by Turd Ferguson, TF Metals Report: For your holiday listening pleasure, Jim Willie returns for a comprehensive discussion of the petrodollar and how current events around the Arabian Peninsula are a sign of great distress for this monetary scheme.
Again, what is the "petrodollar". The idea was championed by Henry Kissinger in 1973 as a way to create ongoing demand for US dollars by maintaining the pricing of crude oil in dollars only. The effects of this were two-fold:
To create constant demand for dollars...dollars which were now completely unhinged from any gold backing...and this demand would soak up any excess supply of new currency being printed in the US for military and social purposes. To force oil-exporting nations to keep their foreign currency reserves in dollars, thus creating an ongoing demand for US treasury bonds. This constant demand for bonds would help to keep interest rates...and thus the US debt service cost...unnaturally low.
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