How Does the US Empire Control the World? Petrodollars Rule, Ok! (Part 3)

15. Bank Fraud before 2008 Was Punished
16. Crime and Corruption in 2008 with No Penalties
17. Petrodollar System a Disaster for 3rd World
18. Huge US Military Build-up
19. Energy Wars: Unocal Pipelines through Afghanistan
20. Energy Wars: Pipelines through Syria
21. Energy Wars: Iraq Challenges the Petrodollar System
22. Energy Wars: Petrodollars and Libya
23. The Financial Battle Between the US Empire and Russia and China: Can there be an Alternative to the Dollar as a Reserve Currency?THE PETRODOLLAR SYSTEM: APPENDIX
A1. Multinational Oil Companies and OPEC Agree to Fix World Oil Prices and Oil
A2. Who Are the Winners in this New System of Petrodollars?
A3. “Australian” Banks Are a Foreign-Owned Monopoly15.
Even in the recent past bankers have been jailed in the US as a result of a series of failures by banks. In the 1980s and 1990s about one third of the 3,234 Savings & Loans Associations in the US failed. Government agencies closed 747 failed institutions nationwide. In 1996, the General Accounting Office estimated the total cost to be $160 billion, including $132.1 billion taken from taxpayers.(41) As a result more than 1,000 bankers were convicted of criminal offenses by the Justice Department.(42)There were at least two reasons for this high volume of convictions. First, there were numerous criminal referrals from regulators to government prosecutors. Second, there was a much tougher framework of banking laws. William Black, who led the Savings and Loans litigation for the government, explained that these two crucial elements have been missing in the wake of the 2008 crisis. There have been no criminal referrals by regulators to the government prosecutors, and since the Clinton administration, there has been a much deregulation of the banking industry. Black insisted that “deregulation was bound to produce widespread fraud.”(43)

Today two reasons are given for the absence of convictions after the 2008 Global Financial Crisis (GFC). One is the difficulty in identifying one or more persons for decisions taken throughout a firm.(44) According to an article in The Economist:

“Although the bosses may create or perpetuate a culture in which those lower down the ranks feel entitled or expected to abandon morality, there is seldom a chain of e-mails or other direct instructions that actually advocates wrongdoing.”(45)

A second reason, also from The Economist, is that to have a healthy capitalist system, people need to take risks, even the risks of going bankrupt. “In capitalist societies where risk-taking is seen as a necessary part of business, it is not actually illegal to run a bank, or any other company, into the ground.”(46) It is hard to believe that anyone could publicly give this as a reason for the lack of prosecutions. Why? Because the governments in both the US and the UK, bastions of capitalism, put billions of taxpayers money into preventing the giant banks from going bankrupt, and forced other governments to do the same. How is this support for “a healthy capitalist system”?

Not only was there almost certainly illegal activity behind the global financial crisis of 2008, but the idea of preventing bankruptcy breaks the iron law of capitalism, the survival of the fittest. Capitalist competition removes the weak through bankruptcy, leaving only the strong to survive. As explained above in 1.4 and 1.5, we do not really live within a traditional capitalist framework. In a truly capitalist system, there should be no monopoly control of the sort exercised by the major US banks and oil companies. Too big to fail has nothing to do with capitalism. Too big to fail means that the banks control the government and they can force it to save them from the fate faced by 99% of the other capitalist enterprises.

An article in the Guardian explains that in fact there has been a complete lack of will on the part of government prosecutors in the US to investigate the actions of the big banks. In other cases the government can authorize wiretaps, National Security Letters, an aggressive form of subpoena that can get almost any electronic record. There are also special prosecutors and grand juries like the one used to pursue Julian Assange.(47) When we see what tools are available to the US government, it is a barefaced lie to say that there is no trail of evidence that could lead to the conviction of the senior officers of these banks. If you start at the bottom and encourage these small fish to give evidence on those above them, you can get the big fish.

“A reasonable list of prosecutable crimes committed during the bubble, the crisis, and the aftermath period by financial services firms includes:securities fraud, accounting fraud, honest services violations, bribery, perjury and making false statements to US government investigators, Sarbanes-Oxley violations (false accounting), Rico (Racketeer Influenced and Criminal Organisations Act) offences, federal aid disclosure regulations offences and personal conduct offences (drug use, tax evasion etc).There is also evidence from civil lawsuits that senior executives were directly involved in selling securities whose prospectuses allegedly contained lies and omissions.”(48)
Officials who could be charged for 2008 crisis including Ben Bernanke and Henry Paulson.

We might wonder when Wall Street knew about the bubble which took most of us by surprise in 2008. It seems that in 2004 a man named Howie Hubler at Morgan Stanley first started to bet against the worst securities with the approval of his management. The only way to make money betting against a bubble is when it unravels. “We therefore know that many on Wall Street realised there was a huge bubble by late 2006, because that’s when they started massively betting on its collapse.”(49) People must realize that Goldman Sachs made billions of dollars by betting against the very same investment products, mortgage-backed bonds that it had been making billions selling only a year before.

“Almost all the prospectuses and sales material on mortgage-backed bonds sold from 2005 until 2007 were a compound of falsehoods.And as the bubble peaked and started to collapse, executives repeatedly lied about their companies’ financial condition. In some cases, they also concealed other material information, such as the extent to which executives were selling or hedging their own stock holdings because they knew their firms were about to collapse.”(50)

The hedge funds also took part in the feeding frenzy as the bubble of subprime mortgage-backed bonds began to burst. “Major hedge funds including Magnetar, Tricadia, Harbinger Capital, George Soros, and John Paulson made billions of dollars each by betting against mortgage securities as the bubble ended, and all of them worked closely with Wall Street in order to do so.”(51) There can be little doubt that too big to jail means that the banks and their cousins in the hedge funds control the US government. There is absolutely no reason for the failure to begin prosecutions other than the reluctance of the Federal authorities to do so.

The increase in the oil price in the 1970s was a complete disaster for the 3rd world. Prices for the exports fell, money had to be diverted from industrial and agricultural development to pay for oil. Many were forced to take loans which they later defaulted on, opening them up to austerity demands.The recent disaster in Greece is just the first West European country to face bank forced privatization and austerity.

Less-developed countries in the « Free World » suffered in several ways during and after the Energy Crisis in the early 1970s. Under the Petrodollar system, for any country to buy oil, they needed US dollars. There are two ways countries can get requires dollars. One way is for countries to export goods and services for dollars. However the prices they got for the export of their raw materials fell sharply in the global recession of 1974–75, itself caused by the massive increase in the cost of crude oil. This meant that had to divert precious funds from industrial and agricultural development into simply reducing this balance-of-payments deficit.(52)

“If their exports did not cover the cost of imported oil, then the had to get a loan from banks who hold enough dollar denominated assets, like the IMF or other big Western banks. These loans became a disaster for most countries because during the 1980’sthe IMF became a policeman for enforcing the investor-focused policies of Washington and Wall Street banks. IMF rules or conditions embodied in the so-called Washington Consensus rules are designed to be a supranational instrument of US economic policies.”(53)

In desperate need for oil these countries took out loans from Western banks, and many defaulted when the US Federal Reserve raised interest rates. The IMF who promoted these loans then went on to prescribe the austerity measures described in detail above.(54)


Petrodollars allow the US to pour billions of dollars into military equipment and super-computers, construct and maintain more than 700 bases around the world, pay wages of soldiers, mercenaries, spies, intelligence analysts and agents, and bribe officials.

As explained above, the Petrodollar system puts the US in a unique and powerful position no other country can duplicate. The system increases global demand for U.S. dollars. In turn this gives the United States the ability to print or create money, in financial jargon called « expanding its money supply » or « quantitative easing », without risking the usual consequences of inflation or devaluation. It also increases the price of assets denominated in US dollars, such as real estate.

usa 2

Further it allows the US to pend incredible amounts of money on weapons and military operations around the world. For example, in 2011 the total US military budget was officially stated to be $664 billion, while the Stockholm International Peace Research Institute put the figure at $711 billion. These figures are greater than the Gross Domestic Product of 168 of the 188 countries for which data is collected. The expenditure on the military in the US is about the same as the GDP of Sweden or Saudi Arabia, while it is around half of Australia’s GDP of $1,442 billion.

There are usually many different reasons why countries go to war, and few of us ever can know the full inside story. This applies to what might be called the Energy Wars, the most prominent being in Afghanistan, Iraq, Libya and Syria. These Energy Wars can be divided into two types. In Afghanistan and Syria the primary motivation for overthrowing the incumbent governments was that certain international oil and gas companies wanted to build pipelines through their territory which the current governments did not agree to. By contrast, the destruction of the governments in Iraq and Libya arise from the fact that they both were planning to challenge the Petrodollar system itself by selling oil a currency other than the US dollar. Let us begin with the Pipeline Wars.

Afghanistan became important after the collapse of the USSR. One of these new independent countries created out of the old USSR was Turkmenistan. This and other countries around the Caspian Sea are all rich in oil and gas. When the USSR existed, oil and gas went through pipelines to other parts of the USSR or exported to Europe. After independence each country could sell its own oil and gas to new markets. However there was a problem for Western companies who wanted to buy gas and oil from Turkmenistan. It is landlocked, and the two obvious land routes go through Iran and Russia. For Western companies to export oil and gas from Turkmenistan they could not use these avenues, and needed to build pipelines through Afghanistan and Pakistan.

