By Peter Haisenko – March 17, 2022
China and Saudi Arabia want to switch their oil trade to payment in Chinese renminbi, or yuan. This will break the power of the petrodollar and if more follow, the collapse of the US empire is imminent.
When the U.S. dollar, the reserve currency, was decoupled from reference to gold in 1971, it had actually lost its position as reserve currency. It no longer had any real-backed value. To make the U.S. dollar still indispensable, Washington ordered the world to trade oil only in dollars. The petrodollar was invented. Anyone who wanted to opt out was mercilessly destroyed by force of arms. Iran, Libya, Iraq. Thus, the U.S. dollar continued to be maintained as a kind of reserve currency, because anyone who wanted to buy oil had to get dollars first.
There is no freedom not to buy oil, and so the U.S. was able to establish the system of transacting all world trade in dollars, and with every transaction some of it stuck to the sticky fingers of Wall Street. Washington took advantage of this to enforce sanctions and embargoes. Anyone who, in the opinion of the USA, behaves improperly toward them is excluded from international payments. See Cuba and currently Russia. For ten years, however, China has been working to free its foreign trade from dependence on the dollar. Russia has also largely done the same. What remained until now was the oil trade, and that is the basis for the petrodollar. This dictate of the U.S. empire is now being broken by Riyadh and Beijing.
Fatal memories of the war between Iraq and Iran
The Wall Street Journal reports that Saudi Arabia and China will settle oil deliveries in yuan in the future. Why are the Saudis exposing themselves to the risk of following the fate of Persia, Libya and Iraq at this very moment? Namely, to be “punished” by the U.S. for doing so? First, the timing is opportune. The U.S. cannot open another conflict that further fragments its forces. And then China as a partner. Unlike with smaller countries, the U.S. cannot dictate to China. They will also have a hard time with the Saudis. But why are the Saudis turning away from the U.S. dollar right now?
In the Arab world, there are highly educated and clever people who closely observe and analyze what is going on in the world. After all, they managed to have the tallest building in the world erected in Dubai. The following ones are not in the USA, but in China and Saudi Arabia. What the Saudis can now observe in Ukraine reminds them fatally of the war between Iraq and Iran. Washington upgraded Iraq and pushed it to war with Iran. That war lasted eight years, from September 22, 1980, to August 20, 1988, and caused millions of deaths. However, what could also be observed was that although the U.S. orchestrated this war, it still maintained its support for Iraq at a level that did not allow Iraq to win quickly. In this way, they have done lasting damage to these two countries.
Those who now look impartially at the Ukraine conflict cannot help but see parallels. The U.S. has been arming Kiev for at least eight years, positioning it against Russia at the latest with the Maidan coup. The plan was probably to engage a Ukraine armed with Western weaponry in a war with Russia that would ideally also last for many years and become really bloody.
In this way, Russia’s forces were to be bled dry and its international reputation permanently damaged. Putin realized this just in time and started his clean-up operation before the desired and grueling war could be opened with Western weapons. In Riyadh, however, one can see that the Iran/Iraq pattern is being followed there as well. More than verbal support and arms deliveries do not come from the West, apart from sanctions against Russia, but that was no different with the Iran/Iraq war. So what are the Saudis to think now that they know that their relationship with Iran has also been poisoned by the United States? Riyadh has learned that it cannot rely on the United States. This also applies to their war with Yemen, which they started only with the approval of the United States. But they have also learned in recent years that Russia can be relied on, and so they have moved closer to Russia and their relations with Iran are more relaxed.
The collapse of the petrodollar will have catastrophic consequences
The Saudis have also been able to learn that China can be relied upon and, what might be more important, that China does not tell them what to do and with whom they can be friendly. Moreover, Saudi Arabia has long been getting far more goods from China, which they cannot do without, than from the United States. So why should they continue to do their payments with China through New York, where some of it sticks, instead of settling their imports from China directly in Chinese currency with their oil exports? Now that there is little danger of risking a conflict with the U.S. because its forces are focused on Russia right now. The U.S. cannot afford another construction site.
The consequences will be catastrophic for the USA. The petrodollar will collapse as soon as other countries seize the opportunity to follow China’s example and free their bills from the shrinkage and control of New York. This then applies not only to oil. Indeed, if one analyzes world trade, it becomes clear that exports from the U.S. account for only a very small portion. China and Germany, on the other hand, supply the entire world, i.e. from all countries that, unlike the USA, have a balanced to positive trade balance. Is it not insane to conduct this trade in dollars and thus expose oneself to the dictates of the USA? Is it not right for Moscow now to demand payment of its bills in rubles? This includes payment for energy supplies. This is also an attack on the petrodollar.
India, China and Russia have already established a system for direct settlement of their invoices. They have designated banks for these transactions. The BRICS settlement system is also already operational and is being extended to the southern Far East. If oil trade is now also decoupled from the dollar, the U.S. currency is finished and with it the entire dollar hegemony. Or, to put it plainly, the dominance of the U.S. empire. The dollar system will collapse and then the US will not be able to pay its vassals, mercenaries and NGOs. Those who can’t pay also have no more mercenaries and can’t keep media on track.
The demand for a balanced trade account will cause major problems for the U.S.A.
The collapse of the petrodollar, the crowbar of U.S. policy, is the eternal nightmare of the United States. Now, it is also the case that China holds the largest reserves, which are denominated in U.S. dollars. So China has long been reluctant to destroy the U.S. dollar by dumping its dollars on the market. But China has realized that sooner or later these dollar reserves will be worthless anyway; that they will no longer be able to buy with them or even be compensated by the U.S., let alone collect their debts. So now China has also pulled the ripcord and accepts to give its dollar reserves into the garbage. No, China does not want war, but it is not necessary to call the USA to order. It is enough to take away their crowbar to break the back of the eternal attacks of the USA.
Switching settlements between Riyadh and Beijing to the yuan heralds the end of the U.S. empire. When it no longer needs dollars to buy oil, it will also no longer tolerate having exports paid for with freshly printed dollars. But then the USA will only be able to import as much as it can export itself. This is precisely the case if it is also true for the U.S. that only a balanced trade balance can be accepted in the long run. But then things will look bleak for the USA, because for a long time now hardly any clothing, watches or other commodities have been produced there that are irreplaceable for daily life.
So if the dollar falls, the practical effect will be that the U.S. itself will experience what it has done to the world for decades with its embargoes and sanctions. And no, there is no need for force, embargoes or sanctions. They simply can’t pay for what they want to have and so they don’t get it anymore. Even their gigantic attack machine won’t help them anymore, because both Russia and China are not defenseless countries that could be destroyed by the U.S. quite safely. Russia and China are capable of simply sinking attacking aircraft carrier formations far out. The USA has never dared to attack an equal state. They have also attacked Germany twice only after others had already broken the German military’s toe.
Turbulent times ahead
With the attack on the petrodollar, Beijing and Riyadh have heralded the end of the US empire. They are taking away its most effective weapon. Whether the USA have already understood this? Whether they still want to avert this with a world war? It would be harakiri and the psychopaths in Washington know that. So it is time that one wakes up also in Berlin and draws consequences. That they no longer accept to receive only green printed paper for 200 billion per year. It is time to recognize that healthy economic relations can only be based on balanced trade. That it harms us most if we unthinkingly follow the sanctions dictates of the USA. But until that can happen, the pile of dilettantes that calls itself our government must first resign and be replaced by intelligent people who are no longer members of transatlantic associations or come from Klaus Schwab’s stable.
With the end of the dollar empire, turbulent times will be upon us. I expect that within this year we will find ourselves in a completely new world order. Putin has given the go-ahead for this with his operation in Ukraine, and China is doing its part. Russia has to do the dirty work in Ukraine, and China is elegantly and inconspicuously dealing the death blow. Should we be afraid? Yes and no. We need to fear that the U.S. will go berserk and nuke the world. Just as the British Empire did with World War I when it faced (economic) ruin. If, however, the USA retains a last shred of decency, then we can look forward to a new world without sanctions dictates and global exploitation, in which each country is allowed to live as its people see fit. One can only understand the current state of the world if one has understood that evil has always had its home in London and Washington, and nowhere else in the world.
The USA has actually been broke for a long time. How can they finance their gigantic military? You can find an explanation here: