By Rudo de Ruijter,
Those who use
dollars outside the US continuously pay a contribution to
the US. It comes in the form of an inflation of 1.25 million
dollars per minute. This is the result of the fast increase
of the US foreign debt. Half of all US’ imports are simply
added to the foreign debt and paid for by the foreign dollar
holders through inflation.
dollar holders do not seem to realize, that the dollar rate
they are looking at, is nothing more than a dangerous
façade. If they don’t understand what is still keeping it
upright, the façade may hit them by surprise.
camouflaged, the dollar is at the center of several US’
1. World wide
demand for dollars
shopping for the US
and still continuing
reserves Japan and China
6. How do you
steal oil reserves?
1. World wide demand for dollars
Up to 1971, each
US dollar represented a fixed amount of gold. The US
disposed of enormous gold reserves, which covered the total
value of all issued dollars. When foreign banks had more
dollars than they wanted, they could exchange it into gold.
That was the main reason why the dollar was accepted world
In 1971 the gold
guarantee for the dollar was lifted. In fact, this was an
emergency move of president Nixon: the Vietnam war had cost
more than the US could afford and more dollars had been
printed than the gold reserves allowed. Since then, the
value of the dollar is established by the law of offer and
demand on the exchange markets.
In the early
seventies the US still produced enough oil for its own
consumption. To protect its own oil enterprises against
foreign competition, oil imports were limited. In exchange
for the lift of limitations, the OPEC countries promised
they would only accept dollars for their oil. The dollar was
the most used currency in the world trade. So nothing
everyone who wants to import oil, has to buy dollars first.
 That is where the fun starts for the US. Almost
everybody needs oil, so everybody wants dollars.
Oil buyers from
all over the world hand over their yens, crowns, francs and
other currencies. They receive greenbacks in return. With
those dollars they go and buy oil in the OPEC-countries. The
OPEC-countries will spend the money again. Of course, they
can do that in the US, but also in all other countries in
the world. Everybody wants dollars, for everybody will need
2. Free shopping
In this oil trade
a huge amount of dollars is needed. Many dollars will stay
in the permanent money cycle outside the US, that is to say
between the OPEC-countries and other countries. The US
consumes 25 percent of the world oil production. In 2004 it
produced about half of its needs itself. (Tendency quickly
deterioating: in 2006 it needed to import 60 percent.)
At the start
there were not enough dollars for this. They had to be
printed.  It cost the US paper and ink. But then the
enormous benefit arrives: there is only one way to get those
nice new greenbacks out of the
country: the US goes shopping abroad. And as these
greenbacks remain abroad permanently, the US never delivers
something in return. So, these shoppings are for free!
shopping did not only occur at the start. As soon as more
dollars are needed in the oil trade, by increase in price or
volume, that means free shopping for the US.
The same thing
happens when the number of dollars in the rest of world
trade increases. Globalization, free world trade, world wide
privatisations of public services, like gas, water and
electricity supply, phone and transportation companies,
swallow enormous amounts of dollars. Each minute more
dollars disappear in every little corner of the globe. And,
in the first place, each time this means free shopping for
Of course those
free shoppings create a debt for the US. For, some day, the
foreign countries could use those dollars to purchase things
in the US. Then, finally, the US has to deliver “something”
So, to avoid
problems, the US should take care, that their purchases and
sales stay balanced. After 1971, when more dollars were put
into circulation, only in 1973 the US sold more then it
bought. Afterwards the
situation declined, and each year the US
bought more foreign goods they
never paid for. 
the year 2004 alone, the shortage on the trade balance was $
650 billion!  On a population of 300 million people this
means, that on average, each US-citizen purchased for $
2,167dollars of foreign goods they did not pay for!
In the same
period, there were no improvements on the balance of
payments. So the foreign debt of the US raised with $
650.929.500.000 in one year. This is one and a quarter
million dollar per minute!
deficits are the biggest with China ($162 billion), Japan ($
76 billion), Canada ($ 66 billion), Germany ($ 46 billion),
Mexico ($ 45 billion), Venezuela ($ 20 billion), South-Korea
($ 20 billion), Ireland ($ 19 billion), Italy ($ 17 billion)
and Malaysia ($ 17 billion) .
rate of the dollar
which purchases more than it sells, will see the value of
its money diminish. If you can not do a lot with a
currency, demand decreases and its exchange value goes down.