From the 1990s on two pipelines through Afghanistan, one for gas and one for oil, were considered. The oil pipe would go from Turkmenistan to the port of Gwadar in Pakistan. The gas pipe would go to Multan in the middle of Pakistan, with an extension is planned Mumbai, India. In the map below, the yellow-red dotted line marks the location of the oil pipeline, and the grey-red dotted line marks the gas pipeline.The blue-yellow dotted line is the Iran-Pakistan-India (IPI) pipeline which the US has worked hard to stop. Apart from trying to stop Iran exporting oil and gas to anyone, this particular pipeline is the nightmare of US oil and gas companies and the US petrodollar system. Why? Because the country just to the east of India is China. Thus the IPI pipeline could be extended to provide an overland route for Iran to export oil and gas to China. Does this explain why the US has done all it can with CIA agents and drones to destabilize Pakistan? Can you think of anything else?? Further, if such a pipeline existed, nothing could stop China paying for its energy in some currency other than US dollars, a serious threat to the Petrodollar system.

carte pipline 2

There were two companies working to get the contract from Turkmenistan, the seller, and Pakistan, the buyer: BRIDAS from Argentina and UNOCAL from the US. (In 2005, UNOCAL merged its entire petroleum business with Chevron Corporation.) In 1995, both groups claimed to have signed deals with the seller and the buyer, but Afghan authorities had not signed with anyone. In December 1998 UNOCAL withdrew from the pipeline consortium. In January, 1999, Turkmenistan’s foreign minister visited Pakistan, saying the pipeline project was still alive. In February 2001, BRIDAS had talks with leaders in Turkmenistan, Pakistan and Russia. In March, Turkmenistan’s Foreign Minister met with Taliban leader Mullah Omar in Kandahar to discuss the pipeline. Apparently the president of BRIDAS spent eight months visiting tribes along the pipeline route and reportedly had secured their cooperation for the venture.(55) In April 2001, Pakistan, Turkmenistan, and the Taliban signed an agreement to revive the pipeline project. In May, a Taliban delegation signed an agreement with Turkmenistan to buy gas and electricity.

On 7 October 2001 the US and the UK began their invasion of Afghanistan
, called Operation Enduring Freedom. After the US conquest of the capital of Afghanistan, UNOCAL’s advisor Hamid Karzai was appointed Chairman of the interim administration of Afghanistan. On June 16, 2002, even before there was an elected president, Karzai would sign an official agreement with Turkmenistan and Pakistan for a gas pipeline through Afghanistan.(56) As explained by Bruce Gagnon: “The whole reason the U.S. is in Afghanistan and Pakistan today is to deny those pipelines from being routed through Russia, China, or Iran.”(57)

While Syria has significant reserves of oil, the main interest behind the proxy war fought by the US, the UK, Saudi Arabia, Qatar and Turkey against Syria is a pipeline you have probably never heard of. In 2009 the Assad government was asked to sign a proposed agreement with Qatar that would run the Arab Gas Pipeline from its North gas field through Saudi Arabia, Jordan, Syria and on to Turkey, with a view to supply European markets. The clear intention was to transport gas to the EU as competition with and/or replacement for gas from Russia and Iran. The Assad government refused.According to former French foreign minister Roland Dumas, Britain started to plan covert action in Syria that same year.

carte pipeline
Qatar’s Proposed Arab Gas Pipeline

To make matters worse, the Assad government signed two deals with Iraq and Iran for oil and gas pipelines through Syria:

« In late 2010, his government signed a memorandum of understanding with Iraq for the construction of two oil and one gas pipeline to carry gas andoil from Iraq’s Akkas and Kirkuk fields, respectively, to the Syrian port of Banias on the Mediterranean Sea.In July 2011 Iranian officials announced a$10 billion gas pipeline deal between Syria, Iraq and Iranthat would transport gas from Iran’s South Pars gas field, the world’s biggest, through Iraq to Syria. »(58a)


The Iran-Iraq-Syria gas pipeline plan was a “direct slap in the face” to Qatar, the Saudis and Turkey. The following map shows the whole length of the Qatar-Turkey gas pipeline (purple) that Syria rejected, as well as the Iran-Iraq-Syria gas pipeline (red and named Islamic Pipeline on map) which is Syria’s alternative « slap in the face » to Qatar.(58b)

There are other reasons why some countries want to remove the current government in Syria. According to the International Business Times:

« Syria controls one of the largest conventional hydrocarbon resources in the eastern Mediterranean.
« Syria possessed 2.5 billion barrels of crude oil as of January 2013, which makes it the largest proved reserve of crude oil in the eastern Mediterranean according to the Oil & Gas Journal estimate.
« Syria also has oil shale resources with estimated reserves that range as high as 50 billion tons, according to a Syrian government source in 2010. »

Syria’s energy reserves have been known for some time, but it is the preference for an Iranian gas pipeline over the one from Qatar, which is in effect owned by Exxon-Mobil, which tipped the balance against the Assad government.(60) It also explains why Qatar, the Saudis and Turkey, with US support, are the ones involved in the proxy war against Syria. They are the countries who would benefit most from the Arab Gas Pipeline. The central question is: Which company will be able to ship gas to Europe through Syria: Exxon-Mobil or the National Iranian Gas Company?

In the same way the Taliban was overthrown in Afghanistan after they signed a contract with BRIDAS from Argentina instead of UNOCAL for a gas pipeline through their territory, Syria’s Assad is being attacked by the West and Western backed states like Qatar and Saudi Arabia because the Assad government has its own plans for pipelines through its territory. This is why the US Empire wants to break the power of states like Syria and Iraq, so their oil and gas companies can do what they want, as in the old days when these countries were League of Nations « mandates » after World War I.


It is easy to see that by nationalizing Iraq’s oil industry and becoming friends with the USSR, the US would not be happy with the regime of Saddam Hussein. But in 2003 the USSR did not exist any more, and the oil industry had been nationalized 30 years earlier. So what happened? Several writers, including F. William Engdahl, author of The Century of War: Anglo-American Oil Politics and the New World Order and William R. Clark, author ofPetrodollar Warfare, explain the US attack as necessary to protect the Petrodollar system itself. Clark and Engdahl believe the U.S.-led invasion was inspired predominantly by Iraq’s public defiance of the petrodollar system. In 2000, Saddam hit the main pillar of US hegemony, the dollar. He started to sell his oil in euros, instead of dollars.(61)

Since the world is not formally under the judicial sovereignty of the US, it must use either political or military power to force other countries to accept the US dollar as the only legitimate way to buy or sell oil.

According to Clark:

“On September 24, 2000, Saddam Hussein allegedly emerged from a meeting of his government and proclaimed that Iraq would soon transition its oil export transactions to the euro currency. Not long after this meeting, Saddam Hussein began preparing to make the switch from pricing his country’s oil exports in greenbacks to euros. As renegade and newsworthy this action was on the part of Iraq, it was sparsely reported in the corporate-controlled media. (…)
“By 2002, Saddam had fully converted to a petroeuro – in essence, dumping the dollar. On March 19, 2003, George W. Bush announced the commencement of a full scale invasion of Iraq. »(62)

What looks like proof of this account can be found in an article by Carol Hoyas and Kevin Morrison from the London-based Financial Times. On the 5th of June, 2003, they wrote a piece entitled: « Iraq returns to international oil market ». Here’s an excerpt of the story:

“Iraq on Thursday stepped back into the international oil market for the first time since the war, offering 10m barrels of oil from its storage tanks for sale to the highest bidder. For some international companies, it will be the first time in more than a year that they will do business directly with Iraq… The tender, for which bids are due by June 10, switches the transaction back to dollars – the international currency of oil sales despite the greenback’s recent fall in value. Saddam Hussein in 2000 insisted Iraq’s oil be sold for euros, a political move,but one that improved Iraq’s recent earnings thanks to the rise in the value of the euro against the dollar.”(63a)

The reason this account of the invasion of Iraq is not more widely know is that until now few people have understood the importance to the US of the Petrodollar system itself. There were clearly a number of positive results for the US which have come from the invasion, but this is by far the most important.

One of the less well known results of Iraq invasion. Some might think taking Iraq’s gold is no different from piracy.(63b)

Like Saddam Hussein, Muammar Gaddafi had a plan to quit selling Libyan oil in U.S. dollars. He was going to insist that payment be made in a newly created gold-backed “dinar” which would be an African-wide currency to compete with the US “fiat” currency, the dollar. Libya had massive amounts of gold, estimated at 145 tons, and was pushing other African and Middle Eastern governments to follow suit. Gerald Pereira, an executive board member of the former Tripoli-based World Mathaba explained that “Gaddafi’s creation of the African Investment Bank in Sirte (Libya) and the African Monetary Fund to be based in Cameroon will supplant the IMF and undermine Western economic hegemony in Africa.”(64)

John Perkins, author of Confessions of an Economic Hit Man explains the seriousness of Gaddafi’s plan:

“The US, the other G-8 countries, the World Bank, International Monetary Fund, Bank for International Settlements, and multinational corporations do not look kindly on leaders who threaten their dominance over world currency markets.”(65a)

French President Nicolas Sarkozy reportedly went so far as to call Libya a “threat” to the financial security of the world. The “Insiders” were apparently panicking over Gaddafi’s plan. Here is a passage from an article by Alex Newman entitled « Gaddafi’s Gold-money Plan Would Have Devastated Dollar » which appeared on the 11th of November 2011 in « The New American »:

“’Any move such as that would certainly not be welcomed bythe power elite today, who are responsible for controlling the world’s central banks,‘ noted financial analyst Anthony Wile, editor of the free market-oriented Daily Bell, in an interview with RT. ‘So yes, that would certainly be something that would cause his immediate dismissal and the need for other reasons to be brought forward [for] removing him from power.’”(65b)

According to Wile, Gaddafi’s plan would have strengthened the whole continent of Africa in the eyes of economists backing sound money — not to mention investors. But it would have been especially devastating for the U.S. economy, the American dollar, and particularly the elite in charge of the system. “The central banking Ponzi scheme requires an ever-increasing base of demand and the immediate silencing of those who would threaten its existence,” Wile noted in a piece entitled “Gaddafi Planned Gold Dinar, Now Under Attack” earlier this year. “Perhaps that is what the hurry [was] in removing Gaddafi in particular and those who might have been sympathetic to his monetary idea.”(66a)

So, just like Saddam Hussein, the neo-colonial barbarity of the NATO backed « revolution » was a simple consequence of Gaddafi’s decision to attempt to replace the fiat currency of the US dollar with a gold backed currency that would have made Africa a « golden opportunity » for investorsoutside the US dominated central banking system. And what happened to Libya’s 145 tons of gold? For a country which rejected the gold standard decades ago, why does the US still want to get its hands on all the gold it can?


