OriginIn 1971 Richard Nixon was forced to close the gold window taking the U.S. off the gold standard and setting into motion a massive devaluation of the U.S. dollar.(Blamed Iran for that) In an effort to prop up the value of the dollar Nixon negotiated a deal with Saudi Arabia that in exchange for arms and protection they would denominate all future oil sales in U.S. dollars. Subsequently, the other OPEC countries agreed to similar deals thus ensuring a global demand for U.S. dollars and allowing the U.S. to export its inflation.
Financial impactIn the existing system, all transactions actually must be settled in U.S. dollars, creating a world-wide demand for dollars. The petrodollar system also meant that the U.S., the largest consumer of oil in the world, gained the power to buy oil with a currency it can print at will. Since all countries have to pay for oil in dollars, this also means the US can import anything from anyone, with money it can print at will.
With that fresh in your mind.. Enter Russia
Russia's Rosneft Surpasses ExxonMobil To Become World's Biggest Oil Co.
Russia's Gazprom is the world's largest producer of natural gas.
So is it any wonder why the US is staging coups in Ukraine ? Maybe, just maybe, Russia poses a threat to the petrodollar scam. Its pretty sad that the US is stooping this low in Ukraine. Sure, we all know Saddam was a douche and a Muslim. The US had grounds to knock him off. But Russia ? Really ?