{"id":62817,"date":"2022-06-02T06:31:43","date_gmt":"2022-06-02T11:31:43","guid":{"rendered":"https:\/\/olduvai.ca\/?p=62817"},"modified":"2022-06-02T06:31:43","modified_gmt":"2022-06-02T11:31:43","slug":"running-on-empty-part-ii","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=62817","title":{"rendered":"Running on Empty, Part II"},"content":{"rendered":"<div class=\"post-header\">\n<h3 class=\"post-title short unpublished\"><a href=\"https:\/\/treeofwoe.substack.com\/p\/running-on-empty-part-ii?utm_source=email&amp;s=r\">Running on Empty, Part II<\/a><\/h3>\n<p class=\"subtitle\"><strong>How the Petrodollar Poisoned Foreign Policy with Financial Profiteering<\/strong><\/p>\n<div class=\"post-subheader meta-subheader\">\n<div class=\"left\">\n<div class=\"label-stack\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div>Welcome to Part II of <em>Running on Empty,\u00a0<\/em>my three-part analysis of the Petrodollar system.\u00a0<a href=\"https:\/\/treeofwoe.substack.com\/p\/running-on-empty-part-i?s=w\" rel=\"\">Part I of this series<\/a>\u00a0explained what the petrodollar system is, how it came to be, and what its financial effects have been on the United States. In Part II, I\u2019ll explain the petrodollar\u2019s implications for foreign policy. In Part III, I\u2019ll show how those implications paved the way for the Russo-Ukraine War, and why that\u2019s causing the system to break down.<\/div>\n<div class=\"\">\n<div class=\"available-content\">\n<div class=\"body markup\" dir=\"auto\">\n<h3>America\u2019s Chief Export is the US Dollar<\/h3>\n<p>As explained in the previous installment,\u00a0<a href=\"https:\/\/www.bloomberg.com\/news\/features\/2016-05-30\/the-untold-story-behind-saudi-arabia-s-41-year-u-s-debt-secret\" rel=\"\">the petrodollar system is based on an agreement between the US and Saudi Arabia<\/a>. Under the terms of the deal, the US guarantees the security of Saudi Arabia and in exchange, Saudi Arabia guarantees that all petroleum is sold by OPEC for US dollars, with the US dollars re-invested into America via petrodollar recycling. The result: Since everyone needs petroleum, everyone needs US dollars. Oil replaces gold as the hard backing for the dollar.\u00a0<a id=\"footnote-anchor-1\" class=\"footnote-anchor\" href=\"https:\/\/treeofwoe.substack.com\/p\/running-on-empty-part-ii?utm_source=email&amp;s=r#footnote-1\" rel=\"\">1<\/a><\/p>\n<p>Since the petrodollar system was put in place, the US has enjoyed a comparative advantage in manufacturing currency that no other nation enjoys. Under conditions of free trade, a country produces and exports more of a good for which it a comparative advantage, and produces less and imports more of the goods for which it doesn\u2019t. And that\u2019s what has happened: Since the petrodollar system was put in place in 1973, America has produced more and more dollars and produced less and less of everything else. The dollar is today our nation\u2019s #1 export.<\/p>\n<p>How large is the circulation of US dollars? As of April 2022,\u00a0<a href=\"https:\/\/www.federalreserve.gov\/releases\/h6\/current\/default.htm\" rel=\"\">the American money supply<\/a>, which economists call\u00a0<strong>M2<\/strong>, stands at $21,728 Billion Dollars. M2 includes three types of money:<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Running on Empty, Part II How the Petrodollar Poisoned Foreign Policy with Financial Profiteering Welcome to Part II of Running on Empty,\u00a0my three-part analysis of the Petrodollar system.\u00a0Part I of this series\u00a0explained what the petrodollar system is, how it came to be, and what its financial effects have been on the United States. In Part [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,5],"tags":[30680,309,8697,536,588,600,626,701,827,834,839,32936],"class_list":["post-62817","post","type-post","status-publish","format-standard","hentry","category-economics","category-geopolitics","tag-contemplations-on-the-tree-of-woe","tag-fiat-currency","tag-monetary-base","tag-money","tag-oil","tag-opec","tag-petrodollar","tag-saudi-arabia","tag-united-states","tag-us","tag-us-dollar","tag-us-petrodollar"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/62817","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=62817"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/62817\/revisions"}],"predecessor-version":[{"id":62818,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/62817\/revisions\/62818"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=62817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=62817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=62817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}