We have seen that now the West has a form of capitalism in which major sectors of the economy are monopolies without real competition. Russia and China are now generally recognized as having changed from socialism to capitalism, and they also have a fair share of monopolies as well. There seems little difference between them. So why is there a conflict between the US Empire and these other capitalist countries?

One must realize that this question is naïve in the extreme. Two hundred years of European history as taught us that capitalist countries always fight each other for territory, markets, resources etc. Just because two countries are both capitalist is no reason to think they are inclined to live in harmony with each other. In fact the reason there have been no major wars between the old capitalist rivals like the US, the UK, Germany, France, Japan and Italy is that they are now all under the control of the US. Since Russia and China are now capitalist countries, history tells us that there will be strong tendencies for there to be a military confrontation between them and the US Empire.

What Hudson and other analysts make clear is that there is a new, financial area of conflict in addition to the usual military stand-off between the US Empire and Russia and China. This takes the form of a plan by China, Russia and the other BRICS countries, India, Brazil and South Africa, to develop an alternative to the US dollar as a means to carry out international trade. This strategy is a clever challenge to the financial control exerted by the US.

Rather than take on the US in open military confrontation, which would almost certainly lead to an all-out nuclear war, China and Russia have decided to fight the US by attacking its chief financial weapon, the US dollar as the only reserve currency. It would seem they are planning to undermine the US without the need to engage in large scale military confrontation. This is of course a dangerous strategy, as Saddam Hussein and Muammar Gaddafi discovered. However Russia and China cannot be overthrown militarily in the same way without serious if not catastrophic results for the US itself. So the US overthrew the government of the Ukraine to challenge Russia at its borders, and funds Islamic militants to create conflict inside Russia itself. It tries to pull countries like Burma and Thailand away from China and supports Islamic militants in China as well.

Given the terrible consequences caused by the Petrodollar system for the rest of the world, the end of this suffocating debt and the self-serving policies dished out by the US banks can only be a good thing for the rest of the world, including the majority of the people in the US itself. Some might say that there is no right or wrong side here. What makes Russia and China « better » than the US Empire?

There are two answers to this question. First, neither Russia nor China have a capacity to project their military power far beyond their borders, even if they wanted to. The US has 10 nuclear powered super carriers and over 700 military bases around the world. Russia and China have virtually no foreign bases and only one aircraft carrier each. There is only one superpower in the world, the US. Russia and China can do a good job of defending themselves from US attack, but they can pose no military threat to the rest of the world now or in the near future.

Second, as explained in section 10 on Privatization, the « development policy » of the IMF and the World Bank is to force 3rd world countries to privatize any infrastructure they want, for water, electricity, telecommunications, health care, etc. This is not how the West developed its infrastructure. But the Western banks now insist that these underdeveloped countries « develop » only in the way which primarily benefits Western investors. As Hudson explains, « the U.S. promotion of neoliberalism and austerity is a major reason propelling China, Russia and other nations out of the U.S. diplomatic and banking orbit. »(67b) Since neither Russia nor China have anything like the military or diplomatic power of the US, they are not in a position to dictate policies to other countries. Without the US superpower, the world would become « multi-polar », with a number of regionally powerful countries like Russia, Germany, China, Japan, Indonesia, India, South Africa, and Brazil. Under such a system, all countries would be better off than they are now. And, like it or not, the US Empire cannot last forever. There Is No Alternative, as Margaret Thatcher said. When the US Empire disappears, we are just going to have to make the best of it we can.

A1. Multinational Oil Companies and OPEC Agree to Fix World Oil Prices and Oil
A2. Who Are the Winners in this New System of Petrodollars?
A3. “Australian” Banks Are a Foreign-Owned Monopoly

About the same time the dollar changed to a fiat currency there were three agreements in 1971 and 1972 between the OPEC countries and the major Western oil companies which eventually resulted a 400% increase in the price for crude oil by 1975. This dramatic change is now known as the Energy Crisis. At the time this sudden price increase was blamed on the OPEC countries themselves, but authors such as Michael Tanzer suggest that the oil companies were not displeased. Their profits went up and the blame could be put on the countries in OPEC.(67) Further Tanzer reveals that in 1971 the US Justice Department removed the long-standing US antitrust rules for the major oil companies so they could negotiate together against the OPEC countries.(68) Thus the agreements of 1971-1972, which now form the basis of the power of the US Empire, were actually organized by the two principle beneficiaries, the oil majors and the US government.

The effect of this ruling by the US was to officially sanction the oil companies forming a monopoly when dealing with OPEC. There had been laws against monopolies, cartels or « trusts » in the US since the early 1900s, but from this point on the laws were not to be applied to the oil companies. It also meant the oil companies could work as a monopoly when dealing with consumers of oil. In effect this continued the agreement negotiated in Achnacarry, Scotland in 1928 between Standard Oil of New Jersey, Royal Dutch Shell and British Petroleum to fix market shares to the level they were in 1928. It eliminated price competition because the majors set the price for the whole world on a higher cost area such as the Texas Gulf.(69) Thus oil from low cost areas like Saudi Arabia would be sold at an inflated price fixed by all companies. At the moment Brent crude from the North Sea is the benchmark for two thirds of the worlds internationally traded crude oil supplies. North Sea oil and other high cost sources can compete with oil from cheaper sources because Brent crude is the benchmark.

The obvious winners in this new system are the major oil companies, the major US banks, and the US government .

« One consequence of the directed recycling of these petrodollars into London and New York was the emergence of American banks as the giants of world banking, paralleling the emergence of their clients, the Seven Sisters oil multinationals, as the giants of world industry. The Anglo-American oil and banking combination so overwhelmed the scale of ordinary enterprise that their power and influence seemed invincible. »(70)

It is important to name the winners as they are quite well-known. The Seven Sisters referred to by Engdahl is the name given to the oil giants in the 60’s.

The seven major oil companies in the world today are:
BP (British)
Chevron (Standard Oil of California+Texaco+Gulf) (US)
Royal Dutch Shell (British/Dutch – from Royal Dutch+Shell)
Esso/Exxon (Standard Oil of New Jersey+Mobil+Standard Oil Company of New York)
Saudi Aramco (Saudi Arabia)
Total SA (France)

The major US banks are:
JPMorgan Chase
Bank of America
Wells Fargo

The top four UK banks are:
Lloyds Banking Group
Royal Bank of Scotland Group


The major US and UK banks might be seen as « foreign » banks, but this hides the real story of banking in Australia. The big four Australian banks are ANZ, Commonwealth, NAB and Westpac. However, the same four « foreign » banks turn out to be the top four shareholders in each of the four Australian banks: HSBC, JP Morgan, National Nominees, and Citicorp. Furthermore, HSBC, JP Morgan, National Nominees and Citicorp all frequently show up together among the top 5 or top 10 shareholders in many Australian publicly-traded companies.It would be naive to think that these « foreign » banks which are the largest in the world have no influence over the « Australian » companies they have invested in. For example, the top 20 registered shareholders hold 52.42% of Westpac’s ordinary shares—and that’s a controlling stake.(71)

And do these banks compete with each other? According to a 2012 report by the International Monetary Fund, the big four control 88% of residential mortgages and 80% of deposits. How can anyone deny these banks work as an internationally controlled monopoly which has never been challenged by any government? Can anyone imagine that the people who run these banks in New York or London are worried about a challenge from the Australian Competition and Consumer Commission?

Further Reading:

William R. Clark, (2005) Petrodollar Warfare: Oil, Iraq and the Future of the Dollar, New Society Publishers (

Jerome R. Corsi. « Putin: ‘The petrodollar must die’. On mission to reduce global role of U.S. currency », Whistleblower/WND Weekly, Aug 15, 2014 (

Tyler Durden. “Why It Really All Comes Down To The Death Of The Petrodollar (

F.W. Engdahl, (2004) A Century of War: Anglo-American Oil Politics and the New World Order, London: Pluto

Mahdi Darius Nazemroaya. (2012-01-31) “Currency Warfare: What are the Real Targets of the E.U. Oil Embargo against Iran?” (

Jonathan Nitzan and Shimshon Bichler, (2009) Capital as Power. A Study of Order and Creorder. RIPE Series in Global Political Economy. London and New York. Routledge.

Guido Giacomo Preparata. “Of money, heresy, and surrender – Part I: The ways of our system, an outline, from Bretton Woods to the financial slump of 2008” (

Jerry Robinson. « Preparing for the Collapse of the Petrodollar System »

Peter Dale Scott. (2011) “The Libyan War, American Power and the Decline of the Petrodollar System” (Document:The_Libyan_War,_American_Power_and_the_Decline_of_the_Petrodollar_System)

David E. Spiro(1999), The hidden hand of American hegemony : petrodollar recycling and international markets. Ithaca, NY : Cornell University Press.


