Why The U.S. Dollar Will End In Collapse

Recently the price of gold was pushed upwards due to the possibility of a US military strike against Syria. As US Secretary of State, John Kerry, and US President, Barack Obama, tried to convince the world that for humanitarian reasons, it was necessary to punish the Assad regime for their alleged involvement in a chemical attack that took place in Syria, much of the rest of the world did not share their point of view. In their speeches, both the US President and the US Secretary of State often pointed out to the senseless killings of some 1400 innocent victims. Yet, while they publicly condemn this atrocious act of violence, thy remain silent about the on-going political strife that exists in Africa that results in the brutal killings of thousands of individuals, and the displacement of hundreds of thousands of innocent individuals. This lack of consistency in their policy leads me to think that it has nothing to do with human rights at all. Surely, if their concern was really the safety of individuals and in order to have a consistent meaningful policy, most of their attention should be focused on the African countries where a lot more than 1400 individuals including women and children have been massacred.

Obviously, the US government has an ulterior motive and they are merely using the killings of innocent citizens as a smoke screen. It is evident, that the killings of innocent individuals are not really the major issue, but rather the potential of a disruption of the flow of oil is the main problem. For without oil, the US economy will sink and the massive military machine of the US will be put in jeopardy.  Also, without the flow of oil, the US petrodollar is at risk.

A petrodollar is a United States dollar earned by a country through the sale of its petroleum (oil) to another country. The term was coined in 1973 by Georgetown University economics professor, Ibrahim Oweiss, who recognized the need for a term that could describe the dollar received by petroleum exporting countries (OPEC) in exchange for oil. And, of course a collapse in the petrodollar will ultimately lead to the end of the US dollar being the reserve currency of world. In such an instance, the price of gold will soar. So, whether the US government uses peace or aggression in the Middle East, I maintain that their sole objective is to ensure the flow of oil and thus the survival of the greenback as well as other fiat currencies.

Meanwhile, while the US government feel it necessary to flatten Syria, despite the fact that Syria has not made any direct threat against the US in any way, after some thirty years of a freeze in relationships between their two countries the US President Obama and Iranian President Hassan Rouhani spoke by phone in the first conversation between an American and Iranian president since 1979.

On Friday, the US president revealed that the two leaders had spoken. He said he believes the two countries can reach a “comprehensive solution” on Iran’s nuclear program, and said he and Rouhani had both directed their diplomats to pursue an agreement. In a press conference, and before talking about the US government funding that needs to be approved before Tuesday, he gave an update on the relations between the U.S. and Iranian governments.

“Just now I spoke on the phone with President Rouhani,” Obama said. “The two of us discussed our ongoing efforts to reach an agreement over Iran’s nuclear program. I reiterated to President Rouhani what I said in New York: While there will surely be important obstacles to moving forward, and success is by no means guaranteed, I believe we can reach a comprehensive agreement.”

The call came after Secretary of State John Kerry met on Thursday in New York with his Iranian counterpart on the side-lines of the United Nations session. The White House had apparently floated the possibility of Obama meeting, casually, with Rouhani in New York, but U.S. officials said the Iranians nixed the idea.

While many U.S. lawmakers, as well as Israeli leaders remain sceptical about Obama’s claim that Rouhani represented “new leadership” in Iran, the conversation has resulted in many complaints that Obama is ignoring Republicans while engaging America’s adversaries.  Kevin Smith, a spokesman for House Speaker John Boehner, tweeted: “[Obama] negotiates with Iran, Putin but not Congress #shocking.”

However, it appeared the two countries still have a long way to go resolving their relations. On Friday the Wall Street Journal reported that U.S. officials alleged Iran have hacked unclassified Navy computers in recent weeks. If true, it would mark one of the most serious infiltrations of government computer systems by the Iranians.

The countries’ disagreements are grave and plentiful. Relations have experienced few ups and countless downs since the 1979 Islamic Revolution and subsequent hostage crisis at the U.S. Embassy in Tehran.

While any peace accord between these two countries would be admirable, it is unlikely that the current political turmoil in the Middle East will end any time soon. All it would signify is a decrease in Middle East tensions which is likely to be a bearish factor for the crude oil market, and may result in some added selling pressure to the gold market.

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