The dollar is a paper currency deriving its value from two real functional sets of value that it represents. One is the productivity of the USA and its workers; the second is all of the oil traded around the world. When Henry Kissinger and his buddies in the US oil industry saw how the need to import oil was affecting the US economy they worked out a system of monetizing oil with US dollars. That was a certain way to defend the dollar against the cost of oil and most of us in this country have benefited by lower fuel prices because of that paper exchange. It was also a trap that is now beginning to close on our nation.

Dollars have been the only currency accepted for oil in international trade since the 1960's. That is until the advent of the Euro which has been gathering strength in the last two years. Saddam Hussein's big mistake that led to his removal by US forces may have been when he decided to accept Euros in the place of dollars for oil exports. That was probably his only real weapon of mass destruction! He did that in the year two thousand and now he is in hiding somewhere in the Middle East. Those two events could be totally unconnected but it seems unlikely. The attack by Al Queda on the world trade center cost us a few tens of billions of dollars and nearly three thousand lives. That attack was awful by any measure but we survived it nearly intact as a nation. The attack by Saddam on the dollar could have cost us a lot more if it had been allowed to spread into other oil exporting nations. Why would that have been so disastrous? Because if the two and a half trillion dollars used exclusively in the international exchange of oil were suddenly repatriated our currency would become virtually worthless! Without the international oil trade standing behind our dollar it would look totally unsupported.

The meaning of a piece of green paper with our dead Presidents portrait on it to most of the people in the world is that it allows their nation to buy oil from the nations that have it. If the medium of exchange for oil became the Euro our dollar would swiftly become just another piece of paper. The two and a half trillion dollars now floating around the world would descend on us in this nation like a horde of locusts. That is how important the policy of oil being bought only with dollars is to our nation today.

Are there any sensible solutions to this problem? Yes but endless wars used to hold back the rising tide of sentiment against using the dollar exclusively to trade in oil internationally is not one of them. We have watched while our international corporations traded jobs in this nation for short-term profits from cheaper labor abroad. The policies that allowed this to happen have been supported by both political parties. The transfer of those jobs has created a net cash flow out of this nation equal to half a trillion dollars a year. We are increasingly buying our goods from other nations now; we no longer manufacture them here. Only the fact that the international oil trade has used dollars exclusively has kept the impact of that deficit spending manageable. We badly need creative leadership to extricate ourselves from this trap of our own devising. What we have today is a cadre of true believers in the oil industry as the savior of all mankind.

This problem will get even uglier than it is today unless we find our way out of this morass by seeking international cooperation on an unprecedented scale. In order to do that we need a President that recognizes the value of friendship with the nations that can destroy our financial house of cards. No one wins in the case of the destruction of the dollar. But if you make people angry and hopeless enough they don't care if they win, only if they can hurt you while losing. Ask the Israeli people how that feels, they can tell you in detail. God bless you all and keep you all safe in these dollar rich times.