52. Engdahl, F.W., A Century of War: Anglo-American Oil Politics and the New World Order. London: Pluto, 2004, ISBN 0-7453-2309-X, p.162ff.
61. index.asp?id=252 , see: Dollar Hegemony.
68. Michael Tanzer, The Energy Crisis, New York, Monthly Review Press, 1974, p. 125.
69. Ibid, p. 123.70. Ibid, p. 26
70. Engdahl, F.W., A Century of War: Anglo-American Oil Politics and the New World Order. London: Pluto, 2004, ISBN 0-7453-2309-X, p.162ff.


How Does the US Empire Control the World? Petrodollars Rule, Ok! (Part 2)


We all know that the world has changed dramatically since 1971. However even few of the opponents of the now all powerful US Empire realize that most of what we have seen in the last 40 years can be traced back directly to the introduction of the Petrodollar system. In what follows we examine many of the consequences we all live with today. The topics to be discussed in Part 2 are:

1. Dominance of Banks and Finance Capital
2. The Dominance of Finance over Production of Things
3. Examples of Traditional Capitalism and the New Financial “Entrepreneurs”
4. The Dominance of Borrowing Over Saving
5. Marx and Classical Economics on Earned and Unearned Income
6. Is There a Return to Serfdom in the Capitalist World?
7. Dominance of US Banks Over Countries and their Leaders
8. The Change in Investment Strategies by International Investors
9. Rapid Concentration of Wealth
10. Global Push for Privatization
11. Global Push for Low Tax and Austerity
12. Global Push for “Trade” Agreements
13. Increase in Speculation
14. Speculation against Currencies as Economic Warfare


The huge supply of cash held by monopoly banks of the West is not invested in production but is used instead for creating financial “products”, assets that can be sold, such as securities, loans, bonds, options, futures and derivatives. The aim of the banks is to turn the economic surplus of all countries into interest payments to the financial sector. The usual way we understand capitalism is that companies invest money in the production of things to make a profit. Much of what banks do now is quite different from this. They create financial “products” which they can sell to make a profit. We will see that this is actually a drain on the capitalist part of the economy, the production of things. It also results in a push for privatizing public assets rather than more investment in the production of things.


Every day we hear about the economy on our media. The focus of attention is always on the world of “finance”, the world of stocks, bonds, futures, currency trading, etc. This is the paper economy of the world of finance, the economy of “Wall Street”. Of course there is another side of the economy that is not part of the financial system as such, called “Main Street”. This is the production of things to be used by you and me in our daily lives. So the production of cars, tyres, wheat, bread, clothes, houses, roads, coal, steel, computers etc. make up the economy of things. These two are connected, because the ownership of the economy of things takes the form of the paper world of finance and related laws.

The huge supply of cash held by monopoly banks of the West is no longer invested in the production of things as it was earlier in the century. Rather it is used in creating financial “products”, such as securities, loans, bonds, options, futures and derivatives to be sold to investors. In the vastly expanded financial world created by the Petrodollar system, the financial markets have become more important for the wealthy than the older economy of industrial and agricultural production.The growth of the paper economy of finance is one of the main reasons that the wealthy have been able to increase their percentage of the national wealth since the 1970s.

Today the “success” or “failure” of our “economy” is measured by the money made by the corporations and banks. The media never tells us how many cars have been produced this year, how many houses have been built. Reports about the “economy” are only concerned with the profits of the banks or corporations. In other words, the focus of their reporting is on the world of finance. But who really cares about the world of finance? Only the people who have their money in the financial world. The more money they have, the more interest they have in how their money is going. And who has the most money invested in the world of finance? Only the very wealthy, the top 1%, or even the top 0.01%.

One of the best examples of a capitalist success story is Henry Ford. He built his first automobile in 1996 and helped to found at least two companies to manufacture automobiles, The Detroit Automobile Company and the Henry Ford Company. In 1902 he formed a partnership with Alexander Malcomson to produce automobiles, and this was later reincorporated as the Ford Motor Company. In 1908 the famous Model T was introduced and the rest is history.

Ford did not invent either the automobile or the assembly line method of production. His real “invention” was an approach to manufacturing automobiles: mass production of inexpensive goods coupled with high wages for workers. His commitment to systematically lowering costs resulted in many technical innovations. His cars were simple to drive, cheap to repair. They were relatively inexpensive and the price fell every year.(20)

An example of the newer type of “entrepreneur” is the Australian Alan Bond, who bankrolled several challenges for the America’s Cup, which his syndicate won in1983. His beginnings were just as humble as Henry Ford’s, but he began his success in property development. He later controlled the brewing company Castemaine Tooheys, and invested in gold mining, television and airships. In 1987, Bond paid $1 billion for the Channel Nine network from Kerry Packer.

What did Bond produce? He produced the Bond Corporation, a financial structure which sold shares to investors. The Bond Corporation used this money to acquire assets which in turn paid dividends to investors in Bond Corporation. It was no accident that Bond was interested in the America’s Cup. Racing yachts is the sport of bankers and through his contacts in this field he made useful contacts with bankers in New York that could lend him money for his takeovers. Bond is still revered in Australia as being a successful “entrepreneur”.

images 6
Bond Centre in Hong Kong
Built in 1887 and sold to Lippo Group in 1988

However Bond was not a traditional capitalist like Henry Ford. He used his access to loans as a way to cobble together a company whose only “product” was shares to be sold to investors. As often happens with such a company, in 1992 Bond was declared bankrupt after failing to repay a A$194 million personal guarantee on a loan. His debts reportedly totaled A$1.8 billion, but creditors only got A$0.005 per dollar. In 1997 he was sentenced to seven years in prison for using his controlling interest in Bell Resources to siphon off A$1.2 billion into the coffers of Bond Corporation.(21)


There are two very different kinds of financial activity. This difference is conveniently ignored in the mass media. Both types of activity are aimed at using money to make more money in the paper economy of finance, but the methods are totally different. The more traditional kind of “making money” in finance involves buying and holding of shares of stock in a corporation in anticipation of income from dividends and capital gains, as the value of the stock rises. To invest in this way one must save or otherwise accumulate money to purchase stock which pays dividends and might increase in value over time.

Since the introduction of the Petrodollar system there has been a massive increase in a very different technique described in financial jargon as leveraging, a US term, or gearing, in the UK and Australia. To make money by “leveraging” or “gearing” is to borrow money to buy an asset with the expectation that the price of the asset will gain more than the cost of the loan, making more money for the person borrowing the money.So people are encouraged to borrow money to buy investments in the hope their value will rise. In Australia people are buy houses in this way, described in financial jargon as negative gearing.

As long as interest rates are low and prices keep going higher, all is well. But in fact these conditions are not certainties. If the price of the asset, like a house, falls, eventually the value of the asset will be less than the value of the loan. If interest rates rise, eventually the investor will have to pay out more than the asset is actually worth. In either case, the investor, but not the banks, will loose money. People have been allowed to forget that the Great Depression of 1929 was caused by the fall of assets bought with borrowed money. There is absolutely nothing to stop this happening again, and critics of the current financial system insist that it is only a matter of time until it does.(22)


Michael Hudson has written about this significant change in our economy. Today we understand a countries’ national income as the Gross Domestic Product (GDP) which treats the income from finance, real estate and insurance in the same way as income from wages and industrial profits. Marx, as well as other major classical economists like Adam Smith and John Stuart Mill, considered the income from finance and real estate as unearned, compared with the earned income from wages and industrial profits, profits made from making the things we use in our daily lives. Marx though that capitalism would remove the role of banks charging interest and landowners collecting rent. Hudson explains:

“But history has not worked out the way Marx expected. He expected every class to act in its own class interest. That is the only way to reasonably project the future. The historical task and destiny of industrial capitalism, Marx wrote in the Communist Manifesto, was to free society from the ‘excrescences’ of interest and rent (mainly land and natural resource rent, along with monopoly rent) that industrial capitalism had inherited from medieval and even ancient society. These useless rentier charges on production are faux frais, costs that slow the accumulation of industrial capital. They do not stem from the production process, but are a legacy of the feudal warlords who conquered England and other European realms to found hereditary landed aristocracies. Financial overhead in the form of usury-capital is, to Marx, a legacy of the banking families that built up fortunes by war lending and usury.”(23)

Hudson points out the way that power has been given to banks in virtue of the huge supply of money they get from Petrodollars. He also explains how the way money is tied up in financial “products” works as a drain on the workings of traditional capitalism, the production of things.

“We can see in America and Europe how interest charges, stock buybacks, debt leveraging and other financial manoeuvrings eat into profits, deterring investment in plant and equipment by diverting revenue to economically empty financial operations. Marx called finance capital “imaginary” or “fictitious” to the extent that it does not stem from within the industrial economy, and because – in the end – its demands for payment cannot be met. Calling this financial accrual a “void form of capital.” It was fictitious because it consisted of bonds, mortgages, bank loans and other rentier claims on the means of production and the flow of wages, profit and tangible capital investment.” (24)

In the examples given above, the money made by Henry Ford, a traditional capitalist, is earned income, while the money made by Alan Bond is unearned income. The difference between these to activities is not widely discussed because the “official” understanding of our economic system, devised in the 1960s and 1970s by the “Chicago School” of economics. This is a system of thought which deliberately hides both the simple realities explained by the classical economists and the dangers of an economy which rests on an ocean of debt. There are several other ways to understand our economy, but they are all now considered “old-fashioned” and discredited. Critics of our present economic system like Durden and Hudson work with a totally different, and in fact more traditional frameworks.


