3 ms·

Actually one of the main (the main?) pillar of Dollar hegemony was the USA-KSA strategic agreement for mandating the use of US Dollars for energy transactions.

Actually one of the main (the main?) pillar of Dollar hegemony was the USA-KSA strategic agreement for mandating the use of US Dollars for energy transactions. This is all early 70s geopolitical actions that had and continues to have significant side effects, including dropping the Shah of Iran* (and embracing KSA instead). For many nations, holding Dollar reserves is/was for buying oil and gas. [1] https://www.bloomberg.com/news/features/2016-05-30/the-untold-story-behind-saudi-arabia-s-41-year-u-s-debt-secret https://www.bloomberg.com/news/features/2016-05-30/the-untol... (https://archive.is/kRW9c https://archive.is/kRW9c) [2] https://www.currencytransfer.com/blog/expert-analysis/saudi-arabia-petrodollar https://www.currencytransfer.com/blog/expert-analysis/saudi-... * From [1]: “Just a week before setting foot in Saudi Arabia, Simon publicly lambasted the Shah of Iran, a close regional ally at the time, calling him a “nut.”” https://www.semanticscholar.org/paper/Showdown-at-Doha%3A-the-secret-oil-deal-that-helped-Cooper/fa4c8cf61f68a7038ffe4ce72529681b72ec602e https://www.semanticscholar.org/paper/Showdown-at-Doha%3A-th... The rise of Islamic Jihadis, financed by KSA and trained by CIA, propagation of Wahabism, tolerating the replacement of a secular ally in Iran with Islamist revolutionaries, ..., are all the direct consequence of this strategic shift by the USA. This is all in the context of post-Vietnam debt, rise of OPEC, and a still very menacing Soviet Union. The Shah had made the error of thinking that by not joining the oil embargo of Arab states he was proving yet another reason (beyond being a forward Western block allied barrier to Soviet Union’s access to the Persian Gulf) for being considered a strategic ally to US. Nixon and Kissinger publicly and privately also assured of Iran’s importance. But what actually happened was that the oil embargo demanded a reassessment of the value of Shah of Iran to US. It was seen that oil and Arab producing nations’ alignment was far more important than any value Shah’s Iran was providing as a bulwark against the Soviets. The Brezhinski doctrine effectively addressed the means of filling the vacuum: Islamic Fundamentalism.

yehosef 3y ago
Right! The fact that Arab-oil countries want to join BRICS and are starting to trade in Yuan instead of Dollars is also going to accelerate this. https://www.zerohedge.com/geopolitical/five-arab-states-plus-iran-among-19-nations-ready-join-brics https://www.zerohedge.com/geopolitical/five-arab-states-plus...
- eternalban 3y ago
  some go quietly, some put up a fight, some linger in centuries long decline, some collapse overnight Well, imho, this question hinges more on the calculations (and subsequent actions) of US's allies rather than the counter-organizing efforts of the rebel states.
- AtlasBarfed 3y ago
  I get this seems inconceivable to those involved and so thoroughly permeated with oil == power dynamic of the 20th century. But it's interesting this particular "power center" of the world (US dollars for oil) is weakening just as oil's grip on the world is weakening. The world was totally beholden to oil for what, 100 years? But everyone with a brain sees that oil demand is going to plummet with EVs and wind/solar to recharge them ... and domestic reserves will likely cover the remaining demand. The political power dynamic of the petrodollar has ... what ... a decade? Or it's already dead? Power and economic productivity is/were hand in hand. The geopolitical dominance of oil provided direct political dominance over everyone's economy. But Solar/Wind/EVs are largely independent of geopolitical control. Yes China appears to be dominant in EV production, batteries, and solar cells, but it isn't the ironclad grip of "we have oil underground you don't". EV drivetrains are simple, everyone can make an electric motor. Viable EV battery chemistries are proliferating and also becoming immune to cobalt, nickel, and even lithium supply constraints. Anyone can make a wind turbine, and solar cell production will likely plummet in cost and diversify in production if/when perovskites and other non-silicon panels hit the mainstream. But likely we are headed back to a cold war alignment, or even more fascinating, a tri-power alignment (EU, US, China), and economic alignment will be replaced with the good old protection racket of the Cold War. Oil will probably remain as a military energy source. But likely everyone will be able to solve gas production with, at minimum, biofuels.
  - tomcar288 3y ago
    I didn't realize this until I came across Nate Hagens work on Oil/Gas, etc. He's got a PHD and extensive research expertise on oil and natural resources of the world. He's telling us, oil is absolutely pivotal for global GDP. Furthermore, what I found interesting about his works (very surprising): reknewable energy sources are not independent of oil, they depend on oil just like everything else. and he's got some rather stunning discoveries on oil and GDP.

yehosef 3y ago

Right! The fact that Arab-oil countries want to join BRICS and are starting to trade in Yuan instead of Dollars is also going to accelerate this. https://www.zerohedge.com/geopolitical/five-arab-states-plus-iran-among-19-nations-ready-join-brics https://www.zerohedge.com/geopolitical/five-arab-states-plus...

eternalban 3y ago
some go quietly, some put up a fight, some linger in centuries long decline, some collapse overnight Well, imho, this question hinges more on the calculations (and subsequent actions) of US's allies rather than the counter-organizing efforts of the rebel states.
AtlasBarfed 3y ago
I get this seems inconceivable to those involved and so thoroughly permeated with oil == power dynamic of the 20th century. But it's interesting this particular "power center" of the world (US dollars for oil) is weakening just as oil's grip on the world is weakening. The world was totally beholden to oil for what, 100 years? But everyone with a brain sees that oil demand is going to plummet with EVs and wind/solar to recharge them ... and domestic reserves will likely cover the remaining demand. The political power dynamic of the petrodollar has ... what ... a decade? Or it's already dead? Power and economic productivity is/were hand in hand. The geopolitical dominance of oil provided direct political dominance over everyone's economy. But Solar/Wind/EVs are largely independent of geopolitical control. Yes China appears to be dominant in EV production, batteries, and solar cells, but it isn't the ironclad grip of "we have oil underground you don't". EV drivetrains are simple, everyone can make an electric motor. Viable EV battery chemistries are proliferating and also becoming immune to cobalt, nickel, and even lithium supply constraints. Anyone can make a wind turbine, and solar cell production will likely plummet in cost and diversify in production if/when perovskites and other non-silicon panels hit the mainstream. But likely we are headed back to a cold war alignment, or even more fascinating, a tri-power alignment (EU, US, China), and economic alignment will be replaced with the good old protection racket of the Cold War. Oil will probably remain as a military energy source. But likely everyone will be able to solve gas production with, at minimum, biofuels.
- tomcar288 3y ago
  I didn't realize this until I came across Nate Hagens work on Oil/Gas, etc. He's got a PHD and extensive research expertise on oil and natural resources of the world. He's telling us, oil is absolutely pivotal for global GDP. Furthermore, what I found interesting about his works (very surprising): reknewable energy sources are not independent of oil, they depend on oil just like everything else. and he's got some rather stunning discoveries on oil and GDP.