by Ken Schortgen, The Daily Economist:
In a fascinating dichotomy where both the United States and Russia are implementing different foreign policy angles that will inevitably kill the petrodollar, their main target happens to be the same in the Arab Kingdom of Saudi Arabia.
Back in 1973 Nixon’s Secretary of State Henry Kissinger went to Saudi Arabia to forge what would become the next global backstop for keeping the dollar as the world’s reserve currency. But in doing so the U.S. made a promise to protect the Kingdom from foreign invasion, and in return the Saudi’s would ensure that OPEC used only dollars in their global selling of oil.
But what the U.S. did not anticipate was the fact that the Saudi monarchy followed a radical form of Islam that was hell bent on seeing all other sects utterly destroyed. And through their use of money, arms, and terrorism over the past 40 years, the U.S. has been forced to intervene in many of these unprovoked attacks on Saudi’s Arab neighbors, and have played a major role in both toppling governments, as well as aiding terrorism.
And in 2017 with the election of Donald Trump, this all appears about to change, and could signal that the new U.S. President is content with letting the old petrodollar agreement dissolve away.
Unlike every president since the petrodollar’s birth, Donald Trump is openly hostile to Saudi Arabia.
The Saudis did not want Donald Trump in the White House. And not because of some bad blood on Twitter. There are real geopolitical issues at stake.
At the moment, Trump seems determined to walk back on US support for the so-called “moderate” rebels in Syria.
The Saudis are furious with the US for not holding up its part of the petrodollar deal. They think the US should have already attacked Syria as part of its commitment to keep the region safe for the monarchy.
Toppling Syrian President Bashar al-Assad is a longstanding Saudi goal. But a President Trump makes that unlikely. That’s not good for Saudi Arabia’s position in the Middle East, nor its relationship with the US.
This is just one of the ways President Trump will hasten the death of the petrodollar. – International Man
On the other side of the gambit is Russia’s President Vladimir Putin, who has not only sided with Syria’s Bashir Assad in fighting the Islamic Caliphate’s attempts to topple the government, but in a recent and unprecedented move invited Sunni clerics to a conference in which they castigated Saudi Wahabism as being deformed in the construct of Islam.
At the end of August, a meeting of Muslim clerics and scholars convened in the Chechen capital of Grozny to forge a consensus on the subject of ‘who constitutes a Sunni.’
Sunnism, the 200 or so Sunni clerics from Egypt, South Africa, India, Europe, Turkey, Jordan, Yemen, Russia warned, “has undergone a dangerous deformation in the wake of efforts by extremists to void its sense in order to take it over and reduce it to their perception.”
The Muslim world is currently under a siege of terror, led by a deviant strain that claims religious authority and kills in the name of Islam. So the Grozny participants had gathered, by invitation of the Chechen president, to make “a radical change in order to re-establish the true meaning of Sunnism.”
If their final communique was any indicator, the group of distinguished scholars had a very particular message for the Muslim world: Wahhabism – and its associated takfirism – are no longer welcome within the Sunni fold.
Specifically, the conference’s closing statement says this: “Ash’arites and the Maturidi are the people of Sunnism and those who belong to the Sunni community, both at the level of the doctrine and of the four schools of Sunni jurisprudence (Hanafi, Hanbali, Shafi’i, Maliki), as well as Sufis, both in terms of knowledge and moral ethics.”
In one fell swoop, Wahhabism, the official state religion of only two Muslim countries -Saudi Arabia and Qatar – was not part of the majority Muslim agenda any longer. – Russia Today
The monetary stronghold for the petrodollar system has already been shattered when Russia and China signed an agreement to sell oil in both Yuan and Rubles a few years ago, and it appears that very soon the final matchstick in the 1973 agreement will fall as well with the coordinated efforts of the U.S. and Russia in eliminating ISIS and the independent terror groups that were spreading Saudi Wahabism through the Kingdom’s financing them with money and arms. And when this happens for good it will create a great vacuum in the global financial system, and all bets are off as to who will win the crown that replaces the dollar as the world’s reserve currency.