In a capitalist society, traditional capitalists acquire a surplus from the sale of commodities their workers have made. Now, in addition to this, a surplus is taken from all people, not just workers, in the form of interest on loans and interest and profits from privatization, as well as the surplus from the monopoly pricing of oil. Many see this is a kind of serfdom where, as in medieval times, peasants had to supply a surplus to their lords simply because the lord was deemed to own the land. The lords had to do nothing in return. This is why they could build elaborate castles and churches and make expensive weapons used to fight each other for land. Toyota produces cars we drive around in. What do banks produce? They give us little plastic cards that make it very easy to get a loan from a bank, usually at a rather high rate of interest. The only “work” they have to do is run a complex computer system to keep track of these loans and interest payments. Banking, not singing rock music, is the perfect example of money for nothing.

In fact traditional capitalists are actually threatened by this financial system unless they are in the position of being monopolies and can dominate the market. What bank is going to take a risk on a new enterprise producing things when they can put their money into low risk loans like housing or those involved in privatization?

In 1970 the US was not only broke and divided, but it was isolated from Europe, USSR and China. When China became capitalist and the USSR broke up into many smaller countries, this allowed the US to increase their influence in these countries. But the introduction of the Petrodollar system shaped the US relations with all other countries. The new system was first applied to Chile after the brutal coup by General Pinochet in September 1973. The economic “reforms” the new government introduced were based on the ideas of Milton Friedman and the Chicago School. These “reforms” included privatizing all industries nationalized by former President Allende, privatizing the social security system, and opening up assents to US investors. As explained by AA these changes were “part of a global trend, as investors everywhere felt shackled by the old statist model of development” which encouraged the local production of goods and import substitution.(25a)

Pinochet_-_Kissinger (1)
General Pinochet meets his supporter Henry Kissinger in 1976

For some time « world leaders » praised the changes Pinochet introduced:

« Initially the economic reforms were internationally praised. Milton Friedman wrote in his Newsweek column on 25. January 1982 about the Miracle of Chile. British Prime Minister Margaret Thatcher credited Pinochet with bringing about a thriving, free-enterprise economy, while at the same time downplaying the junta’s human rights record, condemning an ‘organized international Left who are bent on revenge.' »

However in the last 30 years most commentators have see the changes as a disaster for Chile. Consider the following graph which compares the rates of growth in Chile with the average growth in South American countries from 1971 to 2007. (The rate for Chile is in red.) Using this standard measure of economic success – the growth rate of a country – Chile performed below the regional average. Pinochet’s human rights performance was even worse. More than 3000 people were killed and over 30,000 imprisoned and tortured.

The US gained control over other Anglo-Saxon countries and Europe through absorbing or taking over the major banks in these countries. The leaders of these countries were already close to the US in any case, but the creation of the European Union and its banking and currency system tightened the grip of the US banks on European banks and shifted economic policy toward tax cuts, austerity and privatization. The disaster which just overtook Greece was set up by its own politicians and major US banks. The trap into which Greece fell was put into place years ago. The current situation in Europe is described rather graphically by Peter Koenig, an economist and geopolitical analyst. He was also on the staff of the World Bank and has worked extensively around the world in the fields of environment and water resources.

“Europe has been ‘bought’, coerced and manipulated into this humiliation. The European Union is a sham. The European Commission is a deceit. There is not one non-neoliberal country in the entire 28 member European non-union. How is this possible? –A uniform world view whether your label is ‘right’ or ‘left’ – all meaningless.
“Universal election fraud is presented on a silver platter like the severed head of democracy, but nobody wants to see it. It’s like admiring the emperor’s wonderful clothes, not wanting to admit that he is stark naked. We keep talking about democratic elections. Nonsense. There is no democracy anymore as it was crafted 2500 years ago by the minds of the philosophers of Delphi in ancient Greece.Most all and everybody in our western world is buyable.Rare is the politician who isn’t. He won’t last. Money reigns.”(26)

The recent NATO military adventures are another consequence of the tight grip of the US banks over these once independent countries. All the “old” imperialist powers, Spain, the Dutch Republic, the UK, Italy, Germany, France and Japan have now been united under the control of the US Empire. They no longer fight each other as they have for hundreds of years. They now work together as US puppets to control much of the modern world. This is the New World Order.


After World War II, the victors not only sat down together to create an international finance system based on the value of the US dollar being pegged to gold. They also mapped out the investment strategy for the Free World in the face of the devastation created by the war. As explained by AA the policy of US investors at the time was

“…to encourage regimes to develop and industrial base and a prosperous middle class that could sustain stable political authority without creating an opening for leftist movements. (…) The prevailing orthodoxy was that national states could intervene extensively in economic affairs to support and develop productive industry.”(27)
“US investors wanted countries to replace imported goods by goods made in individual countries, which meant that each country would increase their domestic industries.”(28)

The history of Australia after World War II provides an excellent example of this policy. Many companies, often connected to similar companies overseas began to produce cars, televisions, refrigerators and all manner of consumer items. However AA notes that in the 1970s, when the Petrodollar system was established, US investors changed their policies. They wanted to get rid of import substitution and local manufacturing. US economic aid and IMF loans were now to be used as levers to force countries to open up their economies to global markets…(29) Current government policies by all major parties now follow this new directive from Wall Street. Rather than supporting local manufacturers in Australia, it appears the current government couldn’t get rid of them fast enough. Of course the politicians, like the bankers in New York, don’t worry about where the sacked workers will find another job. And if they do find another job, perhaps they won’t be so hostile to the new, lower rates of pay.

Other changes demanded by banks included privatization, subsidy cuts, public sector wage-freezes, and deregulation, known as “structural adjustment”.(30) Countries are now expected to develop export oriented industries instead of import replacement. This too would sound familiar to Australians. As we have seen, US investors began to use debt as a mechanism to incorporate countries into the global economy, and policies contrary to the interests of US investors could be ‘punished’ by capital flight, or ruled out of bounds by global institutions.(31) The result of these new policies is explained by AA as follows:

South America serves as a good example of how the US uses economic ‘force’ to get what their investors want.Big US banks made many significant loans to South American countries in the 1970s. Then the Federal Reserve Chairman Paul Volker decided to make significant increases in interest rates. As a result most Latin American export income was consumed by debt repayments, leaving the region dependent on bailouts from the IMF. However the IMF attached conditions to these bailouts including ‘structural adjustments’ like those used on Chile under Pinochet.The prescriptions of the IMF involved the by now familiar mix of privatization, subsidy cuts, wage restraint, and consummation of the long-term transition to ‘export-led growth’, in which domestic consumption was suppressed so that goods could be produced for export. »(32)

Many people in countries like Australia might think policies like privatization, cuts in government support (subsidies) for pensioners, health care and education, wage restraint and a push for export-led growth are new. They are of course new to us, but they have been the policies of international investors and the IMF for the last 40 years. They have been forced on countries for decades, and now they have arrived in Australia, supported by all major parties. As Koenig explained above, whether the political label of “your” party is ‘right’ or ‘left’, the policies are the same. Every government and every party must have the policies which maximize the profits for international investors.


There has been a rapid concentration of wealth in the last 30 years. In 2014 Oxfam revealed that some 85 of the world’s richest people now had as much wealth as the poorest half of humanity. A few weeks later after this report was published, Forbes magazine updated that estimate to just 67 people. Then, within days, they corrected that estimate on their website to 66 people.(33) In Australia, the top 1% earned 4.8% of the country’s income in 1980. Their share of the countries’ income doubled and grew to more than 9% by 2010.(34)

From a 2013 report by Oxfam:

“Over the last thirty years inequality has grown dramatically in many countries. In the US the share of national income going to the top 1% has doubled since 1980 from 10 to 20%. For the top 0.01% it has quadrupled to levels never seen before. (…) This is not confined to the US, or indeed to rich countries. In the UK inequality is rapidly returning to levels not seen since the time of Charles Dickens. In China the top 10% now take home nearly 60% of the income. Chinese inequality levels are now similar to those in South Africa, which are now the most unequal country on earth and significantly more unequal than at the end of apartheid.”(35)

This concentration of wealth comes from the power of the investors in the financial system. Through access to very large loans, one corporation can buy out, and therefore own, many smaller companies. Over time, fewer and fewer people own a larger share of existing corporations. The chart below shows how 37 separate US banks in 1996 were reduced to 4 in 2009.

image 5

There has been a similar concentration in the ownership of media outlets in the US:

images 4

However nothing new is created other than bigger and bigger corporations, like the Bond Corporation. The system drains wealth from ordinary people and concentrates it in the hands of investors. This process has been facilitated by politicians in all parties and has resulted in increased speculation, corruption, low tax and austerity policies, privatization, and bogus “trade” agreements.

In the first graph given below we see the percentage of the national income of the US which came from the financial industry as a proportion of the national income, the GDP, for the last 150 years. The first peak us just before the stock market crash of 1929. It falls until the end of World War II and increases slowly until the 1980s when it rises much more quickly into higher levels than ever seen before. In the second graph we see the change in the levels of income inequality in the Anglo-Saxon world, where the largest banks are located. The share of the wealth held by the top 1% in these countries fell from the beginning of World War II until the 1970’s when it began increasing in a trend which still continues today.

image 3
Share of US GDP from finance vs share of US wealth held by top 1% over last 100 years.

