My previous blog post Venezuela Has Officially Stopped Accepting Dollars For Oil Payments has been a wake-up call to me.
When we use our money as an economic weapon to punish countries that don’t do what we want, there is a very serious delayed cost. When we impose sanctions on enough countries, they will eventually band together to free themselves from the power of our money.
One of the articles linked to in my previous post (Libya: another neocon war) identified Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran as our explicit targets. Add Venezuela, Russia, and China to the list. With this set of countries, there is enough economic power to start to put up some serious resistance to the place of the USA dollar as an international reserve currency.
Apparently we view the kind of threat posed to our dollar as significant.
Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar.
The initiative was viewed negatively by the US and the European Union, with French President Nicolas Sarkozy calling Libya a threat to the financial security of mankind;
If you remember, Gaddafi was assassinated at our behest. This kind of retribution only makes it more important for countries to rid themselves of our power over them.
As a nation that is sovereign in its own money and has debts denominated almost exclusively in our own money, the ability to buy whatever we want internationally with our money is a major keystone to our power. If we lose that, we will rapidly decline as the major power in the world.