Turning Hard Times Into Good Times

Alasdair Macleod, Quinton Hennigh and Michael Oliver return as guests this week. Few people understand that the dollar became the world’s currency because of an agreement between the Nixon Administration and Saudi Arabia not long after Nixon detached gold from the dollar and the international monetary system in 1971. The agreement was for Saudi Arabia and OPEC to demand payment for all international oil sales in U.S. dollars, thus ensuring a constant and growing demand for dollars. Soon thereafter not only oil, but virtually everything that sold internationally, was denominated in dollars. The U.S. Treasury and Federal Reserve were free to create endless amounts of dollars out of thin air that Americans could use for generations to buy the world’s goods. It enabled America to live beyond its means since 1971 to consume and finance the greatest military might the world had ever seen to bully its way into foreign lands. But with Russia now making a similar move by demanding that “unfriendly” countries pay for