Expert: Oil Price Wars Fatally Wounded the Petrodollar

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Expert: Oil Price Wars Fatally Wounded the Petrodollar

“For the first time, too, we see the end of the petro-dollar as a system for recirculating oil revenues to Wall Street.”

“The fall in the price of oil has suddenly created huge financial turbulence, which is endangering the global financial system.”

Alastair Crooke is a former MI6 official, the director and founder of Beirut-based Conflicts Forum and formerly adviser on Middle East to EU Foreign Policy Chief Javier Solana.

This is an excerpt from an interview that originally appeared in Today’s Zaman (Turkish English-language daily)

Crooke, who was in Turkey for the İstanbul Forum, has answered our questions in this regard including the question as to where Turkey stands in the world.

Would you tell us about your ideas in regards to the “financialization of the global order”?

For some time, the international order was structured around the United Nations and the corpus of international law, but more and more the West has tended to bypass the UN as an institution designed to maintain the international order, and instead relies on economic sanctions to pressure some countries.

We have a dollar-based financial system, and through instrumentalizing America’s position as controller of all dollar transactions, the US has been able to bypass the old tools of diplomacy and the UN — in order to further its aims.

But increasingly, this monopoly over the reserve currency has become the unilateral tool of the United States — displacing multilateral action at the UN.

The US claims jurisdiction over any dollar-denominated transaction that takes place anywhere in the world. And most business and trading transactions in the world are denominated in dollars.

This essentially constitutes the financialization of the global order: The International Order depends more on control by the US Treasury and Federal Reserve than on the UN as before.

When did this start?

It started principally with Iran and it has been developed subsequently. In a book, “Treasury’s War,” the tool of exclusion from the dollar-denominated global financial system is described as a “neutron bomb.” When a country is to be isolated, a “scarlet letter” is issued by the US Treasury that asserts that such-and-such bank is somehow suspected of being linked to a terrorist movement — or of being involved in money laundering. The author of “Treasury’s War” [Juan Zarate], who was the chief architect of modern financial warfare and a former senior Treasury and White House official, says this scarlet letter constitutes a more potent bomb than any military weapon…..More Here

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Expert: Oil Price Wars Fatally Wounded the Petrodollar