by Geoffrey Grinder, Now The End Begins:
The petrodollar system originated during the Yom Kippur war in 1973 when the US, facing economic challenges and an oil embargo, struck a deal with Saudi Arabia.
One of the main things that gives the United States global dominance is the fact that the US dollar is the world’s reserve currency. In 1973, the Petro Dollar System was established with Saudi Arabia, giving payment in US dollars to oil-exporting nations. The petrodollar system replaced gold as the standard of value and helped the US maintain its dominance in international trade. Now Mohammed bin Salman has pulled the plug on the whole thing by not renewing its contract with the United States. From a global perspective, there are few bigger stories right now than this one, this is huge.
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In June 1974, the US and Saudi Arabia signed an 80-year petrodollar deal that was a key part of US global economic influence. Four days ago, that deal was scrapped by Mohammed bin Salman, potentially throwing the global financial order into chaos. From this point on, the move to CBDC is officially underway, and it will be a race to see who is able to corner that market. Saudi Arabia has made their intentions quite clear. Digital money is the currency of the future, and that future starts right now.
Saudi Arabia’s petro-dollar exit: A global finance paradigm shift
FROM THE BUSINESS STANDARD: Originally signed on 8 June 1974, the deal established two joint commissions, one based on economic cooperation and the other on Saudi Arabia’s military needs. At the time, it was said that it heralded an era of close cooperation between the two countries, says Katja Hamilton of BizCommunity.
American officials at the time expressed optimism that the deal would motivate Saudi Arabia to ramp up its oil production. They also envisioned it as a blueprint for fostering economic collaboration between Washington and other Arab countries.
The crucial decision to not renew the contract enables Saudi Arabia to sell oil and other goods in multiple currencies, including the Chinese RMB, Euros, Yen, and Yuan, instead of exclusively in US dollars. Additionally, the potential use of digital currencies like Bitcoin may also be considered.
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