Clearly as the wealth of the top 1% increases, there is a concentration of a countries’ wealth in fewer and fewer hands. These graphs also show that the increasing wealth of the 1% since the 1970s is due in large part to the growth of the financial sector, the paper economy. Remember that traditional manufacturing has declined in all these countries over the same period.The increasing wealth of the 1% does not come from the production of things via capitalism, but the use of the financial system to turn money directly into more money while producing nothing for the Main Street economy we live in.

There has been a tsunami of privatization of public assets around the world. Some of the things privatized include, banks, rail networks, electricity generation, water and sewerage supplies, telephone companies, as well as a range of activities usually performed by the government, such as running prisons, dealing with the unemployed or disadvantaged, or constructing roads and bridges.

Much has been written about the advantages or disadvantages of privatization, but the focus here will be simply on the role of banks in this process. Suppose a country wants to privatize an electricity generation system. Who are they going to sell or lease it to? Is there anyone on your street, in your suburb, or even in your country who has this kind of money? Of course not. A company may be formed to make a bid, but they must first obtain large loans from banks. How many banks can provide money for such a loan? Only the biggest in New York, London, Germany, or Japan. If they make such a loan, they will demand interest be paid. Second, the people who organize the bid will take money for putting together the offer, and the company created will need to make their own profit as well. Whether the new privatized company delivers better service or not, whether the costs to the consumer fall or rise, the company will make its profit and the banks will get their interest. This is definitely a win for investors. For big banks, privatization is a perfect example of money for nothing.

Banks also play a central role in forcing countries to privatize public services. While countries in the West already have a water and sewerage system in place, many third world countries do not.

« Countries faced with large debts are forced by the World Bank and IMF to privatize water. Water deregulation is a common demand of the World Bank and IMF as part of their loan conditions. In 2000, out of 40 IMF loans distributed through the International Finance Corporation, 12 had requirements of partial or full privatization of water supplies. They also insisted on the creation of policies to stimulate “full cost recovery” and the elimination of subsidies. « (36a)

The following chart shows that countries which approach the World Bank or the IMF for loans to improve the supply of clean water to their citizens have been increasingly forced to accept privatization. In Ghana, the World Bank and IMF policies insisted that water be sold at market rates, so the poor had to spend up to 50 percent of their earnings on water purchases.(36b)


Privatization is one of the reasons Michael Hudson sees the world sliding into a 21st century version of serfdom. Like the medieval lords, the big banks skim money from every transaction of a privatized service. So when you pay your water bill, your electricity bill, you phone bill, some of each payment will go the big banks that made the loans necessary for privatization. Hudson also points out that the economic advances made by the leading industrial nations of the West came from their policy of government-owned infrastructure.

« Government-owned infrastructure provides basic services at low cost, on a subsidized basis, or freely.That is what has made the United States, Germany and other industrial lead nations so competitive over the past few centuries.But this positive role of government is no longer possible under World Bank/IMF policy. »(36c)

In other words, when major Western investors demand developing countries establish privatized rather than public, government owned infrastructure, they are actually holding back their development. This is why third world countries need to be forced to privatize. They know that this policy is not in their best interest. Privatization adds interest rates and other financial charges to the basic cost of the facility, and privatized companies have a history of charging prices as high as the market can bear. As examples he cites Carlos Slim’s telephone monopoly in Mexico and the high costs of America’s health care system. And we noted above that in Ghana the price of water was pushed to absurd levels. This is the reality of privatization throughout the world today.


Slowly, since 1971, the economic policies of the international investors codified by the IMF called the “Washington Consensus” has been compulsory policy for any politician in the West who hopes to enter the parliaments of our democratic system. All must adhere to the dictum of Margaret Thatcher: There Is No Alternative (TINA). This in effect says that no further discussion of these policies is allowed. Talking about alternatives is forbidden. The people who benefit from these policies of course accept this, but should the rest of us?

Most of these austerity policies will be recognized as the kinds of demands made by politicians in all Western countries today. In fact no politicians in any Western country can resist promoting these policies because the banks and the representatives of the US Empire like the IMF enforces them:

1. cut spending on education and health,
2. introduce « user fees » for health and education (user pays),
3. increase the price of public services,
4. reduce government borrowing and debt levels,
5. demand higher taxes on ordinary people and lower government spending,
6. cut the government bureaucracy,
7. use private capital for the development of infrastructure like roads, airports,
8. remove trade and investment rules,
9. promote export-orientated and resource extraction industries instead of industries which primarily serve domestic markets,
10. provide tax breaks and subsidies to export industries,
11. remove tariffs and allow failing firms to go bankrupt,
12. deregulate financial intuitions,
13. privatize national assets like electricity, water, transport, telecommunications,
14. freeze or reduce wages.(36d)

What these policies all have in common is that they increase the profitability of investments in the countries that adopt them. There are many ways government can be forced to adopt these policies by the banks. If a country or state has a loan, this loan has a credit rating set by the three main agencies: Moody’s, S&P, and Fitch. Each has a somewhat different system, but at the top of the rating are “prime” or ‘high grade” loans, and the bottom has ratings like “highly speculative” and “default imminent”. The problem is that recent events have shown that these ratings agencies are actually owned by the big banks themselves, and the agencies are not immune from pressure from the US government. Before the 2008 crash the ratings agencies were giving high ratings for what turned out to be “sub-prime” investments based on home mortgages for people who were known to be unable to pay them. Such investments should have been rated as “substantial risks” but then who would buy them? In the same way, a government that did not do what investors want can have the ratings of their loans downgraded, which means that the interest the government needs to pay will increase. There is no review or appeal against these judgments, as investors take them to be gospel truth.


The wave of “trade” agreements sweeping the West allow for the complete subordination of the governments who adopt them to the demands of the largest multinationals in the West. Some examples include the TPP (Trans-Pacific Partnership) and the TAFTA (Trans-Atlantic Free Trade Area). While they are called « free trade » agreements, the deal with much more than simple trade issues. One central feature of these agreements is the introduction of the Investor-State Dispute System (ISDS) in which corporations can challenge laws and decisions of individual states, but states cannot use this system to challenge actions of corporations.

Instead of convincing or bribing politicians in the West to facilitate their investment plans, agreements like the TPP mean that the companies can simply challenge any political decision or policy using their own brand of “kangaroo” court, in which they write the rules and make all decisions. These agreements amount to enforced deregulation. “Market forces”, that is, the profits of the multinationals, determine what will happen and what will not happen. Why do individual countries accept these agreements so quietly? Behind the agreements stand the monopoly banks. They can speculate against a countries currency, withdraw their investment, raise interest rates, downgrade credit ratings and refuse loans. There Is No Choice for Western governments, even if they wanted to reject them. Of course they are not going to explain this to the voters, as it would reveal that they are not representatives of the people but puppets who represent the big banks. As in the case of privatization discussed above, the biggest banks have the power to make individual countries accept policies which are a disaster for their citizens. Only countries who are under the control of these banks would enter into these harmful « trade » agreements.


In the last 30 years there has been a massive increase in speculation on financial instruments such as foreign exchange, stocks, bonds, and commodities like oil, wheat, etc. Speculation is the practice of engaging in risky financial transactions in an attempt to profit from fluctuations in the market value of an asset. The way to make a profit is simple: Buy low. Sell high. The focus of such speculation is in the area of futures trading. In futures trading a contract is made between two parties to buy or sell an asset for a price agreed upon today, the futures price, with delivery and payment occurring at a future point, the delivery date.

The original use of futures contracts was to mitigate the risk of changes in the price of agricultural products or exchange rate movements by allowing parties to fix prices or exchange rates in advance for future transactions. For a century after organized futures exchanges were founded in the mid-19th century, all futures trading was solely based on agricultural commodities. However since the introduction of the Petrodollar system most of trading on the futures markets is in financial futures contracts—based on such things as interest rates, currencies, or equity indices.(37) The following graphic shows how the huge volume of cash coming to banks from the Petrodollar system since 1973 has changed the nature of futures trading. In 1970 more than 75% of futures contracts were for agricultural products. By 2004, about 75% of such contracts were for financial instruments.

Change in the nature of futures trading from 1970 to 2004.

The massive increase in futures trading has two important consequences. First, a futures contract is in effect a gamble or bet. Now Billions of dollars are tied up in such bets, which is why our current economic system is called a casino. This is one of the ways that money is used for the “paper” economy rather than productive economic activity. Further, such speculation can be used for manipulation of the price of the asset. This is a form of corruption. A market for anything is only “fair” if it is properly regulated, but now the name of the game is deregulation.


One of the many consequences of the Petrodollar system has been the phenomenal growth and acceptance of speculation against individual countries. One analyst has coined the term « monetary terrorism » for these attacks. Two features of the Petrodollar system make these attacks possible. When the US abandoned the gold standard most other currencies followed suit. This means that the value of each currency is not fixed but « floated », so its value is determined by foreign-exchange market mechanisms. Thus the action of the US to « float » the US dollar forced other countries to « float » their currencies as well. The other feature of the new system which facilitates speculation is the buckets of cash in the Western banks.

