The US Keeps Loosing Allies East and West, but NATO is Blooming

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(— February 3, 2019) — Two contradictory facts in geopolitics these years are: The transition of NATO from a defensive into an aggressive alliance, which some might say is its true nature, and the fact that the U.S. is losing allies rapidly.

The economically motivated and politically propelled crisis in Venezuela is the latest test of loyalty which turned another country away from the U.S. interest. Venezuela just sold more than 15 tons of gold to the United Arab Emirates in exchange for Euro currency. Why is this important?

The Role of the Petro-Dolar

To answer this question we need to go back to Nixon’s time, more specifically to the moment  when the former US President introduced petro-dollar. It was a forced agreement to trade crude oil in US dollars, but the fact was there was not enough gold in the U.S. reserves to back this amount of money and without that the U.S. dollar has only the value of the paper it is printed on. So, Nixon declared discontinuity with gold as backed value, the dollar became strong making the U.S. economy more powerful than ever. Even Russia and China traded oil in U.S. dollars.

The rule of petro-dollar remained undisputed for decades but the world always turns. Some of the largest oil producers in the world were coming to the idea to ditch the petro-dollar in order to strengthen their own currency and boost the economy. The very thing that made the U.S. the largest economy in the world is ironically the Achilles Heel of the U.S. economy. The petro-dollar is vulnerable and needs protection. Military protection no less, because killing the petro-dollar means the end of the U.S. as we know it.

“War on Terror”

Iraq was amongst the first countries that tried to ditch the petro-dollar. Their idea was to establish trade of crude oil with Libya and Afghanistan in their own national currency paving the way for other countries to do the same. We all know what happened next.

One of the strongest U.S.’s allies in the destruction of Libya was France who owed hundreds of millions of dollars to Qaddafi. For Paris, it was the opportunity to get rid of a substantial debt.

“In contemporary political debates, the Libya intervention tends to be remembered as an intra-administration soap opera, focused on the role Clinton — or Susan Rice or Samantha Power — played in advising Obama to go through with it” reads an article in Everybody knows it’s fixed but no one really cares. Previously, the U.S. successfully conducted the experiment on what would happen if NATO led by the U.S. attacked and destroyed a sovereign country. Yugoslavia, a country that once dominated the Balkan peninsula, ceased to exist and broke up into several small states. Almost all of them are now NATO members.

Defending Petro-Dollar Gets More Complicated

The next counties who tried to ditch the petro-dollar were Russia and China. Here is where it all gets complicated because taking military intervention against them is not an option – they are more than capable of fighting back.

The only thing the U.S. could do was to bring back a cold war, and so they did. First with changing the pro-Russian government in Ukraine, forcing the Russian Federation to annex Crimea.  Washington introduced sanctions to the Russians and forced European allies to follow suit and do the same. Since the European Union members economy is linked to Russia, the imposed embargo backfired with Germany, Italy, Greece and many other countries that trade with Russia. Even France’s economy was hit hard but they pledged unconditional loyalty to the U.S. NATO started encroaching dangerously close to the Russian border but without unity that was shaken during the bombing of Yugoslavia and Montenegro.

The result of the imposed sanctions to Russia was the instability of the ruble, the Russian currency, and that maintained the petro-dollar as oil trading currency.

A Price to Pay

Wars for oil deeply disturbed the U.S. relationship with allies who understood that it’s all about interests and has nothing to do with democracy. It also brought back the arms race which, among other things, set some leaders of allied countries to selfdestruct mode if they follow the US. Turkey was the first NATO country that openly confronted the U.S. after Washington decided to support and supply the Kurdish fighters in Syria in order to overthrow the Russia backed President Assad. Kurdish fighters are marked as mortal enemies to Ankara so the Turkish president Recep Tayyip Erdoğan start colluding with Russia. The ties between Turkey and the Russian Federation grew stronger after Russia warned Erdoğan about the coup in his country and saved his life. The coup failed and Erdoğan accused Washington for the attempted coup.

No Way Out

It became obvious that the U.S. will defend the petro-dollar by all means, and it is understandable. The entire U.S. economy relies on the petro dollar. The U.S. indeed tried to find a way out. American oil companies started fracking – a Hydraulic Fracturing Solvent that boosted domestic oil production in 50%, but it was very expensive. Then the largest oil producers in the world deliberately lowered the prices of crude oil per barrel so fracking became highly unprofitable. Fracking also induced huge environmental issues in the U.S.

It also became obvious that swapping petro-dollar with domestic currency is impossible due to the very aggressive policy of the U.S. So, the “enemies of the U.S.” have found another solution – trading oil in gold.

The world quickly realized what trading in gold means. Gold has universal value that will boom in years to come as more countries ditch petro-dollar for gold. Also, gold is not a currency of any country so who to attack?

This was realized quickly by the East and the West, North and the South. It is expected that the demand for gold is going to skyrocket on all the World’s markets. An interesting thing to note is that Venezuela has gold. It also lays on the largest oil reserves in the world, even larger than Saudi Arabia. Now it makes sense why the U.S. rushed to “install democracy” in this country, one way or another. It will lose more allies along the way; however, this is the price that Washington is prepared to pay in the blink of an eye.