XV Skyrocketing National Debt and the End of the Petrodollar
When the United States invaded Iraq in 2003, the national debt was under $8 trillion. Today, the national debt is $40 trillion.
Well over half of this debt resulted from the cost of all of the endless wars the US has been in during the past 26 years.
However, the Iran War is going to make paying off this debt almost impossible because one of the many financial casuallties of this war will be the US Petrodollar.
The Petrodollar was started 50 years ago whereby the US agreed to protect Saudi Arabia in return for them requiring that anyone buying oil must use US Dollars. On August 7, 2026, Iran announced tolls on all ships going through the Strait of Hormuz. They likely will require this toll to be paid in Chinese currency – which will lead to the Death of the US Petrodollar.
Since countries will no longer need US currency to buy Persian Gulf oil, over the next few years, they will trade their US dollars for Chinese dollars – which over time will severely devalue the US dollar – further depressing the US economy.
Also on August 7, 2026, Saudi Arabia and Turkey signed a new defense agreement with Pakistan. The Mecca Joint Defense Agreement states that an armed attack on any of the three nations will be treated as an attack on all of them.
Saudi Arabia therefore no longer needs or wants the US to defend them – something the US was not able to do anyway.
China and Russia have created a huge Trade Organization called BRICS. Original members include Brazil, Russia, India, China and South Africa. Additional members include Egypt, Ethiopia, Iran, the United Arab Emirates and Indonesia.
As the final nails in the Pertodollar coffin, China created a gold- backed payment system. China’s Central Bank started a global payment system which provides cross-border transactions in yuan. The China International Payment System (CIPS) intends to internationalize the yuan and challenge the US dollar's dominance.
“The establishment of CIPS is an important milestone in yuan internationalization, providing the infrastructure that will connect global yuan users through one single system,” Helen Wong, China chief executive at HSBC, was cited by the Financial Times. See also
https://www.rt.com/business/318103-china-payment-system-yuan/
CIPS will accept payments in cross-border trade, direct investments, financing and personal remittances. The first CIPS transaction was completed by Standard Chartered Bank for Sweden's IKEA. Nineteen banks have been authorized to use CIPS; eight of them are Chinese subsidiaries of foreign banks, including Citi, Deutsche Bank, HSBC and ANZ.