Are we looking at the dethroning of the dollar and establishment of a new international currency regime? Kevin Barrett explains U.S. trade sanctions are forcing countries to find end runs around the dollar, with help from the EU, and that by precipitating the collapse of Saudi Arabia, the Khashoggi affair could help ensure that the coming currency transition happens sooner rather than later.
By Dr. Kevin Barrett
The premeditated torture-murder of Washington Post journalist Jamal Khashoggi, and its pathetically inept coverup, has unfolded like a murder mystery . . . or rather, a suspense drama. What happened and who did it is not exactly a mystery. Turkish president Recep Tayyip Erdogan has played his cards perfectly, baiting the Saudis into proffering a ludicrous series of cover stories. As President Donald Trump aptly put it, this has got to be “the worst cover-up ever.”
Saudi Crown Prince Mohammed bin Salman stands exposed not just as a psychopathic killer but also as a pathological liar, a megalomaniacal narcissist, and a grossly incompetent fool. Those of us who have been paying attention already knew that. But bin Salman has been protected until now by the billions of dollars he can throw around on a whim. Like the proverbial naked emperor strutting around in his birthday suit, bin Salman (or his PR team) has managed to hoodwink much of the world into ignoring what should be plainly obvious to all: This guy has no business managing a desert camel-burger fast-food franchise, much less a modern nation.
Bin Salman’s reign has been blighted by a series of disastrous initiatives—“crazy ideas that just might work” but never do. In 2015 he attacked Yemen, assuring President Barack Obama that it would be over in less than two weeks. Since then, 130 Yemeni children have been dying each day as the Saudis bomb hospitals, refugee centers, school buses, power and water infrastructure, and other civilian targets without making any military headway.
In 2017 bin Salman blockaded Qatar and was about to invade when the Turks quickly dissuaded him by establishing an “instant military base” there. Bin Salman’s war on Qatar, like his war on Yemen, has achieved none of its objectives.
Also in 2017, bin Salman kidnapped Lebanese Prime Minister Saad Hariri and forced him to broadcast a statement announcing his resignation—which Hariri quickly rescinded after international pressure forced bin Salman to release his victim. The thousands of Saudi citizens bin Salman has arrested, and in many cases robbed and tortured, have not been so lucky.
Bin Salman’s extravagant nuttiness is exemplified by his plan to build a vast entertainment park called Neom on the Red Sea coast. Populated by female robots in bikinis, this “stately pleasure dome” sounds like a drug-fueled dream, lending credence to rumors that bin Salman is addicted to designer amphetamines.
So the Khashoggi affair has underlined the all-too-obvious: Bin Salman is driving Saudi Arabia into moral and fiscal bankruptcy. By undermining bin Salman’s leadership, Erdogan’s orchestrated unraveling of the Khashoggi coverup will transform the geopolitical realities of the Middle East just as the Saudi-based petrodollar global currency regime begins to unravel.
Since the early 1970s, Saudi Arabia has propped up the U.S. dollar as de facto global reserve currency, by recycling its oil money into dollars and insisting that oil sales happen only in greenbacks. That currency regime, engineered by Henry Kissinger as an alternative to the gold standard, is about to end. U.S. trade sanctions against Iran, Russia, China, Turkey, and other nations have forced those countries to find end runs around the dollar. Even the EU is creating a “special payments entity” to help non-U.S. companies trade with Iran. The cumulative effect of these and other nations’ attempts to devise new methods of trading outside of dollars—at a time of skyrocketing U.S. debt and shrinking U.S. share of global GDP—will lead to the dethroning of the dollar and establishment of a new international currency regime.
By precipitating the collapse of “Saudi” Arabia, the Khashoggi affair could help ensure that the coming currency transition happens sooner rather than later. Bin Salman’s wild and desperate acts have been driven by his knowledge that his nation is heading for bankruptcy, and that the days of the petrodollar and the “special relationship” with the U.S. are nearly over. Ironically, he is hastening the very disaster he fears.
Erdogan’s takedown of bin Salman via the Khashoggi scandal has just thrown a huge roadblock in the path of the Saudi-Israeli plan to trick the U.S. into attacking Iran. Trump should read the writing on the wall and take this opportunity to dump the Saudis and Israelis. He should announce that from now on, the U.S. will follow George Washington’s policy of neutrality, pursuing American interests without getting caught up in entangling alliances.
Kevin Barrett, Ph.D., is an Arabist-Islamologist scholar and one of America’s best-known critics of the War on Terror. From 1991 through 2006, Dr. Barrett taught at colleges and universities in San Francisco, Paris, and Wisconsin. In 2006, however, he was attacked by Republican state legislators who called for him to be fired from his job at the University of Wisconsin-Madison due to his political opinions.