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The End Of The Petrodollar

There is no real proof that Iran is developing nuclear weapons. Nevertheless the West is insisting it does and wants to impose oil sanctions. But these sanctions are going to fail if not backfire since Iran has many alternative customers for its oil, like India and China. The sanctions are not just about nukes. The eroding position of the dollar as the world’s reserve currency is at least an important factor in the current stand-off. 1973 marked the beginning of the petro-dollar era with an agreement between Nixon and king Feisal: protection against the USSR of Arabia in exchange for acceptance of the hegemonic role of the dollar in oil affairs. Oil=dollar. Since it is the US that prints dollars, it virtually owned oil for free while the rest of the world started to hunt for dollars, not just to pay for oil but for other international trade as well. The US not so much wages war for oil but rather to keep the petro-dollar system alive. Saddam started to accept euro’s and likely this was one of the reasons that led to his demise. Currently China get’s 15%  of its oil from Iran. Meanwhile the whole world is moving away from the dollar. India is prepared to pay Iran in gold for oil. China and Russia are trading in ruble and yuan, China and Japan are preparing to trade in yuan and yen, India is accepting yuan, etc., etc. With Europe threatening with an oil-boycot, Iranian oil soon will be traded completely without petrodollars, a development backed by India, China and Russia. This is why Washington wants regime change in Tehran. North-Korea and Pakistan have the bomb, but Washington does not seem to care. After all they have no oil.

2012 might very well be the end of the petrodollar.

[LewRockwell.com]

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