For those who will label us conspiratorial freaks we say not so fast. Big banks and the Federal Reserve have been sharing the same boudoir for a long time. One doesn't have to be a skilled trapper to follow the tracks.
As the article notes, this is one leg of the bipedal vehicle to control global finance, the industrial-military complex and the Wall Street money changers who get by with not a little but a lot of help from their Federal Reserve Bank friends. Like the old saying: Whatever happens in the dark has a way of finding the light. The same rings true for arrogance.
Russia has just taken significant steps that will break the
present Wall Street oil price monopoly, at least for a huge part of the
world oil market. The move is part of a longer-term strategy of
decoupling Russia’s economy and especially its very significant export
of oil, from the US dollar, today the Achilles Heel of the Russian
economy.
Later in November the Russian Energy
Ministry has announced that it will begin test-trading of a new Russian
oil benchmark. While this might sound like small beer to many, it’s
huge. If successful, and there is no reason why it won’t be, the Russian
crude oil benchmark futures contract traded on Russian exchanges, will
price oil in rubles and no longer in US dollars. It is part of a
de-dollarization move that Russia, China and a growing number of other
countries have quietly begun.
The setting of an oil benchmark price is
at the heart of the method used by major Wall Street banks to control
world oil prices. Oil is the world’s largest commodity in dollar terms.
Today, the price of Russian crude oil is referenced to what is called
the Brent price. The problem is that the Brent field, along with other
major North Sea oil fields is in major decline, meaning that Wall Street
can use a vanishing benchmark to leverage control over vastly larger
oil volumes. The other problem is that the Brent contract is controlled
essentially by Wall Street and the derivatives manipulations of banks
like Goldman Sachs, Morgan Stanley, JP MorganChase and Citibank.
The ‘Petrodollar’ demise
The sale of oil denominated in dollars is essential for the support of the US dollar.
In turn, maintaining demand for dollars by world central banks for
their currency reserves to back foreign trade of countries like China,
Japan or Germany, is essential if the United States dollar is to remain
the leading world reserve currency. That status as world’s leading
reserve currency is one of two pillars of American hegemony since the
end of World War II. The second pillar is world military supremacy.
US wars financed with others’ dollars
Because all other nations need to
acquire dollars to buy imports of oil and most other commodities, a
country such as Russia or China typically invests the trade surplus
dollars its companies earn in the form of US government bonds or similar
US government securities. The only other candidate large enough, the
Euro, since the 2010 Greek crisis, is seen as more risky.
That leading reserve role of the US
dollar, since August 1971 when the dollar broke from gold-backing, has
essentially allowed the US Government to run seemingly endless budget
deficits without having to worry about rising interest rates, like
having a permanent overdraft credit at your bank.
That in effect has allowed Washington to
create a record $18.6 trillion federal debt without major concern.
Today the ratio of US government debt to GDP is 111%. In 2001 when
George W. Bush took office and before trillions were spent on the Afghan
and Iraq “War on Terror,” US debt to GDP was just half, or 55%. The
glib expression in Washington is that “debt doesn’t matter,” as the
assumption is that the world—Russia, China, Japan, India, Germany–will
always buy US debt with their trade surplus dollars. The ability of
Washington to hold the lead reserve currency role, a strategic priority
for Washington and Wall Street, is vitally tied to how world oil prices
are determined.
In the period up until the end of the 1980’s world oil prices were determined largely by real daily supply and demand.
It was the province of oil buyers and oil sellers. Then Goldman Sachs
decided to buy the small Wall Street commodity brokerage, J. Aron in the
1980’s. They had their eye set on transforming how oil is traded in
world markets.
It was the advent of “paper oil,” oil
traded in futures, contracts independent of delivery of physical crude,
easier for the large banks to manipulate based on rumors and derivative
market skullduggery, as a handful of Wall Street banks dominated oil
futures trades and knew just who held what positions, a convenient
insider role that is rarely mentioned in polite company. It was the beginning More:
