Without directly quoting from this disgustingly depressive article about violent propaganda, geopolitical aspirations of Saudi royal family in the entire Middle East for resource-grab of all crude oil reserves, meddling around in Bahrain, Kuwait, Egypt and many more nations, Saudi arms race with Iran and many more unstated points too numerous to mention - Basic macroeconomic implications of this mess are as follows:
- Apart from missiles, bombs and drones, the biggest American export is its "under-threat by own debt crisis and increasingly impatient Chinese controlled" fiat US Dollar currency. By definition, it is backed by absolutely nothing, except threats of warfare with missiles, bombs and drones, imbalanced/rigged trade treaties and globalized surveillance spying using newer and newer high-tech business intelligence algorithms.
- [Seriously, ponder more and more on above point. Are these really the signs of philosophical enlightenment and prosperity, values of freedom and liberty, and justification for moral high ground? This propagandized situation is no different from how British parliament used propaganda to justify imposing Opium war on China, or forced indigo farming apartheid in Bihar/Bengal, India.]
- With diminishing manufacturing and service outputs, debt-ridden and increasingly propagandized/brainwashed population addicted to garbage consumer goods they don't need like wasted druggies are addicted to crack cocaine, what kept the fiat US Dollar propped up as "reserve currency" for such a long time? It basically had its "Petrodollar" status, with Saudi royal family being the biggest partners in crime propping it up. This means, it was guaranteed that all global trade of petroleum would have to occur in US Dollar.
- Now consider the weakened state of US Dollar completely unrelated to all of Saudi Arabia-Iran/Syria/Lebanon cold war drums. As blogged before, various Asia Pacific economic powerhouses are putting their houses in order, setting up trade deals independent of US Dollar.
- Saudi Arabia having become addicted to using "Petrodollar guarantee" as a blackmailing tool have been taking for granted use of American military resources to carry out dirty deeds and achieve their geopolitical ambitions. In other words, what would Saudi royals care if some 18 year old boy from Kentucky in US Army died fighting in some dubious war in Iraq, as long as it helped them achieve goal of Middle East geopolitical domination and escalating arms race with Iran? For the Petrodollar guarantor-American arms importer Saudis, those American kids dying or getting critically maimed/wounded have been worthless collateral noise, as long as their goals were being achieved.
- Under such precarious conditions, if Saudis get push-back on use of American kids dying fighting against Iran or Syria - neither of whom have directly threatened or attacked USA - only course of action from them can be to blackmail US into dumping Petrodollar status. Knowing the increased vulnerability to US Dollar from China slowing down purchases of US Treasuries, this would be some serious blackmail indeed.
- The moment Saudi Arabia starts - in spite and revenge - using a currency other than US Dollar for trading petroleum with nations other than US, all hell breaks loose all over American streets. Such scenario can guarantee American banks declaring bank holidays, ATM machines ceasing to function, utility electric/water grids going into frozen state, and all kinds of gloom and doom scenarios too numerous to mention here.
As said at the top: On top of Chinese US Treasury chill, this stuff would absolutely be comical and most freakishly hilarious - if only lives of billions of innocents all over the planet were not so hopelessly dependent on the madness.
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