The American Century, so triumphantly proclaimed in a 1941 Life magazine editorial by US establishment insider Henry Luce, was built on the control of oil and on an endless succession of wars for that control of global oil. Now, ironically, with the illegal and unilateral cancellation of the Iranian nuclear agreement by the US President, oil may be set to play a key, if unintended, role in the downfall of the global hegemony of that same American Century.
Each element of various countries’ recent and increasing steps to get away from dollar dependency, in and of itself is insufficient to end the domination of the US dollar through Washington’s ability to force other countries to buy or sell their oil only in dollars. Yet each unilateral provocation and sanction action by Washington forces other countries to find solutions only four years ago not deemed possible or practical.
Since the 1973 oil price shock following the Yom Kippur War, Washington and Wall Street have moved to ensure that OPEC, led by Saudi Arabia, would sell its oil only in US dollars. That insured that demand for the US currency could be more or less independent of the internal state of the US economy or of the Government debt or deficits. That system, dubbed petrodollar recycling by Henry Kissinger and others at the time, was a vital underpinning of US global ability to project its power at the same time it allowed its major corporations to walk away from national domestic taxes and investment, in the process of out-sourcing to places like China or Mexico, Ireland or even Russia. Were a significant group of nations to abandon the dollar and turn to other currencies or even barter at this point, it could start a chain-reaction of events that would lead to sharp US interest rate increases and a new US financial crisis that would be far uglier than that a decade ago.
US Sanction Mania
Ever since September 11, 2001 the US Government has been engaged in a process of transforming its use of financial sanctions, supposedly against financing of terrorist groups like Al Qaeda, into a central weapon of warfare in defense of the American Century. The latest decision of the US Treasury to impose radical new forms of targeted sanctions on Russia,