MCViewPoint

Opinion from a Libertarian ViewPoint

The Petrodollar-Saudi Axis Is Why Washington Hates Iran

Posted by M. C. on November 3, 2022

In order to stave off runaway, hyperinflation, Nixon empowered then secretary of the Treasury, William Simon, to go hat in hand to the Saudi monarchy, with a proposal. According to Andrea Wong in a Bloomberg article from 2016(!), Simon landed in Jeddah, Saudi Arabia to get King Faisal to agree “to finance America’s widening deficit with it’s newfound [oil] wealth.”

https://mises.org/wire/petrodollar-saudi-axis-why-washington-hates-iran

Gary Richied

Kish, since you are wondering, is an Iranian island in the Persian Gulf famed for its tourist and shopping attractions. It is becoming a serious rival to other nearby vacation hubs in Doha and Dubai.

Along with pristine beaches and extensive malls, Kish is—or rather ought to be—known more widely for another feature and institution which the Iranian mullahs established there way back in 2003; namely, the Kish Bourse (i.e., Kish Stock Exchange). بورس کیش if you prefer the Farsi.

Think of it as the Chicago Mercantile Exchange of Iran, a country stacked with natural resources, a relatively well-educated and sophisticated population (the literacy rate is 97 percent among young adults, which, if you consider the deplorable state of secondary education in the United States, means that Iranian youth are most assuredly smarter than your average young American adult), and an economy burdened by mismanagement of their own Islamic theocracy and crippling, long-duration sanctions from the American secular theocracy.

That American secular theocracy has considered it a dogmatic rite of passage into the state and corporate media (their temples) that one must, at the very least, excuse the economic, cultural, and political warfare against Iran as necessary for a variety of spurious reasons. Who really has enough free time to investigate and then suggest otherwise? After all, Iran is plagued by terroristic Islamic fundamentalists who have pledged—like their former president, Mahmoud Ahmadinejad—“to wipe Israel off the face of the earth.”

That hero of American warfare and empire and regime change and nation building, George W. Bush, declared Iran to be one of the hinges of the “axis of evil”; so, since George W. Bush is so much better than Donald J. Trump, well, all Iranians must be malevolent thugs. Iran deserved to have the United States aid Saddam Hussein in the 1980s, to have the United States provide Hussein chemical weapons (mostly made in Germany and the United Kingdom), and then have those chemical weapons unleashed on them.

Never mind that Ahmadinejad never said that. Look away from the facts that one of the rare times in which Trump garnered any support from the deep state cathedral and corporate media cabal was when he tore up the Iran nuclear deal and when he assassinated Iranian general Qasem Soleimani. Orange man good when he’s killing brown peoples in distant lands—so conclude the powers that have been for way too long.

Why has Iran, then, incurred such wrath from the American military-industrial complex establishment? The regime’s Sturm und Drang regarding Iran—and, for that matter, any state that even intimates that it will conduct trade in oil without the dollar, cf. Russia—is all about the petrodollar system.

Let’s define it with some historical context: When Richard Nixon removed the dollar from its peg to gold in 1971, chaos followed. It was not just the Yom Kippur War (1973) and resultant OPEC embargo that led oil prices to skyrocket in the United States. The dollar, as the new, floating, purely fiat global reserve currency had lost its allure when compared to other sovereign currencies and precious metals.

In order to stave off runaway, hyperinflation, Nixon empowered then secretary of the Treasury, William Simon, to go hat in hand to the Saudi monarchy, with a proposal. According to Andrea Wong in a Bloomberg article from 2016(!), Simon landed in Jeddah, Saudi Arabia to get King Faisal to agree “to finance America’s widening deficit with it’s newfound [oil] wealth.”

Said another way, the Americans promised to buy oil from Saudi Arabia, and in return, the Saudis would promise to denominate global purchases only in dollars. Washington would also go so far as to provide military aid and materiel to the Kingdom, which made Raytheon, McDonnell Douglas, and Rand Corporation types happy. The tit for that tat came in the form of guarantees that the Saudis would “plow billions of their petrodollar revenue back into Treasuries and finance [the inordinate, warfare-welfare] spending” of every US regime since.

It—incredibly—gets worse. King Faisal accepted the arrangement (one that was sure to make his desert-oil kleptocracy a major regional power and global player) on one condition: The rest of the world could not know the extent of the agreement. That is to say that Faisal knew that in the rest of the Islamic world, underwriting America’s drunken-sailor imperial spending, well, that would not play in Cairo, Damascus, and Kuala Lumpur.

Therefore, Simon allowed for the Saudis to “bypass the normal competitive bidding process for buying Treasuries by creating ‘add-ons.’ Those sales, which were excluded from the official auction totals, hid all traces of Saudi Arabia’s presence in the U.S. government debt market.”

See the rest here

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