Tags: Syria | Russia | Iran | dollar

Syria, Russia and Iran: Killing the US Dollar

Wednesday, 25 Sep 2013 08:00 AM

By Ashish Advani

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President Obama is trying one more time to stay relevant in the global geopolitics around oil. And it looks like he will fail again!

Addressing the United Nations, Obama tried to once again make the case of holding Syria accountable for the chemical weapons attack. He has demanded that the United Nations hold Syria accountable in handing over its chemical weapons. Incredulously enough, Syrian President Bashar al-Assad almost denies the existence of such weapons, let alone own takes any responsibility of the dastardly attack on innocent civilians.

Going back to the checkmate that was presented to Obama by Russia when the United States was just about ready to invade Syria, one can only wonder why Russia pulled out a rabbit from its diplomatic hat by trying to broker a deal for Syria to give up its weapons when Syria does not even acknowledge having such an arsenal.

The roots of this conflict go much deeper. What many of us readers do not know is that Russia's largest naval base outside of the country is in Syria. This strategic deployment is vital to Russia. Next we note that while Syria does not have the necessary oil reserves that are usually the target of such conflicts, it is an easy gateway to or from a large component of the Middle East oil reserves.

Let us also go back to just over a year ago. On Sept. 6, 2012 (while the United States was enjoying the Democratic convention), we had what seemed then to be a catastrophic announcement. China announced that they were willing to sell oil in yuan. Now with China being such a large importer, why would it sell any oil? The lynchpin to this announcement was the agreement between Russia and China, where Russia agreed to supply China as much oil as it needs indefinitely, and that too in yuan, not U.S. dollars.

So we can trace the snookering of Obama on the world stage back to this agreement. With the connection between Russia and China and the Russian naval base in Syria, we had a nexus that was hard to challenge when it came to the support of Syria on the international stage.

No discussion can be complete on Syria and Russia without the mention of Iran. Iran as an economy has failed. But as a strategic ally to Syria and being closely tied to Russia for its own support for its nuclear program, Iran will always play ball with Russia and Syria. China basically allows the trifecta to blossom as it poses a real challenge to the United States, which is the ultimate target for China.

Once you build this bridge, it is only a matter of time before China flexes its muscle (yuan) and starts actively trading oil in yuan rather than the U.S. dollar. It was a long drawn dream of Iran to start an oil bourse that would trade oil in non-U.S. dollars. It did not have the economic clout to do so and due to its pariah status, was never taken seriously.

China, on the other hand, is a whole different story. Once Syria is secured (not invaded), it will become a gateway for China and Russia to influence oil in the region and with oil trading in yuan by then, it is only a matter of time before the mighty dollar tumbles.

Back on May 8, I announced the demise of the U.S. dollar as the reserve currency in 2013. Little did I know that Syria would be the leading edge of the sword that made another cut into the U.S. dollar?

While the world is overtaking us, we sit and fight each other about defunding Obamacare.

Who is protecting us from the world defunding the United States?

What will be the plight of the U.S. dollar when this all plays out in the next year if not sooner?

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