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Despite talk of Iran’s nuclear program and the Zionist agenda of the Greater Israel project receiving mass public interest, the Federal Reserve Bank’s petrodollar world order remains the hidden force behind world affairs. At the same time that the Iran war threatens to end the current global order (based on international energy trade in dollars) the United Arab Emirates is leaving the Organization of the Petroleum Exporting Countries (OPEC). While Yahoo Finance reported that the move may help ensure the dollar’s dominance, World Alternative Media reported that the move allows more flexibility for de-dollarization.
In order to keep the UAE from settling future energy transactions in Chinese yuan, the Treasury Department is actively considering a currency swap line for the Emirates which is being sold to the public as a confidence-building measure rather than a bailout. Treasury Secretary Scott Bessent confirmed the possible currency swap line during a Senate hearing on April 22.
“…global oil sales are priced in dollars under the petrodollar system, which is the primary reason that most of the Gulf states have defaulted to a U.S. dollar peg for decades. With the UAE exiting the world’s foremost oil price-setting cartel at the same time that it’s threatening to settle oil transactions in Chinese yuan, the Treasury has significant diplomatic and economic impetus to provide its longtime Gulf ally with whatever currency swap line it might request,” Yahoo Finance reported Tuesday. “This also seems to reveal a strategic shift in leadership among the Gulf states, from the Saudis to the UAE. This could virtually make the UAE the dominant banking center of the region, while at the same time helping to ensure that the U.S. dollar will be the dominant transactional currency for decades to come.”
More nations are expected to follow the UAE’s exit from OPEC.
“The UAE is no longer entirely dependent on oil and hydrocarbons and our economy is highly invested all over the world. The organization OPEC acted as a tax on global productivity and it’s now in our interest to see the world as productive as possible. Also, it costs the UAE the most to impose OPEC,” former UAE diplomat to the United Nations and World Trade Organization Obaid Ahmed Al-Zaabi told RT Tuesday. “The truth is very likely, because the more people that defect, the more costly it is to maintain the volume restriction. So if the UAE is serious and they no longer respect the limits, then there’s going to be no incentive for Kuwait and other countries to reduce their production.”
While the UAE and other Gulf nations such as Saudi Arabia and Qatar are U.S. allies, Tehran is allied with Moscow. Washington appears to be making moves to avoid losing its Arab partners who have become imperiled by the Iran war, as the loss of oil-producing allies could result in the destruction of the U.S. Federal Reserve note. The timing is critical as the U.S. is now effectively insolvent.
The U.S. dollar went through a number of key changes throughout the course of its era of global dominance, beginning with the creation of the private Federal Reserve Bank in 1913 – a corporation which creates Federal Reserve notes (dollars) which are mirrored by the Treasury Department’s treasury notes (bonds) which get repaid with newly-printed Federal Reserve notes.
Importantly, bonds are debt instruments, as issuing a bond creates a debt which must be paid upon the bond’s maturity.
From 1913 to 1971 the dollar was still backed by gold, but was now debt-based, using the federal income tax as the method of wealth transfer from the citizen (the debtor) to the private central bank (the lender) while also funding the new global policemen military used in the World Wars and subsequent U.S. conflicts.
The U.S. dollar fully assumed the position of a world reserve currency in 1944 under the Bretton Woods Agreement. When the U.S. went off the gold standard in 1971, a new relationship between the dollar and its value emerged – the “petrodollar” – a debt-based fiat currency which now holds world reserve status due to America’s control of global energy markets.
The nature of this international monetary relationship makes the purchase of U.S. treasury bonds advantageous to foreign countries, who as bond holders are paid back in dollars which can be used in the international energy trade. It also allows the U.S. to export much of the inflationary results of money printing (quantitative easing).
While inflation acts as a hidden tax on those who hold dollars, the introduction of new money to the money supply is a necessary activity to support an empire which must rely on its military to ensure an overseas energy trade based primarily on U.S. dollars.
Numerous examples serve as proof that all wars are banker wars.
