astrallite
Chieftain
- Joined
- Jan 11, 2012
- Messages
- 67
http://www.nytimes.com/2016/04/16/w...allout-if-congress-passes-9-11-bill.html?_r=0
Looks like there's a current bill in the Senate that would allow the victims and families of survivors of 9/11 to sue foreign governments that may have funded the 9/11 attacks. In response, Saudi Arabia is threatening to pull the plug on the very system that's backstopped the U.S. Dollar since 1975.
As we all know, the Apollo program, the Vietnam War, and War on Poverty during Lyndon Johnson's "Guns & Butter" Administration of the 1960s caused extreme stress on the Bretton Woods global financial system and forced the G8 countries to dump gold in the London Gold Exchange to defend the dollar during the 1960s. This bandaid finally collapsed when the member countries withdrew from the London Gold Pool, Charles DeGaulle famously sent the French Navy to New York Harbor demanding its gold, and Richard Nixon was finally forced to close the "Gold Window" in 1971.
Richard Nixon's Secretary of State, Henry Kissinger, devised a plan in 1973 to stop the bleeding of the dollar. Saudi Arabia agreed to sell oil only in dollars in late 1973 in exchange for military protection, and by 1975, all of OPEC (once America's rival in the 1960s) followed suit and agreed to sell oil only in dollars. The U.S., once the world's largest creditor nation and manufacturing capital of the world, ran trade surpluses throughout the 20th century until 1977. Since then, the U.S. has managed to run larger and larger trade deficits without a corresponding increase in inflation due to the "petro dollar system" where nations around the world have to buy dollars in order to buy the oil necessary to run their economies.
However, tensions between the Obama Administration and Saudi Arabia over the Iran deal, not going to war over the Syrian Red Line, has been straining this system recently (although John Kerry states the Iran deal is actually a pivot to defend the dollar as the reserve currency, we'll see how well that plan works out). It looks like this 9/11 bill might be the straw that broke the camels back. If the Saudis break for it, dump their treasuries and start selling in other currencies, and OPEC follows suit, will it be the end of the petrodollar? It also appears both Hilary Clinton and Bernie Sanders support this bill.
Looks like there's a current bill in the Senate that would allow the victims and families of survivors of 9/11 to sue foreign governments that may have funded the 9/11 attacks. In response, Saudi Arabia is threatening to pull the plug on the very system that's backstopped the U.S. Dollar since 1975.
As we all know, the Apollo program, the Vietnam War, and War on Poverty during Lyndon Johnson's "Guns & Butter" Administration of the 1960s caused extreme stress on the Bretton Woods global financial system and forced the G8 countries to dump gold in the London Gold Exchange to defend the dollar during the 1960s. This bandaid finally collapsed when the member countries withdrew from the London Gold Pool, Charles DeGaulle famously sent the French Navy to New York Harbor demanding its gold, and Richard Nixon was finally forced to close the "Gold Window" in 1971.
Richard Nixon's Secretary of State, Henry Kissinger, devised a plan in 1973 to stop the bleeding of the dollar. Saudi Arabia agreed to sell oil only in dollars in late 1973 in exchange for military protection, and by 1975, all of OPEC (once America's rival in the 1960s) followed suit and agreed to sell oil only in dollars. The U.S., once the world's largest creditor nation and manufacturing capital of the world, ran trade surpluses throughout the 20th century until 1977. Since then, the U.S. has managed to run larger and larger trade deficits without a corresponding increase in inflation due to the "petro dollar system" where nations around the world have to buy dollars in order to buy the oil necessary to run their economies.
However, tensions between the Obama Administration and Saudi Arabia over the Iran deal, not going to war over the Syrian Red Line, has been straining this system recently (although John Kerry states the Iran deal is actually a pivot to defend the dollar as the reserve currency, we'll see how well that plan works out). It looks like this 9/11 bill might be the straw that broke the camels back. If the Saudis break for it, dump their treasuries and start selling in other currencies, and OPEC follows suit, will it be the end of the petrodollar? It also appears both Hilary Clinton and Bernie Sanders support this bill.
