Saudi Arabia’s alliance with BRICS is a geopolitical upheaval. She drives a new nail into the coffin of the petrodollar. Bitcoin in ambush.
The origins of the petrodollar
It has been several years now that China and Russia have not accumulated dollars. This trend can easily be observed in terms of the reserves of their foreign exchange reserves.
The quantity of US debt held in reserve by China has continued to melt since 2014. Its stock of Treasuries shrunk by $450 billion. It now stands at 850 billion dollars, the lowest for 12 years.
Russia obviously did the same. More strikingly, Saudi Arabia is also getting rid of its greenbacks. Its “official” reserves have been on the decline for more than three years now:
In other words, Saudi Arabia no longer wishes to finance the American debt. This is connected with the fact that the Saudis no longer exclusively accept the dollar in payment. From now on, China will be able to pay for its oil in yuan.
We are witnessing the end of the era of the petrodollar which allowed the United States to replace gold with paper.
The beginnings of this monetary masterstroke date back to 1945. Back from Yalta, President Roosevelt anchored his cruiser, the USS Quincy, along the Suez Canal. There he sealed an agreement with King Abdelaziz Al Saud. United States military protection from oil energy supplies for 60 years.
This meeting was later called the Quincy pact. George Bush will renew it in 2005. This tacit agreement also includes the American president’s promise not to authorize the creation of a Jewish state in Palestine. Unfortunately for the Saudis, Roosevelt died two months later and his successor Harry Truman proved to be a fierce supporter of the founding of the State of Israel.
Betrayed, Saudi Arabia will still remain in the American bosom. Riyadh needed a powerful ally to counter Egyptian President Nasser. Supported by the USSR, the pharaoh had overthrown the Egyptian monarchy and the Saudis feared that his ideas would be emulated in their kingdom.
But back to the petrodollar. It was in 1974 that the second historic meeting between the Saud family and the United States took place. Henry Kissinger has been Secretary of State since 1973 and is trying to save the dollar from the end of the gold standard. This meeting was the culmination of Kissinger’s Machiavellian plan which has its roots in the Yom Kippur War (1973). The latter pitted Israel against an Arab military coalition led by Egypt and Syria.
Nixon will intervene in favor of Israel, knowing however that such a decision would enrage Saudi Arabia. In retaliation, several OPEC member countries, led by Libya and Saudi Arabia, are stopping their exports to the United States and European nations that support Israel.
In 1974, the price of a barrel had already quadrupled, rising from 3 to 12 dollars. Between 1970 and 1980, the price of a barrel will end up being multiplied by 10! OPEC will even consider denominating its oil in gold for a time due to the brutal depreciation of the dollar in the wake of the abandonment of the Gold Standard in 1971.
International discord reached its peak when Nixon resigned on August 9, 1974 and his vice-president, Gerald Ford, unleashed the fury of the Saudi king by taking the decision to recognize Jerusalem as the capital of the Jewish state…
In response, Saudi Arabia continues to push up the price of a barrel, without knowing that it is actually playing into the hands of the United States. Henry Kissinger wants expensive oil to strangle Europe which has little of it.
This is part of his plan which is to force Saudi Arabia to sell its dollar exclusively in dollars at a time when the old continent is rebelling by exchanging its dollars in gold.
Kissinger will end up threatening the Saudis to use force to remedy what he then calls “strangling the industrialized world”.
King Faisal heard these drum rolls very clearly and, at the end of 1974, ended up hearing a proposal that he could not refuse…
Washington promises military protection against Israel, unlimited arms sales, backpedaling on the question of Jerusalem and a return of Israel to its 1948 borders.
In exchange for which Saudi Arabia had to commit to two things:
– Sell your oil EXCLUSIVELY in dollars
– Investing surplus dollars in US debt
This is how the petrodollar was born.
King Faisal resigned himself to cooperation in the face of these beautiful promises, international pressure, threats of invasion and, above all, the simultaneous assassination of the two protagonists in the negotiations with the United States. The governor of the Saudi Central Bank Anwar Ali was found dead at the New York Waldorf Astoria hotel and the Minister of Foreign Affairs Omar Saqqaf in Washington.
Both were assassinated on the same day (November 14, 1974). These two emissaries had the mission of resisting the demands of the Americans concerning the sale of its oil exclusively in dollars. King Faisal was assassinated in 1975…
Since then, oil, the blood of globalization, has never ceased to be sold in dollars.
Iraq did try to sell its oil in euros, but it was destroyed for that. Iran, which also refuses to sell its carbon in dollars, has been under embargo for decades. And let’s not talk about Libya or Syria…
Will BRICS adopt Bitcoin?
In 1955, countries from Asia and Africa representing half the world’s population met in Bandung, Indonesia, to develop a post-colonial framework for peace.
This momentum for emancipation will be quickly dissipated by the coups d’état, assassinations and incessant wars of the United States. Nearly 70 years later, the spirit of Bandung was resurrected in South Africa at the BRICS summit.
Historians will certainly write that this summit was a pivotal moment announcing a multipolar world rejecting the petrodollar system altogether.
The BRICS have become powerful enough to refuse the Pax Americana. The objective is clear: to get rid of the dollar which has become over time the main mechanism for the global demolition of the United States.
Usually, the annual summits of BRICS (Brazil, Russia, India, China and South Africa) do not attract attention. But not this year since more than 40 countries have asked to join the group. Representatives from more than 60 countries participated!
China wanted to admit 10 new members, while India wanted 3. Ultimately, six new members were admitted. Saudi Arabia, Iran, United Arab Emirates, Argentina, Egypt and Ethiopia.
Thanks to the integration of Iran, Saudi Arabia and the United Arab Emirates, the BRICS now account for 45% of global oil production and 50% of global natural gas reserves, 65% of coal and 50 % of vital grains such as wheat, rice, corn and soybeans.
And as Henry Kissinger once said: “To control oil is to control nations.” Controlling food means controlling populations”…
In addition to the expansion of BRICS and trade in local currencies, the emergence of the New Development Bank (NDB). The “BRICS bank”. Its ambition is to replace the IMF and propose a new international reserve currency.
Here is what Chinese President Xi Jinping said about the role of the NDB:
“We must take full advantage of the role of the New Development Bank, advance the reform of international financial and monetary systems, and increase the representation and voice of developing countries. »
President Putin was more clear:
“Dedollarization is gaining ground. The US dollar is losing its global status in an objective and irreversible process. »
If commodities are no longer traded in dollars, the dollar will depreciate. As is the unipolar domination of Washington.
The fewer dollars nations keep in reserve, the more the American currency will depreciate. For one simple reason. The fact that central banks around the world place their dollars in US debt allows the Americans to run a gargantuan trade deficit without the dollar collapsing.
The peaceful revolution against the dollar will be felt by America in the form of inflation and higher import prices.
Let us end by saying that the war in Ukraine is not unrelated to the global rebellion against US hegemony. There are fears that military tensions will escalate as BRICS overturns the table.
It is crucial that the world finally has a neutral currency. A stateless currency that serves as a true uncensorable store of value (unlike the SWIFT network, etc.). We need bitcoin.
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