The Oil & Petrodollar Connection to the Recent Military Conflict in Iraq & the Future of the Dollar as a Petrodollar.
The Oil & Petrodollar Connection to the Recent Military Conflict in Iraq & The Future of the Dollar as a Petrodollar.
In this paper, I intend to assess the validity of claims that there is a definite connection between the petrodollar and recent military conflicts. I will also look at why the United States needs to keep the dollar as the global reserve currency to secure their global hegemony for the future and what other contenders for the role of reserve currency are emerging.
The Petrodollar Connection with the Recent Military Conflict in Iraq There is a history of violence related to oil. A major example of this is World War Two. In 1945, Albert Speer, the German Armaments minister told his Allied forces captors that “the need for oil was certainly a prime motive” for Hitler to invade Russia even though Hitler had told the German people that the motive was to “save the western world” from barbaric and godless communists (Black, 2007). Now with the trade of oil linked so closely to the hegemony of the US, this history of violence is set to continue.
After World War Two, world leaders met at Bretton Woods to negotiate a new international monetary system. The front runners in the negotiations were the United States and the United Kingdom. John Maynard Keynes, the UK’s leading economist, called for more realist policies and believed that no national currency would be strong enough to be the global reserve currency. He suggested that a new currency would be created (which he called ‘bancor’) and that it would be administered by a world central bank. This did not fit in with the policies of the US and their leading economist Harry Dexter. The World War had left many countries in debt and the UK was no exception. The UK had borrowed money from the US in order to fund their participation in the war. Therefore, the US was able to get their way when it came to the matter of negotiating the future of the global currency at Bretton Woods. The US dollar
In this paper, I intend to assess the validity of claims that there is a definite connection between the petrodollar and recent military conflicts. I will also look at why the United States needs to keep the dollar as the global reserve currency to secure their global hegemony for the future and what other contenders for the role of reserve currency are emerging.
The Petrodollar Connection with the Recent Military Conflict in Iraq There is a history of violence related to oil. A major example of this is World War Two. In 1945, Albert Speer, the German Armaments minister told his Allied forces captors that “the need for oil was certainly a prime motive” for Hitler to invade Russia even though Hitler had told the German people that the motive was to “save the western world” from barbaric and godless communists (Black, 2007). Now with the trade of oil linked so closely to the hegemony of the US, this history of violence is set to continue.
After World War Two, world leaders met at Bretton Woods to negotiate a new international monetary system. The front runners in the negotiations were the United States and the United Kingdom. John Maynard Keynes, the UK’s leading economist, called for more realist policies and believed that no national currency would be strong enough to be the global reserve currency. He suggested that a new currency would be created (which he called ‘bancor’) and that it would be administered by a world central bank. This did not fit in with the policies of the US and their leading economist Harry Dexter. The World War had left many countries in debt and the UK was no exception. The UK had borrowed money from the US in order to fund their participation in the war. Therefore, the US was able to get their way when it came to the matter of negotiating the future of the global currency at Bretton Woods. The US dollar
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