In 1973, U.S. President Nixon and U.S. Secretary of State, Henry Kissenger, contrived a deal with the Saudi Arabian Royal family to sell their oil only in U.S. dollars in exchange for military weapons and protection, especially from Israel who the U.S.A. is also in the business of protecting. Their terms were simple, the Saudis must agree to sell all of their oil for U.S. dollars only, and must be open to holding their surplus proceeds in U.S. Debt securities. By 1975 all of the oil producing O.P.E.C. nations had agreed to sell their oil supplies exclusively for U.S. dollars in exchange for weapons and military protection.
The creation of the Petrodollar provided the U.S.A. with three primary benefits:
- It increased global demand for the U.S. dollar
- It increased global demand for U.S. debt securities especially from oil producing nations
- It enabled the U.S. to buy oil with a paper currency it can print itself
Where once the U.S.A.’s greatest export was manufactured goods, it now became the U.S. dollar itself which costs practically nothing to produce, and is backed by nothing more than militarily enforced agreements with a coalition of oil producing nations. Subsequently, we see the demise of manufacturing in the U.S. as foreign nations hungry for U.S. dollars to buy oil, strategically place themselves as off-shore manufacturing centers for U.S. consumers. So the U.S. prints fiat currency, buys oil with it, and obligates the oil producer to invest surplus dollars in U.S. treasury bonds. It also sells its currency to foreign nations, so they can buy oil with it, so the oil producer can again sink the surplus back into U.S. treasury bonds. This merry-go-round of free wealth and energy has enabled the U.S. government to maintain artificially low interest rates, a disproportionately high standard of living, and endless funds to invest in its military industrial complex.
September 12, 2001, despite zero evidence against Iraq, U.S. Defense Secretary Rumsfeld, U.S. President Bush and Deputy Secretary of Defense Wolfowitz propose that Iraq should be “
a principal target of the first round in the war against terrorism”
. Despite the fact that on 10 separate occasions that Bush asked the C.I.A. to find evidence-linking Iraq to the terror attacks of September 11, the C.I.A. repeatedly came back empty-handed. In ‘Against All Enemies’ by Bush’s former counterterrorism director, Richard A. Clarke, the author recounts in the days immediately following the 9/11 attacks, “
The president in a very intimidating way left us, me and my staff, with the clear indication that he wanted us to come back with the word there was an Iraqi hand behind 9/11.”
U.S. officials began publicly demonizing Iraq, and Saddam Hussein, whipping the American public into a war-crazed frenzy with unfounded claims of Iraq’s alleged development and possession of weapons of mass destruction. In addition, Iraq’s intimate (and untrue) ties to international terrorist groups were highlighted, and hypnotically repeated, through the mainstream media outlets to a fearful and angry American public. Ironic that the U.S. who funded the Mujahedeen, and created Al Qaeda continuing to use them to this day, in Syria for example, falsely used the claim that Saddam supported them as a pretext to invade Iraq.
By 2002, Saddam had fully converted to a Petro-euro. On March 19, 2003, George W. Bush announced the commencement of a full scale invasion of Iraq.
In June 2003, Deputy Defense Secretary Paul Wolfowitz said, “Let’s look at it simply. The most important difference between North Korea and Iraq is that economically, we just had no choice in Iraq. The country swims on a sea of oil.” In January 2003, British Foreign Secretary Jack Straw admitted that oil was a key priority to the West’s involvement in Iraq. Former Chairman of the Federal Reserve, Alan Greenspan, said “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.”