Ukraine crisis could affect dollar value
Published 7:00 am Friday, April 4, 2014
There is more to the crisis in Ukraine than meets the eye.
The one that directly affects America is the struggle by the US to keep the petro-dollar alive. At the end of World War II, all nations agreed to buy and sell oil in US dollars. At that time the US was the leading oil producer.
This made the dollar valuable everywhere and the US could print limitless dollars and hide the inflation outside the US. It gave the US huge influence around the globe. The Bretton Woods agreement guaranteed to redeem US dollars with gold, but Nixon ended that practice in 1971.
Today, the BRIC nations, (Brazil, Russia, Iran, China and South Africa) have agreed to use something other than dollars for buying and selling oil. They’re weary of selling their resources for worthless paper dollars. Here is where Ukraine comes in. It contains most of the gas pipelines supplying Western Europe. It’s essential to keep Ukraine on the Petro-Dollar reservation if we want to maintain the dollar’s value and US Influence around the globe, especially with our so called NATO allies in Western Europe.
It’s a fact that the US helped organize the revolution that overthrew Ukraine’s government. In February, a leaked recording from Assistant Secretary of State Victoria Nuland showed her discussing Washington’s choice for the next Ukrainian leader. The president of Ukraine was soon ousted and replaced with a loyal to the petro-dollar. China is siding with Russia on the Ukraine crisis. That is troubling news for the US, considering that we desperately need them to continue to use the petro-dollar.
Libya, Syria and Iraq are examples of how the US deals with petro-dollar renegades, including direct invasion or military support of Al-Qaeda rebels. Iran has secured agreements to trade its oil in exchange for gold, which places them squarely in the US crosshairs.
Syria is Iran’s closest ally. China and Russia have stated emphatically that they will not tolerate an attack on Iran or Syria. Despite these warnings, the White House continues to threaten military intervention.
The petro-dollar gang must convince the US public to accept some kind of military confrontation. But we are sick of wars. Outraged by those in Iraq and Afghanistan, and opposed to any new ones. Missile strikes into Syria were successfully opposed recently by public resistance here and in Britain.
However a war-weary public can be rallied under the right circumstances and the petro-dollar schemers are skilled at leading the public into war by provoking an attack on the US.
This power struggle between three military heavyweights has serious consequences. It could remove the dollar as the world’s reserve currency, triggering an economic collapse in America. Or it could spark a nuclear World War III, with Russia and China as allies against the US. Such a war might begin with an Electromagnetic Pulse (EMP) strike on America.
Russia and China possess EMP capabilities, with Russia being the leader in EMP weapons technology. Numerous experts have stated the consequences of such an event would be as bad, if not worse than an all out nuclear exchange.
We can replace the leaders in Syria and Iran and save the petro-dollar and risk a war with Russia and China, or we can avoid war and accept the death of the petro-dollar and suffer the miseries of economic collapse and runaway inflation.
We can thank congress, the state governors and legislatures for our bright and prosperous future.
Jeff Smith is a guest columnist and retired from Lockheed Martin at Michoud.