Intl Northair Mines Ltd INNHF

US Dollar Link to Oil

[sueron]

It's the link of the Dollar to oil that is so critical to the United States. The value of the Dollar and its use in global trade depends upon this link. If it's damaged then the balance of power -where the US and its Dollar are the dominant financial powers in the world — is undermined. So the Iranian issue is a prelude to a fracture in the power of the US.

We have been pointing to the importance of the Dollar oil price being critical to the value of and use of the Dollar as the sole global reserve currency for years now. That link allowed a change in Greenspan's requirements for valuable money and the replacement of Gold Bullion in the monetary system by the Dollar.

Furthermore, it allowed the Dollar to exert a stranglehold on world trade that it cannot afford to see broken. Because the Dollar, as a piece of paper, can only have value through its link to oil, the Dollar became critical to the supply of basic energy needs worldwide. Oil will remain so for as long as it's used as the prime source of energy across the globe. But change its pricing to allow the use of other currencies and the link is broken.

Consequently and over the time it takes for other currencies to take a substantial market share from the Dollar as oil price currencies, the USD will wane as far as it's replaced by other currencies in the pricing of oil.

The US will do what it takes to fight for the continuance of the link, even while it breaks down. Their success rests on the strength of their hold over the oil producers themselves. The customers of the oil producers, to which the US provides security, will continue to be made to use the Dollar as payment.