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The End of the Petrodollar Will Slaughter the U.S. Dollar

June 9 saw one of the most significant attacks on the U.S. dollar to date, and most people missed it…

You see, most investors think the U.S. dollar is stronger than ever. After all, the greenback is up 6.7% this year.

But that couldn't be further from the truth…

end of the petrodollarFor the last 15 years, the U.S. dollar has been heading for total destruction due to one major transition: the end of the petrodollar…

The End of the Petrodollar Is Here

The petrodollar is a system in which every oil export around the world is priced in U.S. dollars. The arrangement has been in place for 40 years and secures the dollar as the global reserve currency.

It started in 1973, when inflation and oil prices were skyrocketing. The United States desperately needed to set oil at a price that would help the dollar.

We ultimately made a deal with Saudi Arabia – the dollar would become the global reserve currency in exchange for the United States guaranteeing Saudi Arabia's national security.

The U.S. dollar surged from there – until 15 years ago. By 2000, it started falling.

The Federal Reserve Broad Dollar Index, which measures the greenback against other world currencies, has fallen 6.5% since then.

And it's heading for total collapse now that Saudi Arabia, Russia, and China are fighting for the end of the petrodollar.

Join the conversation. Click here to jump to comments…

  1. Warno Kartokromo | July 15, 2015

    Please keep me posted. I am very delighted. Thanks in advance. Warno Kartokromo, J.C.I. Senator # 4 6 9 0 0

  2. leo fried | July 16, 2015

    What this whole equation is omitting is STABILITY. China is unstable both economically and politically. If the world chooses to elect the Yuan as a reserve currency, it would be making a terrible mistake.

    • Bill | July 16, 2015

      "China is unstable both economically and politically."

      And the US isn't? America are careering around the world trying to enforce nations back into the 'Petrodollar', they are bombing the Middle East to bits, in their attempt to 'surround' Russia, for what reason? World Domination, and this can only lead to WW3!

    • Bill | September 25, 2015

      "China is unstable both economically and politically."

      Only because of US intervention?
      The US sees itself as world leader, they aren't. They have cars no-one can afford, they have GMO food no-one wants, the only 'asset' they have is land. So they go round bombing the crap out of nations forcing them to use their 'dollar'!
      Saddam, Gaddafi, both murdered because they wanted to sell their oil in other denominations, Saddam was, Euros.
      Now Assad stands in their way of making a 'fast buck' so he gets the treatment too?

  3. Paul Leo,Faso | October 5, 2015

    There are a number of reasons why the Petro/Dollar is toast.

    The ancient internal combustion engine is totally over.

    View the President of the United States of America state to the researchers at the Arrogone National Labs on March 15, 2013. at the 9 minute mark as he states we will,have cars and trucks that will not use gas and oil.

    The whole shift in the Middle East is predicated on the future and we are soon to see it slap everyone out of the coma that has been induced.

  4. Molloy | November 12, 2015

    This will hurt the federal reserve and the banking cartel much more than Joe Public once the painful correction is done. This will liquidate our welfare state and clear out the dead wood parasite classes. With proper exchange rates, maybe we can compete as an export nation once again? Plenty of productive and innovative nations do quite well without being a "reserve hegemon".

    • Bill | June 13, 2016

      Just exactly do you expect to 'export', no-one wants GMO and your cars are far to expensive? USA are big enough for internal trade among states, as for export, forget it. Repatriate all outsourced manufacturing, this will supply much needed jobs.
      Stop banks from creating money from thin air.

  5. Busboy | November 12, 2015

    There will never be a country who can replace the US. None are even willing to give lip service to freedom, and they all manipulate their currencies. China can not be trusted, and everyone knows it, even the Saudis.

  6. James | December 9, 2015

    Who needs Saudi oil? Not the U.S. We have our own sources of energy.

    The oil patch has changed dramatically with shale oil, solar, hydrogen fuel, etc. significantly altering the energy sector for years to come.

    Saudi Arabia is going down the toilet! It is an oil-based country, on a single track. Take away oil and what does it have of economic value? What it is doing now is to drive oil prices down so low it drives out its competitors. Can you see $20 a barrel? If it happens it will be a result of Saudi Arabia's oil strategy. It may succeed, but the one who will really be hurt will be itself. Other energy sources will replace Saudi oil quickly.

    An old adage holds true: He who comes to destroy will himself be destroyed.

    What Saudi Arabia doing now is a very dangerous game. It will only quicken its own demise.

    The right path is stable oil prices.

    Saudi Arabia should wake up and realize OPEC no longer rules. It has lost its power because of alternative energy sources. This is 2015 and not 1973.

  7. yazid | August 3, 2016

    the question is : if the petrodollar dies, so does america as a super power?

  8. Trevin | August 8, 2016

    So the currency of the breadbasket of the world is going to collapse? ha ha Just because there is not petrodollar does not mean that there is no backing for the dollar. The U.S. is the breadbasket of the world and many people of the east are very dependent on U.S. farmers. People who want food from the U.S. must collect dollars to buy the food! If they fail, they either have to get food from somewhere else or starve.

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