Foreign Government purchase of US Treasury Bonds=FED new FREE money for Wall St. elite ($7 trillion) - a coincidence?

 Economics Professor Michael E. Hudson explains the petrodollar well. Essentially Kissinger set this up as the Saudis wanted military weapons - so the Saudis keep oil prices down but then the US dollars from selling oil have to be invested back into the US - hence "Petrodollars." 

 t all started as follows: the United States, represented by the US Secretary of State, Henry Kissinger, had a series of meetings with the Saudi royal family in 1974 and reached a powerful agreement

. It stated that the US would buy Saudi Arabia’s oil and would provide military aid and equipment. In exchange, the US required that:

• The Saudis agree to price all of their oil sales exclusively in USD
• The Saudis would be open to investing their surplus oil proceeds in US debt securities

Naturally, this deal surprised the Arabs as it was quite attractive – the only thing they had to do was to refuse other foreign currencies and sell their oil for dollars.

So then the banks took the oil money to "invest" into the "third world" - and then John Perkin's book "Confession of an Economic Hitman" explained how the international finance consultants then threaten the third world leaders - to take these loan shark threats. So the money as loans are then KICKED BACK to US "development" corporations. Most US corporate profits are now made OUTSIDE the US and we have some 900 military bases in OTHER countries.

So as Professor Hudson emphasizes - the huge amount of US dollars from the trade deficit - especially in China - is then used to buy US debt treasury notes but the FED just printed $7 trillion in the past year as FREE money for Wall St. due to the previously illegal "stock buybacks." So the low interest rate is used for bulk loans that then create a ponzi scheme.

 

So as long as US corporations can rely on cheap slave wages in other countries - then the US military can continue to afford to back up their bank threats in other countries. That's how the US Petrodollar works - as Noam Chomsky explains. So for example I knew the US would invade Iraq again - I wrote a graduate paper on this in 1998 - based on Noam Chomsky pointing out the US needed Veto Power over the oil supply - a monopoly - to control Japan and Germany having to buy oil with US dollars.

"In 1979, the United States and Saudi Arabia negotiated the United States-Saudi Arabian Joint Commission on Economic Cooperation.6 They agreed to use U.S. dollars for oil contracts. The U.S. dollars would be recycled back to America through contracts with U.S. companies."

and

"Japanese oil refiners have started paying for Iranian crude oil in yen instead of dollars. Japan’s largest oil refiner, Nippon Oil Corp., announced the change in September; Cosmo Oil Co. and Japan Energy Corp. followed suit in October." 

2007 - so hence the US targeting Iran now.

Iran but they recently signed a deal with China to trade oil in Yuan.

China’s $400bn oil deal with Iran is a major step in the cold war that could derail trade talks 2019

Saudi Arabia is threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to U.S. antitrust lawsuits, three sources familiar with Saudi energy policy said. 2019

So when the US Dollar value depreciates that means Oil imports for Europe and Japan are CHEAPER relative to their own currencies since they buy oil with the US dollar. 

 

So I would say that as long as Oil is traded in US dollars then the FED can keep propping up the US elite with FREE WELFARE (UN)earned income - and the pay off of Treasury notes will HAVE to be low interest since the FED can no longer afford to raise the interest rate by much (as the debt is too large to pay off any future bonds). 

 

So the US Empire relies on US corporations making "actual" profits mainly in other countries via slave wages while the US dollars are then recycled back to the US treasury via oil profits recycled as bank loans....

"The dollar is a symbol of America’s strength, and the US will not let others disregard this symbol. OPEC members are part of the world community. Its leaders fully understand the political ramifications of pricing oil in a currency other than the dollar."

"foreign countries held a total of 7.03 trillion U.S. dollars in U.S. treasury securities as of March 2021."

So that explains how the FED was able to just print $7 trillion in the past year.

 Today, more than 61% of all foreign bank reserves are denominated in U.S. dollars, according to the International Monetary Fund (IMF). Many of the reserves are in cash or U.S bonds such as U.S. Treasuries. Also, approximately 40% of the world's debt is denominated in dollars.

 https://www.worldoil.com/news/2021/6/17/oil-prices-sink-as-rising-us-dollar-pushes-investors-out-of-commodities