperative Group, a.k.a. Shanghai Coop and a separate pact with Syria.
