The following video by Storm Clouds Gathering provides an excellent summary of continuing Chinese moves to chip away at the US dollar. These include a recent trade agreement between China and Australia to use the yuan and Australian dollar – rather than the US dollar – in bilateral trade. China entered into a similar trade agreement with Russia in 2010 and with Japan in 2011. Another major concern for the Obama administration is recent massive Chinese gold purchases, which suggest they may intend to create a gold-backed currency to rival the US dollar.

The film underlines the obvious build-up for war couched in Obama’s increasing belligerence towards China, Syria, Iran and North Korea. The main intended target of this saber rattling is China, America’s main economic rival. However, for the most part, the government’s true military intentions remain hidden from public view owing to proxy wars with China’s allies (Syria, Iran and North Korea). Historically the main purpose of such proxy wars has always been psychological – to overcome civilian resistance to military aggression.

The video also reminds us that the so-called war on terror is really a war about control of the international financial system. Until the recent defection of China and its allies and now Russian, Japan and Australia, it was only possible to purchase oil in US dollars – which have come to be known as petrodollars. For many years, this forced all countries relying on imported oil to keep reserves of US dollars. After the US abandoned first the gold and then the silver standard, the US dollar maintained its value by virtue of its relative monopoly on the buying and selling of oil. If the petrodollar dies, so does the US dollar does and with it the US economy.

Two of the most significant US military invasions of the last decade relate to threats against the petrodollar. The first occurred in 2003, after Saddam Hussein tried to set up an oil bourse that would trade oil in euros rather than dollars. The second occurred in 2010 when Gaddafi tried to introduce a new currency called the “gold dinar” to be used for Libyan oil purchases.


photo credit: Jonathan_W via photopin cc