After Iraq, Libya, Iran now Russia wages Petrodollar War
April 29, 2014
The Ministry of Finance (MoF) on President Putin’s order yesterday accelerated the opening of the St. Petersburg Exchange (SPE), where prices for Russian oil and natural gas will be set in rubles instead of US dollars.
Putin’s order regarding the SPE was in direct response to the US placing sanctions yesterday upon Igor Sechin the CEO of the Russian energy giant Rosneft and a nominated board member of the SPE, and of which Deputy Minister for foreign relations, Sergey Ryabkov, had warned: “A response of Moscow will follow, and it will be painfully felt in Washington DC.”
Sechin, was directly threatened by the Obama regime earlier this month due to his October 2013 remarks at the World Energy Congress in Korea where he called for a “global mechanism to trade natural gas” and went on suggesting that “it was advisable to create an international exchange for the participating countries, where transactions could be registered with the use of regional currencies”.
Sechin, as one of the most influential leaders of the global energy trading community now has the perfect instrument to make this plan a reality with the SPE where reference prices for Russian oil and natural gas will be set in rubles instead of US dollars and could literally destroy the petrodollar.
As we reported earlier already Russia and India are planning to remove the Dollar, meanwhile many speculators believe that the Yuan may already have become a de facto reserve currency. Also to be noted is the epic $30 Billion Oil Pipeline undertaken by Russia, India, China that could shift the Geopolitical balance.
The use of this “Financial Nuclear Weapon” (the sale of oil in a currency other than the US dollar) which was previously deployed by Saddam Hussein, resulted in the total destruction of Iraq, but it failed to deter other countries angry with the highhandedness of the US.
Libya made another attempt and it resulted in the destruction of the country and the brutal murder of its leader Muammar Gaddafi.
Next was Iran. The US and the global financial war party found it much more difficult to isolate and annihilate Iran, even when it was threatened with outright nuclear attack by US and Israel. And in spite of unprecedented sanctions against Iran (which constitute economic warfare and are war crimes in itself), Iran stood defiant.
The leading members of BRICS (Brazil, Russia, India, China and South Africa) Russia and China restrained themselves so as to preserve global stability.
However, the war party faction of the US took such restraint as weakness and went on a spree of regime change throughout the world to undermine the growing strength of BRICS.
The “straw that broke the camels’ back” was the unbridled and reckless coup against the elected President of Ukraine by US and NATO and orchestrated by the US State Department and led by the war-monger Victoria Nuland, who openly admitted that the US had disbursed through such organizations as the National Endowment for Democracy (NED) over $5 Billion to facilitate the coup. Further to this just a couple of days back as reported by Bodhita US backed elite ‘Rape-Murder’ Alpha Squads were captured in Ukraine.
Critical to understand about the current Ukrainian Crisis, is that it has “absolutely nothing” at all to do with either Ukraine or its people, but should be understood for what it really is…a “sledgehammer” the US is attempting to use against Russia to prevent the opening and expansion of the SPE.
By perpetually expanding the US money supply, it’s important to note, America’s standard of living for its elite classes increases as well. The only problem with this situation is that the only way that it can be sustained is if the demand for the dollar and for US debt securities remains consistently strong.
Grasping this last point is extremely important. For if the artificial global US dollar demand, made possible by the petrodollar system, were ever to crumble, foreign nations who had formerly found it beneficial to hold US dollars would suddenly find that they no longer needed the massive amounts that they were holding.
This massive amount of dollars, which would no longer be useful to foreign nations, would come rushing back to their place of origin… America.
Obviously, an influx of dollars into the American economy would lead to massive inflationary pressures within their economic system and collapse it, along with that of the EU too.
It is difficult to overstate the importance of this concept as the entire American monetary system literally hinges on this “dollars for oil” system. Without it, Washington would lose its permission slip to print excessive numbers of dollars.
With thousands of NATO-backed Romanian troops now moving to the Ukraine border, along with British and French fighter jets now being deployed to Lithuania and Poland to join their recently arrived US military allies, it cannot be ruled out that the US will attempt to start a war with Russia in order to protect their petrodollar scheme.
In spite of the fact that all Russian military forces have returned to their permanent bases and Minister of Defense Sergei Shoigu assured his US counterpart Secretary of Defense Chuck Hagel yesterday during an hour long phone conversation that Russia had no intention of invading Ukraine, Moscow has become increasingly “alarmed” by the combined US-NATO military buildup on its borders that Minister Shoigu called “unprecedented”.
As for the Ukrainian people themselves being used as pawns by the US against Russia in this “petrodollar war”, their lives are quickly turning from despair to outright misery as they are forced to swallow the “bitter pill” being forced upon them by the International Monetary Fund (IMF) which is forcing their fuel and energy costs to skyrocket and taxes being raised on everything from alcohol to tobacco, not to mention the tens-of-thousands of public jobs being made redundant (layoffs and firings) and the nearly 5% cut in payments to pensioners.
Even worse for these “US Pawns”, wages now in Ukraine are, as a rule, not enough to feed a family, and the devaluation of their currency will make it totally impossible for these people to absorb these costs.
On the other hand, Western currency speculators will be able to profit from fluctuations in Ukraine’s currency and multinational corporations stand to benefit from privatization of those state assets that haven’t already been sold off.
It is critically important to note that back in 2008, when the US brought the world to the very brink of total economic collapse, then Deputy Prime Minister Dmitry Medvedev warned that Russia should seize opportunities created by the weak US dollar. “Today, the global economy is going through uneasy times,” he said. “The role of the key reserve currencies is under review. And we must take advantage of it.”
Six years later that is what Putin is doing…nobody can say that they weren’t warned.