Death of petrodollar is a Biden legacy

Posted on by M. K. BHADRAKUMAR

Indian Punchline

I like the inclusion of information regarding the assumed death of Jamal Kashoggi- Admittedly it’s been years since I’ve thought about this incident. It doesn’t seem to me that his body was ever found, so who among us really knows if he died or simply disappeared? Though, I do believe he is dead.

At that time the perception managing media was pushing him as some kind of freedom loving human rights activist. Whatever floats your boat I guess? He was a CIA asset, gun runner and smuggler of who knows what else. At my censored site there’s information a plenty on him and the alleged killing

The Deep State should have been alert five years ago when Candidate Joe Biden announced that he, if elected as president, was determined to make the Saudi rulers “pay the price, and make them in fact the pariah that they are.”

Biden was blunt to the point of being brutal about the Saudi royal family, saying there was “very little social redeeming value in the present government in Saudi Arabia” under King Salman’s rule.  

But, instead, the Deep State felt delighted that Biden was just the man to succeed Donald Trump and reverse the Trump-era practice of forgiving Saudi human rights violations in order to preserve jobs in the American arms industry.

Biden probably knew by then that the American intelligence had concluded about the role of Mohammed bin Salman, the Saudi crown prince and the de facto leader of the country, in the killing of the dissident-journalist Jamal Khashoggi, who was a ‘strategic asset’ of the CIA for navigating the next Saudi succession and the ensuing regime change to a happy ending. Khashoggi’s decapitation crippled Washington’s game plan to install a pliable ruler in Riyadh. 

Today, all that is history. But unlike the Bourbons, the Saudi royals never forget or forgive. They also have infinite patience and their own concept of time and space. And last Sunday, June 9, they struck. 

In great royal style, last Sunday, Riyadh simply let the 50-year-old petrodollar agreement between the US and Saudi Arabia to expire. 

To recap, the term “petrodollar” refers to the US dollar’s pivotal role as the currency used for crude oil transactions on the world market per the US-Saudi deal dating back to 1974 shortly after the US went off the gold standard. 

In the history of global finance, few agreements have wielded as many benefits as the petrodollar pact did for the US economy. At its core, the agreement stipulated that Saudi Arabia would price its oil exports exclusively in US dollars and invest its surplus oil revenues in US Treasury bonds — and, in a quid pro quo, the US would provide military support and protection to the kingdom.  

The ‘win-win’ deal ensured that the US gained a stable source of oil and a captive market for its debt, while Saudi Arabia secured its economic and overall security. In turn, the denomination of oil in dollar elevated the dollar’s status as the world’s ‘reserve currency’. 

Since then, the global demand for dollars to purchase oil has helped to keep the currency strong, not only made imports relatively cheap for American consumers but in systemic terms, the influx of foreign capital into US Treasury bonds supported low interest rates and a robust bond market.

Please read entirely at link- I’m going to include only a few more paragraphs of interest

There is no question that Saudi Arabia has a roadmap worked out. Four days before the expiration of the oil-for-security deal, Reuters reported that Saudi Arabia has joined a China-dominated central bank digital currency cross-border trial, “in what could be another step towards less of the world’s oil trade being done in U.S. dollars.” 

The announcement on June 4 came from the Switzerland-based Bank for International Settlements [BIS], an international financial institution owned by member central banks. It means that Saudi  central bank has become a “full participant” of Project mBridge, a collaboration launched in 2021 between the central banks of China, Hong Kong, Thailand and the United Arab Emirates. 

Now, add to this Russia’s master plan to create a new BRICS payments system bypassing the dollar altogether.

Thus, the expiration of the US-Saudi deal last weekend is emblematic of a cascading challenge from various quarters to the dollar’s pre-eminence as ‘reserve currency.’ In particular, the end is nearing for the unfettered freedom America enjoyed to print dollar currency at will and living it up far beyond its means and imposing the US’ global hegemony. 

Still more at the India Punchline link

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