By Nick Giambruno
February 22, 2017
Obama pulled out his veto pen 12 times during his presidency.
Congress only overrode him once…
In late 2016, Obama vetoed the Justice Against Sponsors of Terrorism Act (JASTA). The bill would allow 9/11 victims to sue Saudi Arabia in US courts.
With only months left in office, Obama wasn’t worried about the political price of opposing the bill. It was worth protecting Saudi Arabia and the petrodollar system, which underpins the US dollar’s role as the world’s premier currency.
Congress didn’t see it that way though. Those up for reelection couldn’t afford to side with Saudi Arabia over US victims. So Congress voted to override Obama’s veto, and JASTA became the law of the land.
The Saudis, quite correctly, see this as a huge threat. If they can be sued in US courts, their vast holdings of US assets are at risk of being frozen or seized.
The Saudi foreign minister promptly threatened to sell all of the country’s US assets.
Basically, Saudi Arabia was threatening to rip up the petrodollar arrangement, which underpins the US dollar’s role as the world’s premier currency.
Donald Trump and the Saudis
Unlike every president since the petrodollar’s birth, Donald Trump is openly hostile to Saudi Arabia.
Recently he put this out on Twitter:
Dopey Prince @Alwaleed_Talal wants to control our U.S. politicians with daddy’s money. Can’t do it when I get elected.
The dopey prince that Trump is referring to is Al-Waleed bin Talal, a prominent member of the Saudi royal family. He’s also one of the largest foreign investors in the US economy, particularly in media and financial companies.
The Saudis openly backed Hillary during the election. In fact, they “donated” an estimated $10 million–$25 million to the Clinton Foundation, making them the most generous foreign donors.
Besides Hillary Clinton, the single biggest loser from the US presidential election was Saudi Arabia.
The Saudis did not want Donald Trump in the White House. And not because of some bad blood on Twitter. There are real geopolitical issues at stake.
At the moment, Trump seems determined to walk back on US support for the so-called “moderate” rebels in Syria.
The Saudis are furious with the US for not holding up its part of the petrodollar deal. They think the US should have already attacked Syria as part of its commitment to keep the region safe for the monarchy.
Toppling Syrian President Bashar al-Assad is a longstanding Saudi goal. But a President Trump makes that unlikely. That’s not good for Saudi Arabia’s position in the Middle East, nor its relationship with the US.
This is just one of the ways President Trump will hasten the death of the petrodollar.
Saudi Arabia, Islam, and Wahhabism
I loathe quoting a neoconservative historian like Bernard Lewis, but even a broken clock is right twice a day:
Imagine if the Ku Klux Klan or Aryan Nation obtained total control of Texas and had at its disposal all the oil revenues, and used this money to establish a network of well-endowed schools and colleges all over Christendom peddling their particular brand of Christianity.
This is what the Saudis have done with Wahhabism. The oil money has enabled them to spread this fanatical, destructive form of Islam all over the Muslim world and among Muslims in the West. Without oil and the creation of the Saudi kingdom, Wahhabism would have remained a lunatic fringe in a marginal country.
This is actually an apt description of Wahhabism, a particularly virulent and intolerant strain of Sunni Islam most Saudis follow. ISIS, Al Qaeda, the Taliban, and a slew of other extremists also follow this puritanical brand of Islam. That’s why Saudi Arabia and ISIS use the same brutal punishments, like beheadings.
Many Wahhabis consider Muslims of any other flavor—like the Shia in Iran, the Alawites in Syria, or non-Wahhabi Sunnis—apostates worthy of death.
In many ways, Saudi Arabia is an institutionalized version of ISIS. There’s even a grim joke that Saudi Arabia is simply “an ISIS that made it.”
After living in the Middle East for three years, it’s clear to me that many people in the region despise everything about Wahhabism. Yet it flourishes in certain Sunni communities, among people who feel they have nowhere else to turn.
It’s also widely believed in the Middle East that Western powers deliberately fostered Wahhabism, to a degree, to keep the region weak and divided—and as a weapon against Shia Iran and its allies. That includes Syria and post-Saddam Iraq, which has shifted its allegiance towards Iran.
Thanks to WikiLeaks we know the Saudi and Qatari governments, which are also the two largest foreign donors to the Clinton Foundation, willfully financed ISIS to help topple Bashar al-Assad of Syria. Julian Assange says the email revealing this is the most significant among the Clinton-related emails his group has released.
Here’s an excerpt of the relevant interview with Assange:
Interviewer: Of course, the consequence of that is that this notorious jihadist group, called ISIL or ISIS, is created largely with money from people who are giving money to the Clinton Foundation?
Julian Assange: Yes.
Interviewer: That’s extraordinary…
With all this in mind, Vladimir Putin opened an unusual conference of Sunni Muslim clerics recently. It took place in Grozny, the capital of Chechnya, a Sunni Muslim region within Russia’s southwestern border.
The conference, which included 200 of the top non-Wahhabi Sunni Muslim clerics, issued an extraordinary statement labeling Wahhabism “a dangerous deformation” of Sunni Islam.
These clerics carry serious weight in the Sunni world. The imam of Egypt’s al-Azhar mosque, one of the most important Islamic theological centers, was among them. (Egypt is the Arab world’s most populous Sunni country.)
Basically, Putin gathered the world’s most important non-Wahhabi clerics to “excommunicate” the Saudis from Sunni Islam. In other words, Putin is going for the jugular of the petrodollar system.
Russia and Saudi Arabia have been enemies for decades. The Russians have never forgiven Saudi Arabia (or the US) for supporting the Afghan mujahedeen that drove the Soviet Army out of Afghanistan. And they haven’t forgiven the Saudis for supporting multiple Chechen rebellions.
As far as I know, the British writer Robert Fisk was the only Western journalist to cover this extraordinary conference.
Who are the real representatives of Sunni Muslims if the Saudis are to be shoved aside? And what is the future of Saudi Arabia? Of such questions are revolutions made.
If the Saudis are shoved aside, it could strike a fatal blow to the petrodollar system.
The truth is, the petrodollar system is in its death throes. It doesn’t matter if the Saudis willfully abandon it, or if it crumbles because the kingdom implodes. The end result will be the same.
Right now, the stars are aligning against the Saudi kingdom. This is its most vulnerable moment since its 1932 founding.
That’s why I think the death of the petrodollar system is the No. 1 black swan event for 2017.
I expect the dollar price of gold to soar when the petrodollar system crumbles in the not-so-distant future. You don’t want to find yourself on the wrong side of history when that happens.
But that brings up another crucial point. There’s also likely to be severe inflation.
The petrodollar system has allowed the US government and many Americans to live way beyond their means for decades.
The US takes this unique position for granted. But it will disappear once the dollar loses its premier status.
This will likely be the tipping point…
Afterward, the US government will be desperate enough to implement capital controls, people controls, nationalization of retirement savings, and other forms of wealth confiscation.
I urge you to prepare for the economic and sociopolitical fallout while you still can. Expect bigger government, less freedom, shrinking prosperity… and possibly worse.
It’s probably not going to happen tomorrow. But it’s clear where the trend is headed.
It is very possible that one day soon, Americans will wake up to a new reality.
Once the petrodollar system kicks the bucket and the dollar loses its status as the world’s premier reserve currency, you will have few, if any, options.
The sad truth is, most people have no idea how bad things could get, let alone how to prepare…
Yet there are straightforward steps you can start taking today to protect your savings and yourself from the financial and sociopolitical effects of the collapse of the petrodollar.
This recently released video will show you where to begin. Click here to watch it now.