The Iran war is a dagger aimed at the heart of the petrodollar system. I have been banging on about this for weeks because the petrodollar is America’s Achilles’ heel. The United States is losing the war, but we can absorb most of the losing scenarios. For instance: It will be bad if the sanctions regime against Iran is destroyed. It will be worse if Iran is set on the pathway to become a nuclear power.
But neither of those outcomes would be a strategic threat to America.
The risk to the petrodollar is a different category. If its supremacy is supplanted then the entire American-led world order begins to teeter and the extent of the damage is impossible to calculate.
Just as a for-instance: Without the petrodollar system, Social Security and Medicare become hard to support at current levels and defense spending gets crunched.
In order to understand this threat, we’re going to have to dig into economic and geopolitical history. We’re going to talk about the gold standard and currency recycling and deficit financing and OMG this is not sexy stuff.
But it’s hugely important, and I think it’s possible to explain it clearly. And (to mix metaphors) if you want to see around corners, sometimes you have to eat your vegetables. So get ready for a double-shot of spinach, fam...