One of the simplest ways to attack a currency uses the method of « short selling ». The key element in « short selling » is that speculators can sell a currency they do not own but agree to buy at a later time. If the currency falls in value, then speculators make a profit, because they had sold short the currency at a high price, but can repurchase at a lower price.(38) This is of course a gamble, since the speculators will incur a loss if the currency rises in value. However if a large amount of the currency is « sold » in this way, it can itself influence the market and cause the value to fall. If speculators see a time when a currency might be coming under threat their actions can precipitate a fall in its value. After the Wall Street crash in 1929 short selling in a falling market was made illegal in the US. However on 3 July 2007 this restriction was removed by the Securities and Exchange Commission.(39)

In a famous example, George Soros became notorious for « breaking the Bank of England » on Black Wednesday of 1992, when he sold short more than $10 billion worth of pounds sterling. He is said to have made £1 billion profit on this occasion. In December 2015 Soros was the 25th richest person in the world. He is a perfect example of the useless parasites that have grown fat from the Petrodollar system. Only a society which considers the accumulation of money as the greatest human achievement could consider such people respectable.

Floating exchange rates for national currencies and a huge supply of cash that can be loaned to speculators has

« lead to phenomenal growth in speculation against international currencies, which later led to massive economic and social crises in various countries that were speculated against. Examples include the Mexican Peso crisis of 1994-95, the Asian financial crisis of the late 1990s, followed by the Russian ruble crisis. Since the death of the gold standard and the floating of most major currencies we have seen currency speculation increase to an astonishing 98% of all international transactions. This means that« real economic » transactions account for a mere 2% of international transactions, and we truly live in the midst of a global casino. »(40)

15. Bank Fraud before 2008 Was Punished
16. Crime and Corruption in 2008 with No Penalties
17. Petrodollar System a Disaster for 3rd World
18. Huge US Military Build-up
19. Energy Wars: Unocal Pipelines through Afghanistan
20. Energy Wars: Pipelines through Syria
21. Energy Wars: Iraq Challenges the Petrodollar System
22. Energy Wars: Petrodollars and Libya
23. The Financial Battle Between the US Empire and Russia and China: Can there be an Alternative to the Dollar as a Reserve Currency?

A1. Multinational Oil Companies and OPEC Agree to Fix World Oil Prices and Oil
A2. Who Are the Winners in this New System of Petrodollars?
A3. “Australian” Banks Are a Foreign-Owned Monopoly


25a. The WikiLeaks Files (TWF), London, Verso Books, 2015, p. 69.
27. TWF p. 50.
28. TWF pp. 42-43.
29. TWF p. 45.
30. TWF p. 47.
31. TWF p. 53.
32. TWF p. 59.
36d. Some sources on problems with the IMF are:,,
40. Smithy, Wizards of Money, 1999-2002, Ch. 5. Monetary Terrorism,, quoted in; also:


How Does the US Empire Control the World? Petrodollars Rule, Ok! (Part 1)

The petrodollar is the only life support machine left for the U.S. and this is precisely why Washington goes after any country that tries to destroy it.(1)


The United States now exercises control over most of the world and threatens countries it does not directly control. This was not always true. When the US was forced to retreat from Saigon at end of the Vietnam War, it was divided internally and opposed by many European countries who are now its closest friends. While the Chinese embrace of foreign investment and a capitalist economy in the late 1970s and the collapse of the old Soviet Union in 1991 have both helped to change the world we live in today, the most important dynamic behind the consolidation of the US Empire in recent decades has been little understood, particularly by its critics. The US has fought several wars for oil, but this focus on the struggle for oil and gas as commodities has masked much more important developments. The real force that has propelled the US into its present position is not just control of oil and gas, but the control of the money that must be paid for them, known as Petrodollars.

It is impossible to overstate the importance of the Petrodollar system, organized by the US in the 1970s. Thanks to a monopoly price for crude oil and the requirement that crude oil be paid for in US dollars, billions of dollars flow year after year from oil producing countries to the giant US banks. This huge flow of cash supports the three pillars of US power today: the predatory Western financial system, the massive US military presence, and the monopoly price for oil paid for in US dollars.

This article will examine how the Petrodollar system was established and the consequences of this system. Many of the things which are taken for granted in the political and economic world today can be traced back to this system. We will see that it has changed the nature of the capitalism that has existed for at least 150 years. It also throws light on the nature of the conflict between the US Empire and the leaders of the BRICS, Russia and China.

The US has been working to control the world for at least 100 years. In 1900 its chief rival was the British Empire, which had been dominant in the world since its defeat of Napoleon’s France. However, as explained by the Anonymous Author (AA) of Chapter 1 of The WikiLeaks Files, the US had a different strategy than the policy of territorial control used by the previous European empires from Spain and Portugal to the British. The US did not want colonies, but governments that were open to investment by US companies. They wanted access to the capital, labor and resources of all countries.

AA describes the US policy as « liberal internationalism ». It was begun by Woodrow Wilson and continued by Franklin D Roosevelt and his successors. The policy was based on the idea that military, political and economic intervention in other countries is justified if it produces

« a global system consisting of liberal-democratic nation-states, connected by more or less free markets, and ruled by international law. In this world-view, the goal of achieving a liberal world system trumps the commitment to state sovereignty. The US sees itself as the natural vanguard of such a global order, as well as the chief bearer of any right to suppress state sovereignty in the pursuit of liberal goals. »(2)

This international system we now understand as the “Free World” is free because the US corporations, and the corporations of most other countries, are “free” to invest in any and all countries. When they existed, the main opponents of the “Free World” were the “communist” countries of the USSR and later the People’s Republic of China. They refused to allow any capitalist investment by any country within their territory.

For a number of different reasons in the early 1970s the US appeared to lose its dominant position in the Free World. The wealthy US was virtually broke after wasting its money in the Vietnam War which they eventually lost. The ruling elite were also divided by the war. This is why Daniel Elsberg, who released the Pentagon Papers, was and is still seen as a hero in the US, while Julian Assange, Chelsea Manning and Edward Snowden are seen as traitors to be punished by execution. The US elite are no longer divided. They have all agreed to the current US foreign policy, so criticism is not allowed. The actions of all these four people are essentially the same, but the political climate in the US has completely changed.

The other problem the US faced was that by the 1970s its economy was in a very different relative position compared to where it was at the end of World War II. In 1945 the US had the only intact industrial economy in the world. Between 1945 and 1970 the world GDP grew by an average of 4.8% per year, and the total volume of exports rose 290% between 1945 and 1968.(3) But the money wasted during the Vietnam War took vital investment funds from the productive economy.(4) Further the industrial power of the two defeated enemies, Germany and Japan, had grown so much that the US was no longer unchallenged as the dominant industrial power.(5) Just when it seemed the US could loose its dominant economic and political power, the Petrodollar System was introduced and created the conditions for the US Empire we see today.

To understand the way the Petrodollar system works we need to look at how the US dollar serves as a “reserve currency” for international trade.Trade between different nations faces one obvious problem. We know Australia sells coal to China.(6) How is China going to pay for Australian coal? In Chinese money, known as renminbi, the basic unit is the yuan (sign: ¥). But what good are ¥100,000 in Australia, where everything is bought and sold for Australian dollars? If Australia and China always traded goods with each other of the same value over a year, there would be no problem. However in most cases of international trade this does not happen. When we realize that there are over 100 different countries with more than 100 different currencies, it might seem that international trade would be impossible.

Actually this problem was solved over 200 years ago. Trading nations used gold to measure the value of imports and exports, and a trade imbalance was settled with transfers of gold bullion. Then the British Pound Sterling came to be recognized as a “reserve currency” instead of gold because the Bank of England would exchange Pounds for gold at a fixed exchange rate. This meant that trading nations could value their commodities or services in Pounds and pay debts or receive payments from other countries in Pounds because the Pound was “as good as gold”. After the end of World War II, the US dollar replaced the Pound as the world’s reserve currency. It was given this status by treaty following the Bretton Woods Agreement, formulated in July 1944. As a part of this agreement the US agreed to exchange the US dollar for gold at the rate of $35 per ounce of gold.(7)

However in the 1960s the US created more and more money to pay for the Vietnam War and President Johnson’s War on Poverty. This led to a situation in which the volume of US dollars in circulation was greater than its supply of gold. France and a few other countries recognized this and began asking for gold in exchange for US dollars. The US supply of gold dropped from 20,000 tons in 1958 to 8,000 tons in 1970. At this point the US could have continued to honor the gold standard for its currency by re-evaluating the US dollar at a higher exchange rate. It could have continued to exchange its currency for a different quantity of gold.

Instead,the US decided in September 1971 to go off the gold standard. This meant that they would no longer exchange the US dollar for any amount of gold. Tyler Durden of the blog Zero Hedge estimates that in 1971 the exchange rate of US dollars for gold would have altered from the original $35 per ounce to $400 per ounce.(8) Now gold is trading in a range from US$1850 to US$1870 per ounce, and some think it is being artificially forced down by the large US banks. Is gold now worth more than it was in 1944, or is the US dollar worth less?


The US set up the current world wide financial system in 1971 after they abandoned the gold standard and stopped exchanging US dollars for gold. In this new system the US dollar is no longer derives its value from a specific amount of gold, something which has a use or value independently of the financial system. Instead the US dollar became a « fiat » currency. Fiat currency is money which derives its value from government regulation or law rather than something like gold or silver which has non-monetary value. In this case it derives its value from the determination of the US to require any purchase of crude oil anywhere in the world to be paid for in US dollars. The system has been explained as follows: « Today’s money is not backed by gold. It is now backed by nothing at all, except our trust in the monetary system. »(9) However this is a rather superficial assessment of the workings of the US dollar as a fiat reserve currency for world trade. Here we see a more sober account: « This ‘trust’ itself is backed by coercion (the world’s dependency on oil) and ultimately by the US military. »(10) In individual countries a government can enforce the use of its fiat currency by law. There is no such law that covers the world as a whole, so in the end the US must use political and/or military force to make countries use the US dollar for international trade in oil and other items.