But what is true for all other currencies, is not true for
the US dollar. As long as the whole world needs dollars to
purchase oil, there will always be demand.
US consumes ¼ of
world oil production. When the dollar rate climbs, only the
price for the other ¾ of oil consumers will get higher. For
the US the price stays the same.
oil-price climbs, more dollars are needed in the cycle. If
oil consumption remains the same, those extra dollars can be
printed and added to the cycle without decline of the
exchange rate. Since the US imports 1/8 of world oil
consumption, 7/8 of the extra dollars are needed outside the
US. This means that at each increase of the oil-price, the
US finances the increase with new greenbacks and sells 7
times as many new dollars abroad. Free shopping and making
The US disposes
of a wide range of tricks to influence the exchange rate.
Put more dollars in circulation when the rate goes higher
than wanted. Buy back dollars themselves when demand
decreases, for instance by issuing bonds.
solution costs money: the interest. All those interests
together have reached such high levels, that new loans have
to be contracted each time to pay for them. US debts
increase faster each time!
3. Bankrupt and still continuing
you can see the current debt and you can see how much it
grows each second… 45 % of it is to be paid back to foreign
borrowers. The foreign debt is that high, that the US cannot
pay back her debt anymore. The US is bankrupt.
dollars are still traded normally. For the purchase of oil
and gas they are still needed. And, misled by an apparently
healthy exchange rate, the world trade continues to do its
transactions in dollars. Business as usual?
According to the
usual logic of economics, a lower rate of the dollar should
lead to more exports from the US and less imports by the US,
as foreign importers can buy cheaper in the US then.
However, as long as foreigners are mad enough to accept
dollars, the US doesn’t find it a problem to issue some more
of these green debt bills.
Pay a bit more
for Chinese socks and electronics from Japan? No problem.
The US just increases her imports and foreign debt a bit
harder. Paying more dollars for a product means inflation.
And one percent of inflation means that at the same time the
value of the tremendous foreign debt dereases with one
percent. So the US has no interest at all in putting a break
on its imports!
In the oil trade,
generally, a lowering dollar rate does have a logical
consequence. Oil exporters will not accept a lower return.
When the dollar falls with 10 percent, they will raise the
oil price 10 percent, so the value remains the same.
If you don’t need
dollars for oil anymore…
If US-dollars are
no longer necessary to purchase oil, there is no advantage
for the rest of the world trade to use the dollar - only
disadvantages. The dollar does not represent any weight in
gold anymore and the enormous debt will lead to the logical
disastrous consequences. The dollar would collapse.
foreigners don’t accept dollars anymore, the US cannot print
dollars to shop on the expense of the rest of the world. US
could not pay its expensive army. It would loose its
Vanishing of the
The collapse of
the dollar will have a miraculous side effect for the US.
When dollars are worth nothing, the foreign debt will have
disappeared too. This debt is composed by dollars abroad. In
the extreme case they will become as worthy as old paper.
Unfortunately, the collapse will also be accompanied by the
collapse of banks, enterprises and international
organizations, which have coupled their destiny to the
4. Dollar reserves Japan and China
group of dollar purchasers is formed by the central bankers
in various countries. Central banks keep strategic reserves.
These are reserves with which they can buy back their own
currency, if large quantities of it are offered on the
exchange markets. This way, they prevent that the rate of
their own currency would drop.
are preferably held in the best accepted currency in the
world, so up to now in dollars. However, in China and Japan,
but also in Taiwan, South-Korea and other countries, these
dollar reserves have grown way above the necessary strategic
This is not
because central banks like to hoard US-dollars that much. On
the contrary. Those countries export a lot and that is why
dollars flow in massively. They have to be exchanged into
local money to pay the workers and raw materials. The strong
demand for local money would normally raise its rate, and
then the products would become more expensive for
foreigners. So, in order not to endanger the country’s
export position, the local central banks try to keep the
rate of their money stable. They do so by buying the
countries this is a big problem, because for all these
hoarded dollars the central banks issue local money. So, in
fact, the workers receive inflation of local money as
payment for their exported products. 
Over time they
have exported many months of work and material for nothing.
At the central banks these dollars do not make much profit.
They can be exchanged into obligations and US-bonds and
offer a bit of interest. But even this interest cannot
really be called an earning. The US simply pays the interest
out of an spiraling increase of the foreign debt, so, from
the inflation of the dollar.
value of the hoarded dollars is subject to the variations in
the dollar rate. On top of that, the risk of a dollar
collapse is never far away. The Asian central banks are
trapped between the necessity to lower their dollar
reserves, the need to buy dollars to keep their local
currency stable and eventually to buy dollars when its rate
is in danger to fall on the global currency markets.
Meanwhile the US
lets its foreign debt increase faster and faster. How long
can this go on?
At the same time
experts of the Asian Development Bank think, that the rate
of the dollar should decrease by 30 to 40 percent!  With
such a decrease there is a big risk, that banks and
enterprises want to get rid of their dollars as quick as
possible and central banks will no longer be willing, or
able, to avoid the total collapse. Who sells his dollars
first is lucky, who waits has just bad luck.
5. Camouflaged conflicts
To keep the
permanent demand for dollars going, oil sales must remain in
dollars. That is why the US tries to keep as much influence
as possible, as well on the US owned IPE and NYMEX world oil
markets, as with the locals in power. By doing so the US
secures its oil supply at the same time. Beyond that,
lucrative contracts can be obtained from the local power,
with which a maximum of benefits can be seized from the oil
Fear always wins
But when the
locals in power do not want to sell their oil in dollars
anymore, the US has a problem. Then, the US-president will
not explain how dependent the US is on the dollar demand.
The conflict is always camouflaged. And to do so, always an
emotional theme is choosen. In times gone by this was the
danger for communists, today it is the danger for
terrorists, fundamentalists and other popular bogies, like
“the enemy has weapons of mass destruction” or “the
enemy tries to make nukes.”
The fact that
there is, rationally, not a single proof, does not matter.
The emotions always win. Even the fact, that these
accusations can be turned around and then can be proved, is
noticed by hardly anyone. The US has weapons of mass
destruction and has used them; the US has nukes and has used
them, and even threatened with them still in 2000.
But once again,
at the moment accusations are loaded with emotions humans
switch off their intelligence. Reason is no argument for
peace anymore. The theater is only about the launched
accusations. And because, as a result, only specialists of
weapons of mass destruction or nukes are called upon to give
their opinion, nearly nobody finds out what the conflict is
since many years, the US tries to pull down president
Chavez, pretexting he is a dangerous communist. Chavez has
nationalized the oil industry and has set up Barter-deals to
export Venezuelean oil in exchange for medical care from
Cuba and others. In Barter deals there is no necessity for
dollars and the US has no profit from the oil trade.
Until 1990 the US
maintained lucrative commercial contacts with Saddam
Hussein. He was a good ally. For instance, in 1980 he had
tried to free the hostages at the US-embassy in Teheran.
But in 1989
Saddam accused Kuwait of flooding the oil market and making
the oil price go down. The following year Saddam tried to
annex Kuwait. It led to an immediate turn around of the
attitude of the US. With the annexation Saddam would dispose
of 20 percent of world oil reserves. The Iraqis were chased
out of Kuwait by the US, with an alliance of 134 countries,
and condemned to water and bread by a UN-embargo that lasted
Although the US
sought a way to re-establish its influence in Iraq, Saddam’s
switch to the euro on November 6, 2000 , would lead to
the US invasion. The dollar sank away and in July 2002 the
situation got that serious, that the IMF warned that the
dollar might collapse.  A few days later the plans for
an attack were discussed at Downing Street.  One month
later Cheney proclamed it was sure now, that Iraq had
weapons of mass destruction.  With this pretext the US
invaded Iraq on March 19, 2003. The US switched back the oil
trade into dollars on June 5, 2003. 
There is a huge
difference between trading Iraqi oil in euros and trading it
in dollars. This will be explained below. (See: “How do you
steal oil reserves?”)
