No Military, No Stablecoin
It’s True.
Since the Saudis require USD payments (only) for their oil, all countries must always be buying ‘the USD Dip’ in order to get the USD that allows them to buy oil for their countries. Since every country is required to always ‘buy the USD dip’ this is what keeps the USD Stable. The Saudis then plow their USD oil profits into US Treasuries, in order to fund our military, which continues to enforce ‘USD-only’ purchases of oil across the Middle-East.
This is all a result of our 1974 deal with the Saudis, which required them (as the largest oil producers in the World) to:
1. Only take USD payments for their oil.
2. Plow those USD profits back into US Treasuries.
And in return we would:
1. Protect Saudi Arabia (militarily) from Israel and Iran.
2. Give Saudi Arabia the ability to buy the largest amounts of military equipment from us (the Saudis have been the largest purchaser of US Military equipment since 1974).
So, the reason why ‘No Military = No Stablecoin’ is two-fold:
1. If you have no military, you have no leverage in getting the Saudis to require payment for oil in your Stablecoin (Bc the US military has kept the House of Saud in power for the last 50 years- Saudi Arabia is happy with that arrangement!). Which, in turn, means that no country will have to be perpetually be buying your Stablecoin’s ‘dip’ in order to get oil for their country….which means, inevitably, whatever peg your Stablecoin has, will fail.
2. Second, if a Stablecoin starts to challenge the USD as THE payment method for oil, and that Stablecoin team has no military, they definitely will not be on Earth much longer. (Think: Saddam Hussein only accepting Euros for oil, 2003 & Qaddafi trying to get all of Africa to only accept Gold-Backed Pan-African Dinar for oil, 2011. BOTH had militaries, BOTH tried to challenge the USD as THE payment method for oil, BOTH not on Earth any longer.)
I believe the above will hold true as long as:
- Oil is the resource that powers the world (as in, it’s the resource that every country must buy).
- We maintain our 1974 deal with Saudi Arabia, keep the House of Saud in power, and maintain a large military footprint in the Middle East (funded by Saudi Arabia, China, and Japan buying massive holdings of US Treasuries)
- There is still more oil to be pumped out of the ground.
I see the above failing when:
Oil is not the resource that powers the world.
OR
The world runs out of oil.
__________________________________________________________________
If you enjoyed this Track, please “CLAP” 50x below, and then SHARE it with One Hundred THOUSAND People.
Witness All of my Genius in the WORLD’S FIRST Written Album:
The Official Guide to Stablecoins LP
__________________________________________________________________