The role of reserve currency for the US fiat currency came about because of the Petrodollar system. It was put together during the “oil crisis” or the “Energy Crisis” in the early 1970s. In response to the US move to break the connection between the dollar and gold, the Organization of Petroleum Exporting Countries (OPEC) began discussing the viability of pricing oil on a basket of different currencies. However the US quickly realized that in such a system the US dollar would no longer be the one, dominant currency for world trade. It would cease to be the world’s reserve currency.Instead the US suggested to Saudi Arabia that all its crude oil must be paid for in US dollars, and eventually all OPEC members agreed.(11)

Around this same time there was an increase in tension and military confrontation between Israel and the Arab states. Because of US aid to Israel, OPEC raised the price of crude oil, cut production levels and then introduced an oil embargo on the US and other countries in 1973. The price of crude oil rose from $3 per barrel to $12 per barrel, and increase of 400%.(12)

While the world saw these events arising from an antagonism between OPEC and the US, many believe that the situation was manipulated by the US so the Arab countries in OPEC would take the blame for the massive increase in the price of crude oil. In fact, the major oil companies worked with OPEC to raise the price of crude, which meant that they would also increase their profits. At the same time the US government also agreed to allow the major oil companies to form a world-wide monopoly or cartel for crude oil. These policies have continued until the present day. This means that there is no “free market” for oil. The price of oil is set worldwide by the major oil companies. With this policy the nature of worldwide capitalism was changed. The key virtue of capitalism is supposed to be “free” competition between independent firms taking risks which will drive innovation and lead to falling prices. Under a monopoly system, there is no risk, there is no competition, and nothing to stop ever increasing prices. Politicians love to praise the virtues of capitalism, but never explain that we no longer live in a real capitalist system.

F. W. Engdahl describes a secret meeting of the Bilderberg group in 1973 where the major banks in the West learned how the flow of cash from OPEC countries would be managed.

« In May 1973 (…) a group of 84 of the world’s top financial and political insiders met at Saltsjobaden, Sweden, the secluded island resort of the Swedish Wallenberg banking family. This gathering of [the] Bilderberg group heard an American participant, Walter Levy, outline a ‘scenario’ for an imminent 400 percent increase in OPEC petroleum revenues. The purpose of the secret Saltsjobaden meeting was not to prevent the expected oil price shock, but rather to plan how to manage the about-to-be-created flood of oil dollars, a process U.S. Secretary of State Kissinger later called ‘recycling the petrodollar flows.' »(14)

The world’s major banks had no interest in stopping these huge price increases. Instead they were rubbing their hands with glee because of the huge and continuing flow of dollars which was going to be deposited in their vaults.

The Petrodollar system requires the OPEC countries to reinvest their profits from the sale of overpriced oil in U.S. debt securities held in Western banks or US government securities. (Some of the money is spent in arms deals including payments for US military bases in the Middle East.) For example, 70% of all Saudi assets in the United States were held in a New York Federal Reserve account in 1999.(15) The money is then invested in US government securities which allows the US to create more dollars. These are then loaned by the major banks of the West or the International Monetary Fund (IMF) to less-developed countries. The less-developed countries use these loans to buy the oil and other goods. The process of recycling is complete when Western banks and the IMF obtain cash and investments from oil exporting countries. The system of “recycling” petrodollars completes itself in four transactions:

1. Profits from the sale of crude by oil exporting countries (OPEC) are invested in Western banks.
2. Western banks and the IMF loan money to less developed countries.
3. Less developed countries use money loaned to them to buy oil from exporters.
4. Profits from the sale of crude by oil exporting countries are invested in Western banks. (This completes the recycling.)(16)

The result of these changes is summarized here:

“The events surrounding the oil crisis of 1973 have helped shape the world’s power relations in favor of global financial institutions, big oil companies and the military sector. The rush toward increased structural concentration for the control of economic activity is driven by high oil prices and the recycling of the oil producing countries’ surpluses into U.S. debt securities and arms deals.”(17)

There are at least three ways that the Petrodollar system works for the US to give it power over all other countries. The Petrodollar system puts all the profits from the sale of crude oil in the vaults of the major US banks. With much more money to invest or loan, the US banks have a clear advantage over the investors in other countries. Further, any country which does not have enough export income to buy oil must borrow US dollars from the IMF or the major US banks. Because most countries must import oil to function, the lenders can set any conditions on these loans they wish. These countries have no choice other than accepting any conditions. This certainly helps to create the well known poverty and underdevelopment in the 3rd world. These countries are simply bled dry by the investment vultures who run these institutions.

But the Petrodollar system also gives US government a significant advantage. All other countries need to focus on their balance of payments to make sure they have enough international currency to cover the cost of imported goods. However the US can simply print more money to pay for what it wants. Why is this? Countries want to have US dollars because they need US dollars to trade with other countries. As explained above, this is the role of a reserve currency. Without a reserve currency of one kind or another, world trade, and trade in oil and gas, would simply grind to a halt. Since there is no alternative to the US dollar, and everyone must have dollars to export or import goods, there is no practical limit on the amount of US dollars they create. This may seem insane, but this is how the world economy has worked since the 1970s.

So why is the US dollar still the reserve currency for world trade? Tyler Durden explains the even though the Federal Reserve Bank in the US has inflated the value of the US dollar so it loses value against other commodities, there has been no real alternative:

“The German Deutsche mark held its value better, but the German economy and its trade was a fraction that of the US, meaning that holders of marks would find less to buy in Germany than holders of dollars would find in the US. So demand for the mark was lower than demand for the dollar. Of course, psychological factors entered the demand for dollars, too, since the US was the military protector of all the Western nations against the communist countries.”(18)

Durden is quite aware of the power the US has from the dollar being the reserve currency and the way it is being used: “We need to look at the concept of a reserve currency differently, because it is important. We need to look at it as a privilege and a responsibility and not as a weapon we can use against the rest of the world.”(19)

When the US abandoned the gold standard for the US dollar and forced OPEC to sell all oil for US dollars, they forced all countries needing oil to acquire dollars, either by trade or by loans from US banks or the IMF. The aim the Petrodollar system is to force the world to accept the US dollar as the reserve currency, thus allowing the US to occupy the uniquely powerful position this creates. All countries must balance exports and imports except the US. Furthermore, the profit from the sale of oil by OPEC ends up in US banks. We will see in the next sections how the vastly increased power of these giant banks have totally transformed both economic and political life around the world.


US abandoned the gold standard and introduced the US dollar as a fiat currency.
Multinational oil companies and OPEC agree to fix world oil prices.
Oil prices increase by 400%.
US allowed the creation of a world wide oil monopoly.
Western banks flooded with dollars paid to OPEC countries for their oil.
All countries must have dollars for oil and any other international trade.
Western banks can force countries which borrow dollars to change their policies to suit the banks.
The US can print money but not suffer the consequences all other countries would.
The US government, major oil companies and biggest US banks are the winners in the Petrodollar system.


We all know that the world has changed dramatically since 1971. However even few of the opponents of the now all powerful US Empire realize that most of what we have seen in the last 40 years can be traced back directly to the introduction of the Petrodollar system. In Part 2 and Part 3 of this series we examine many of the consequences we all live with today. The topics to be discussed are:

1. Dominance of Banks and Finance Capital
2. The Dominance of Finance over Production of Things
3. Examples of Traditional Capitalism and the New Financial “Entrepreneur”
4. The Dominance of Borrowing Over Saving
5. Marx and Classical Economics on Earned and Unearned Income
6. Is There a Return to Serfdom in the Capitalist World?
7. Dominance of US Banks Over Other Countries and their Leaders
8. The Change in Investment Strategies by International Investors
9. Rapid Concentration of Wealth
10. Global Push for Privatization
11. Global Push for Low Tax and Austerity:
12. Global Push for “Trade” Agreements:
13. Increase in Speculation
14. Speculation against Currencies as Economic Warfare

15. Bank Fraud before 2008 Was Punished
16. Crime and Corruption in 2008 with No Penalties
17. Petrodollar System a Disaster for 3rd World
18. Huge US Military Build-up
19. Energy Wars: Unocal Pipelines through Afghanistan
20. Energy Wars: Pipelines through Syria
21. Energy Wars: Iraq Challenges the Petrodollar System
22. Energy Wars: Petrodollars and Libya
23. The Financial Battle Between the US Empire and Russia and China: Can there be an Alternative to the Dollar as a Reserve Currency?

A1. Multinational Oil Companies and OPEC Agree to Fix World Oil Prices and Oil
A2. Who Are the Winners in this New System of Petrodollars?
A3. “Australian” Banks Are a Foreign-Owned Monopoly


2. The WikiLeaks Files (TWF), London, Verso Books, 2015, p. 25.
3. TWF p. 119.
4. Ibid.
5. Ibid.
6. This is just an example. Australia now conducts some of its trade with China in yuan.
9. Smithy, WIZARDS OF MONEY, 1999-2002, Ch. 1. How Money is Created,
10. Letter of Jack F. Bennett (assistant secretary of the U.S. Treasury) to Henry Kissinger, February 1975. ‘Subject: Special Arrangements for Purchase of U.S. Government Securities by the Saudi Arabian Government.’ International Currency Review. Vol. 20, no. 6, January 1991.
14. Engdahl, F.W., A Century of War: Anglo-American Oil Politics and the New World Order, London: Pluto, 2004, ISBN 0-7453-2309-XF, p. 38.
15. Spiro, David E., The hidden hand of American hegemony: petrodollar recycling and international markets, Ithaca, NY : Cornell University Press, 1999.

December 8th, 2015