The US is in
conflict with Iran, since it was thrown out of the country
in 1979. According to the US, Iran is a dangerous country of
position of Iran, between the Caspian Sea and the Indian
Ocean, complicates US ambitions to control the rich reserves
of oil and gas on the East side of the Caspian Sea. To
transport this oil and gas to world markets without crossing
neither Russia, nor Iran, pipelines had to be built through
Afghanistan. Plans were made in the early nineties, but the
pipelines are still not there. Meanwhile the US tries to
frustrate all competing projects of other countries.
Of course, this
led to multiple conflicts of interest with Iran. George W.
Bush would pretext the presence of Osama bin Laden to start
a war against Afghanistan. 
In 1999 Iran
publicly stated it wanted to accept euros for its oil as
well. Iran sells 30 % of its oil production to Europe, the
rest mainly to India an China and not a drip to the US, as a
result of an embargo established by the US itself. In spite
of Bush’ threatening tale, mentioning the country in his
famous “axis of evil”, Iran started to sell its oil in euros
from spring 2003.
After that, Iran
wanted to establish its own oil-bourse, independent from the
IPE and NYMEX. It would start on 20 March 2006. Considering
the very weak health of the dollar at that time, a success of
this bourse could have led to a catastrophe for the dollar
and thus for the US. That is why tensions were very high at
the beginning of 2006. 
opening of the oil-bourse was postponed. After that Putin
established an oil bourse in Russia as quickly as possible,
which took away the interest of the Iranian oil bourse. 
The US accuses Iran of wanting to make nukes. This is not
new. Iran and other Arabic countries feel threatened by the
nuclear arsenal of Israel, that is not a member of the
Non-Proliferation Treaty. In 1981 Israel has bombed the
nearly completed power plant in Osirak, in Iraq.
Since, several Arab countries consider to get nuclear arms
to counter the Israelian threat.
It may seem strange, that a country disposing of oil, wants
nuclear energy. Iran exports oil, but imports refined oil
products. These are needed for lighting, heating, transport and
industry of its growing population. For many Iranians the real
price of these products would be too high. That is why they are
sold cheap, with losses for the Iranian treasury. The switch to
electricity should provide affordable energy for the whole
country. Iran needs the revenues from its oil exports to finance
the import of many other products it needs. That is the reason
why Iran does not refine and consume its oil itself.
The bombing of power plants remain
an interesting objective for the adversaries of Iran.
If Iran cannot dispose of nuclear energy, it would
have to decide to consume its oil, instead of selling it in
euros. Lately, the chief of the IAEA, ElBaradei, warned the
adversaries not to attack the Iranian facilities. 
the IAEA and the US have conceived a
masterly plan to take possession of the
world market for nuclear fuel, in concert with a few other
countries. They are using Iran as a pretext and a test.
With this plan the demand for dollars would be secured for a
long time, even after the oil age. 
Since 8 June 2006
Russia too has turned its back to the dollar.  By
selling the dollar surpluses to central banks, Putin took
care that it had no influence on the dollar rate. However,
the basis for the world wide dollar demand has decreased a
lot. The US needs Russia for its plans to take possession of
the world market for nuclear fuel, so a revenge by the US is
6. How do you steal oil reserves?
There is still
another aspect to the abuse of the dollar. During the
demonstrations against the US-invasion of Iraq, a lot of
demonstrators understood it was not about weapons of mass
destruction. Iraq has wold’s second largest oil reserves.
Some demonstrators thought, the US was after the oil. And
that is also true. But how can you steal oil reserves, which
are in the ground and so huge you cannot take them with you?
You do it with
currencies. By imposing, that this oil can only be traded in
dollars, in one move the US becomes owner of this oil. The
US is the only country, which has the right to print dollars
and thus can dispose of the oil any time. Other countries
that want to buy this oil, have to buy dollars first. In
fact they pay their oil to the US at that moment. The
dollars they receive are rights to collect a quantity of
oil. (Just like when you go to Ikea to buy furniture, you
pay first and you receive a note, with which you can collect
your furniture at the shop’s back door.) So, basically,
dollars are rights to collect oil. And because everybody
needs oil, everybody wants these green notes.
switch to the euro at the start of November 2000 was not
just an attack on the rate of the dollar. The switch implied
at the same time the US could not dispose freely of the oil
anymore. The US would have to buy euros to dispose of it.
