Thursday 5 April 2007

USA, Oil, War and the US Dollar

Le Revue Gauche brought this to light in his recent post Petro Dollars and the US Debt
The full story is here at Court

Basically, if you are not familiar with this and you want the short summary:

The World mainly trades oil for US dollars. This artificially boosts the value of the US Dollar, and gives the US a lot of buying power in the world. So, it is in the USA's best interest for everyone to keep trading oil for US Dollars.
If the big oil producing nations switched to trading oil for another currency, then the US dollar would drop drastically and the US would be in big trouble. It would also affect the rest of the world economy, but the US would suffer the worst of it. At very worst it might turn the US into a third world nation as the creditors clamour for their money. The US is in debt over its eyeballs to the rest of the world right now.

So, when I Iraq switched to trading oil for Euros (the US dollar then dropped sharply) , the US invaded them under false pretences (WMD) to take control of their oil. And now Iraq trades in US dollars again and the US dollar has climbed back up a bit.

The US wants to get rid of Chavez in Venezuela because he nationalized oil and instead of selling it for US dollars, he trades it in a barter system for goods and services.

Iran has been trading in Euros instead of the US dollar since 2003. Because of a falling out between the 2 countries and the US embargo against Iran, Iran does not trade any oil to the US now. So, it is no wonder that the US is fabricating the story that Iran is planning on making nuclear weapons. The US wants to solve its problem again by going to war and taking control of the oil in Iran and make it go back to trading in US dollars.

Read the story at Court for all the details on this issue.

What should Canada do to avoid problems with this in the near future? Canada should slowly diversify its holdings to currency from other countries, increase trade with other countries and reduce the amount of US dollars we have. So, when the sh*t hits the fan, we are not dragged down with the US.

1 comment:

Anonymous said...

The sooner canada protects it,s own interests instead of the USA,s the better.
The USA has lost most of it,s credibility with the world over iraq
It,s need for borrowing is insatiable 80% of all borrowed money in the world goes to America

With the baby boomers about to retire, They are heading for another 1930,s crash.

IT seems the American government no longer listens to it,s people

Until they do things will only get worse!