Iraqi President Saddam Hussein had announced that Iraq would no longer sell its oil in US dollars just prior to the US launching its regime change mission in 2003. The US had pushed for a no-fly zone over Iraq, which was a tactical move that led to air superiority over Iraq, and the overthrow of the regime. The same tactic was used in Libya some years later.
In 2011, Nato militarily attacked Libya, enforcing a no-fly zone over the country to thwart Libyan leader Muammar Gaddafi’s attempt to create a gold-backed African currency in dinars.
Gaddafi had an estimated 150 tons of gold, and had pushed African and Middle Eastern governments to also dump the dollar.
In 2011, the editor of the Daily Bell, Anthony Wile, wrote that the central banking Ponzi scheme requires an ever-increasing base of demand and the immediate silencing of those who would threaten its existence. According to analysts at the time, if Libya and other nations were to dump the greenback, it had the potential to bring down the dollar and even the world monetary system. This concern led former French president Nicolas Sarkozy to call Libya a threat to the financial security of the world.
Gaddafi had almost as much silver reserves as he had gold, which meant his idea of creating an African currency posed a serious threat to the French franc (CFA), which was the main currency in West Africa. Even when the former president of the Ivory Coast, Laurent Gbagbo, had planned to move away from the CFA and wanted to encourage other West African nations to do so, the hand of the French was evident in his removal from power. For years he was held by the International Criminal Court without charge.
There is no question that the West wanted both Iraq and Libya’s oil, but the straw that broke the camel’s back was the insistence on moving away from the US dollar.
Syria is yet another example of a country that in 2006 switched the primary hard currency it used for foreign goods and services from the dollar to the euro, to make it less vulnerable to pressure from Washington. In US foreign policy circles, the fact that Syria had strong relations with Cuba, Venezuela, Argentina, Iran, Russia and China was already problematic, but moving away from the dollar was intolerable. As former secretary of state Hillary Clinton later admitted, the US poured arms and cash into the hands of Sunni rebels in a proxy war that continues today.
On April16, Turkey decided to repatriate all the gold it had in the US in a move to dump the dollar. President Recep Tayip Erdogan announced that everyone should be trading in gold. This was a major blow to the US economy given that Turkey is the 11th largest gold holder with 591 tons of gold worth US$23billion (R289bn). The US’s fear is that this would lead to a domino effect that would not only affect US leadership in the global economy, but bring down the US economy itself.
Two days later, on April18, Iran decided to dump the dollar and use the euro. President Hassan Rouhani and his cabinet decided the euro would be used when giving the Rial’s exchange rate in all official statements and acts. What was the reaction to that? Exactly three weeks later President Donald Trump announced the US was pulling out of the 2015 Iran nuclear deal.
This was vociferously resisted by the Europeans. France has even said it would start offering euro denominated credits to buyers from Iran for goods made in France.
It is all so hypocritical when one considers that Iran has consistently kept to its side of the nuclear deal, according to the IAEA, and Iran has never invaded anyone in its history.
But the US has more than just Turkey and Iran’s recent announcements to worry about. Last year China rolled out a payment versus payment system for Russian ruble and Chinese yuan transactions.
Earlier this year Pakistan announced that it was replacing the dollar with the yuan for trade with Beijing. If more countries follow suit, what we may see is a US recession at best, and certain global economic turmoil.
Ebrahim is group foreign editor