back the dollar on 5 June 2003 , the US has,
financially, free disposal of the Iraqi oil again. Now it is
a matter of installing a strawman-government and to prevent
the Iraqi oil trade from switching away from the dollar once
again. That is easy to say, but turns out to be more
difficult than expected.
economy is not limited to the US. Oil reserves traded in
dollars belong to it too. Also enterprises, banks and
investments, anywhere in the world, belong to it when paid
with dollars. They are like small islands of the dollar
economy. Benefits and dividents are flowing back to the
owners. The value of the investments is influenced by the
rate of the dollar. Oil sellers, receiving their proceeds in
dollars, are actors in the dollar-economy and usually behave
like perfect representatives of the US’ interests. They
consider this as their own interest.
7. Euro versus
1993 the euro is quoted. In July 2005 the rate is identical to what it was at its introduction: $ 1.22. The new currency has
experienced quite some fluctuations during its short life.
From the end of 1998 the euro slides away, until the moment
Saddam Hussein switches to the euro in November 2000.
Although the US switched the oil trade back into dollars in
June 2003, the euro continued its rise. Since spring 2003
Iran had started to sell oil in euros.
The euro has
become a small world currency. Between July 2004 and July
2005 the part of the dollar in world trade went down from 70
percent to 64 percent. A bit less then half of these 64
percent is related to US foreign trade. If the euro wants to
become as mighty as the dollar, it has still a long way to
In principle, the
euro contains the same risks as the dollar. As long as there
would be a motor for a permanent demand for euros like, for
instance, oil sales in euros, the eurozone could make debts
and let it increase indefinitely.
To avoid such
debts, the eurozone would have to export the equivalent of
all euros needed outside its borders and keep the same
amount in foreign currencies in their central bank. Why
would they? The credit trick worked fine for the US during
more than 30 years!
producing countries would sell oil in two or three different
currencies, like it has been considered in the past, this
simply means that the three involved countries can do the
same trick as the US does now. In the long run it would
multiply the problem by three.
The only solution
for this problem would be that oil selling countries accept
all currencies on the market. Tehran has already taken into
consideration to accept more than one currency and not just
the euro. Step by step.
8. Green cancer cells
Because the US
let its “foreign debt” increase indefinitely and even uses
military power to keep the related advantages going, we
cannot speak of a normal foreign debt, like we know it in
trade relations among other countries of the world. What the
US does is robbery. You can also call it swindle or an
imperial tax imposed on the users of dollars. But there is
Each dollar bill
is an IOU of the US, a promise to give something in return.
Due to the gigantic quantities the US has put into
circulation, the country is not able to redeem these debts.
It is bankrupt. Only the rate of the dollar keeps up the
appearance, that nothing is afoot. The obligation to pay gas
and oil in dollars keeps a permanent demand going.
However, the rate
is held in shape artificially, like by the hoarding of the
central banks in China, Japan, Taiwan and other countries.
Because these hoardings mean an impoverishment of these
countries and because the US speeds up the debt building
indefinitely, there will be a moment that these central
banks have to stop hoarding dollars. So the question is not
IF the dollar collapses, but WHEN.
are misled by the apparently healthy dollar rate, many still
accept these IOU’s, which nestle like green cancer cells in
all economies of the world. The result is ineluctable. All
infected banks, enterprises and economies will be dragged
along the day the demand for dollars sags and the
 Except oil
imports from Iraq between November 6th 2000 and
June 5th 2003, from Iran since spring 2003 and
from Russia since June 8, 2006
dollars” is a way of speaking. Most dollars only exist as
numbers on bank accounts.
balances 1960- 2002:
NOTE: huge differences between US' and Chinese data
for US' imports!
 Epoch Times:
 Int. Herald
 Iraqi oil in
 IMF warning
over dollar collapse:
 How can the
dollar collapse in Iran?
 Pipelines to
 How can the
dollar collapse in Iran?
 RTS speeding
 RTS opening: http://en.rian.ru/russia/20060522/48434383.html
Israelische aanval op Iraanse kerncentrale in 1981:
 Raid on
Nuclear Fuel Market:
 Financial Times, 5 June 2003
The author may be contacted at: rudoderuijter AT wanadoo.nl
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