Petrodollar
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A petrodollar is a U.S. dollar earned by a country through the sale of petroleum. The term was coined by Ibrahim Oweiss, a professor of economics at Georgetown University, in 1973. Oweiss felt there was a need for a word to describe a situation then occurring in OPEC countries in which an imbalance of trade largely utilizing a single currency was largely offset by that currency's role as a reserve currency. Given the general tendency for crude oil prices to rise and become more volatile in recent years, it may even be argued that crude oil trading may, in the long term, be a significant liability for the stability of the currency in which the trade is conducted.
Petrodollars refers to the money that Middle Eastern countries and members of OPEC receive as revenue from Western nations and then put back into those same nations' banks. For example if Libya were to receive money from the U.S. for oil and then put the money into a U.S. bank, that deposited money is referred to as petrodollars. [1]
[edit] Further reading
The hidden hand of American hegemony : petrodollar recycling and international markets / David E. Spiro. Ithaca, NY : Cornell University Press, 1999. xiv, 177 p. ; 25 cm. LOC call # HG3883.A67 S64 1999 Footnotes:
[1] Ron Suskind, The Price of Loyalty: George W. Bush, the White House, and the Education of Paul O’ Neill, Simon & Schuster publishers (2004)
[2] Richard A. Clarke, Against All Enemies: Inside America’s War on Terror, Free Press (2004)
[3] William Clark, “Revisited - The Real Reasons for the Upcoming War with Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken Truth,” January 2003 (updated January 2004) www.ratical.org/ratville/CAH/RRiraqWar.html
[4] Peter Philips, Censored 2004, The Top 25 Censored News Stories, Seven Stories Press, (2003) General website for Project Censored: www.projectcensored.org/ Story #19: U.S. Dollar vs. the Euro: Another Reason for the Invasion of Iraq www.projectcensored.org/publications/2004/19.html
[5] Carol Hoyos and Kevin Morrison, "Iraq returns to the international oil market," Financial Times, June 5, 2003
[6] Faisal Islam, “Iraq nets handsome profit by dumping dollar for euro,” [UK] Guardian, February 16, 2003 observer.guardian.co.uk/iraq/story/0,12239,896344,00.html
[7] “Oil bourse closer to reality,” IranMania.com, December 28, 2004. Also see: “Iran oil bourse wins authorization,” Tehran Times, July 26, 2005
[8] “War-Gaming the Mullahs: The U.S. weighs the price of a pre-emptive strike,” Newsweek, September 27 issue, 2004. Online: www.msnbc.msn.com/id/6039135/site/newsweek/
[9] James Fallows, “Will Iran be Next?,” Atlantic Monthly, December 2004, pgs. 97 – 110
[10] Seymour Hersh, “The Coming Wars,” The New Yorker, January 24th – 31st issue, 2005, pgs. 40-47 Posted online January 17, 2005. Online: www.newyorker.com/fact/content/?050124fa_fact
[11] Philip Giraldi, “In Case of Emergency, Nuke Iran,” American Conservative, August 1, 2005
[12] Dafina Linzer, “Iran Is Judged 10 Years From Nuclear Bomb U.S. Intelligence Review Contrasts With Administration Statements,” Washington Post, August 2, 2005; Page A01
[13] C. Shivkumar, “Iran offers oil to Asian union on easier terms,” The Hindu Business Line (June 16, 2003). www.thehindubusinessline.com/bline/2003/06/17/stories/2003061702380500.htm
[14] Terry Macalister, “Iran takes on west's control of oil trading,” The [UK] Guardian, June 16, 2004 www.guardian.co.uk/business/story/0,3604,1239644,00.html
[15] “The Choice of Currency for the Denomination of the Oil Bill," Speech given by Javad Yarjani, Head of OPEC's Petroleum Market Analysis Dept, on The International Role of the Euro (Invited by the Spanish Minister of Economic Affairs during Spain's Presidency of the EU) (April 14, 2002, Oviedo, Spain) www.opec.org/NewsInfo/Speeches/sp2002/spAraqueSpainApr14.htm
[16] “Iran's oil bourse expects to start by early 2006,” Reuters, October 5, 2004 www.iranoilgas.com
[17] “Russia shifts to euro as foreign currency reserves soar,” AFP, June 9, 2003 www.cdi.org/russia/johnson/7214-3.cfm
[18] “China to diversify foreign exchange reserves,” China Business Weekly, May 8, 2004 www.chinadaily.com.cn/english/doc/2004-05/08/content_328744.htm
[19] Richard S. Appel, “The Repercussions from the Yuan’s Revaluation,” kitco.com, July 27, 2005 www.kitco.com/ind/appel/jul272005.html
[20] “China, Iran sign biggest oil & gas deal,” China Daily, October 31, 2004. Online: www.chinadaily.com.cn/english/doc/2004-10/31/content_387140.htm
[21] Analysis of Abu Musa Island, www.globalsecurity.org www.globalsecurity.org/wmd/world/iran/abu-musa.htm
[22] “Terror & regime change: Any US invasion of Iran will have terrible consequences,” News Insight: Public Affairs Magazine, June 11, 2004 www.indiareacts.com/archivedebates/nat2.asp?recno=908&ctg=World
[23] Sammy Salama and Karen Ruster, “A Preemptive Attack on Iran's Nuclear Facilities: Possible Consequences,” Monterry Institute of International Studies, August 12, 2004 (updated September 9, 2004) cns.miis.edu/pubs/week/040812.htm
[edit] See also
- Petrodollar recycling
- Petrodollar warfare
- Petrobourse
- Petroeuro
- Petroruble
- Monetary hegemony
- Petrocurrency
[edit] External links
- PetroTalk.com Portal for petro related Articles, Discussion, Links and more
- Washington Report
- Petrodollar or Petroeuro? A new source of global conflict, by Cóilín Nunan
- Petrodollar Theories of the War
- MP3 of interview with Carol Brightman author of "Total Insecurity: The Myth of American Omnipotence" in which Saddam Hussein's switch to the euro is discussed
- A Look At The World's Economy (December 2000) from CBS News
- Petrodollar Warfare Interview with William R. Clark with Jim Puplava of the Financial Sense Newshour
- Colin Nuan story with chart showing syncronisation of euro/dollar value and actions in Middle-East "Petrodollar or Petroeuro? A new source of global conflict"
- IMF warns trade gap could bring down dollar
- Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse
- History of Oil video done by Robert Newman A vaudeville type story which talks about petrodollar story in the context of the history of oil
- The beginning of the end for petrodollar by Bulent Gokay, 15 March, 2006.
- Cost, abuse and danger of the dollar by Rudo de Ruijter, Mathaba News, March 7, 2007.
