Will Grigg's Liberty Minute

October 12, 2007

In 1974, Secretary of State Henry Kissinger worked out an arrangement in which Saudi Arabia, the largest oil producer in the OPEC cartel, would agree to sell its oil exclusively for dollars and purchase US Treasury bonds as a way of propping up the greenback. In exchange, the Saudis would receive military assistance from Washington.

The dollar ? a fiat currency not backed by precious metals ? has remained the world's reserve currency in large measure because of this arrangement. In effect, the dollar has been backed by OPEC oil.

This arrangement may soon unravel. The Saudi Arabian central bank has indicated that it is losing confidence in the dollar. Other energy-rich Gulf states ? such as Kuwait and Qatar ? have quietly started to abandon the dollar as well. Iran, the fourth-largest oil producer, no longer accepts payment in dollars.
Washington has placed our nation's economic future in the hands of foreign powers that do not wish us well.

Let us take back the liberty wherewith Christ has made us free.