The Bank of England helped liquidate the Nazi’s looted gold to fund Germany’s war against Poland and thus England.
Saddam Hussein’s Iraq mulled the creation of its own gold-backed currency prior to the false flag inside job of 9/11 being orchestrated as an excuse to invade the Middle East.
Muammar Gaddafi had a plan to establish a gold-backed Libyan currency before he was sodomized with a bayonet by U.S.-backed jihadis.
Nicholas Maduro had Venezuela ditch oil trade in dollars prior to his capture by U.S. special forces.
Russia pushed BRICS to abandon international energy trade in dollars (Russia was forced into war with Ukraine after the 2014 U.S.-backed coup in Kiev).
Thus, the relationship between the petrodollar, U.S. overseas military actions and the Federal Reserve Bank can be viewed as a closed loop, with every element reliant upon the others to sustain itself.
The Mises Institute explained the nature of this monetary system, a system which results in the enrichment of the central bankers at the expense of the U.S. citizen through inflation, taxation and perpetual war.
Canterbury Consulting detailed the creation of the petrodollar in a white paper that explored the reign of the Federal Reserve’s debt-based fiat currency:
Before and after World War II, the United States was the largest oil producer globally. The “Seven Sisters” oil companies—Exxon, Mobil, Texaco, Chevron, Gulf Oil, Royal Dutch Shell, and Anglo-Iranian (British Petroleum)—dominated oil production and distribution. Of these, five were U.S.-based, and two were British, which ensured that most oil sales were conducted in U.S. dollars, with the British pound being the second most commonly used currency in oil transactions.
In the 1950s, large oil reserves were discovered in the Middle East and North Africa (MENA), significantly increasing global oil production. By the late 1950s, this surge in production led to an oversupply of oil, causing a decline in prices. To protect domestic oil producers and prices, the U.S. introduced the Mandatory Oil Import Program, which imposed quotas on oil imports. In response, Saudi Arabia, Iran, Iraq, Venezuela, and Kuwait formed the Organization of the Petroleum Exporting Countries (OPEC) in 1960, marking a shift in power dynamics within the global oil market.
By the early 1970s, OPEC had gained substantial influence over oil pricing. In 1973, OPEC implemented an oil embargo against the U.S. in retaliation for its support of Israel during the Yom Kippur War. The embargo caused severe oil shortages and skyrocketing prices in the U.S., leading to long lines at gas stations. While the oil crisis disrupted the U.S. economy, oil-producing nations in the Middle East reaped significant financial benefits, accumulating vast amounts of U.S. dollars, often referred to as “petrodollars.”
The embargo was lifted in 1974, but despite being lifted, oil prices remained elevated. The rise in oil prices after the embargo was lifted could be attributed to the devaluation of the U.S. dollar following the abandonment of the gold standard. That same year, in 1974, the U.S. entered into an economic cooperation agreement with Saudi Arabia. The agreement aimed to strengthen political ties, support Saudi Arabia’s industrialization and development and ensure the recycling of petrodollars back into the U.S. economy.
Under the agreement, the U.S. committed to assisting Saudi Arabia in achieving its development goals by providing expertise in key sectors such as agriculture, science, and technology. In return, Saudi Arabia agreed to reinvest its petrodollars in the U.S. economy through the purchase of U.S. goods and services, investments, and financing development projects. This arrangement established a framework for economic interdependence, solidifying U.S.-Saudi political ties and contributing to the stabilization of the U.S. economy and currency during the transition from the Bretton Woods system.
As a result of the agreement, Saudi Arabia became a significant holder of U.S. Treasury securities in the 1970s and 1980s. This recycling of petrodollars helped the U.S. maintain its economic dominance by ensuring continued demand for the U.S. dollar, even after the gold standard was abandoned. The petrodollar system thus reinforced the dollar’s status as the world’s primary reserve currency and underpinned the global oil trade.
BREAKING: DISASTER FOR THE DOLLAR! – UAE Leaves OPEC As Global Monetary System Shifts!
