The American Empire, Part 1: How It Works

A three part series on the Petrodollar World Empire: How It Works, How it Collapses, What Comes After

The CIA has done some horrible and despicable things around the world over the past 75 years, and most of us are outraged when we learn of the lengths to which they will go--in our name.

But honestly, moral outrage aside, is what the CIA does simply necessary for us to maintain our way of life? Are we just childishly complaining because now we’re starting to see how the sausage is truly made, and we need to shut up and get over it because we benefit tremendously from it? Does the CIA do a dirty but essential task to enable our way of life?

Or are we right to be outraged, and that at some point, the CIA began pursuing its own agendas and interests and that at some point along the way, there was a major divergence between the interests of the CIA, and the interests of the American people?

Option 1: The CIA Is a “Necessary Evil” That Sustains the System

Argument: The U.S. is a global hegemon, and to maintain that status — economically, militarily, diplomatically — you need a ruthless intelligence apparatus. That means: Regime changes, Backing dictators, Covert sabotage, Psychological operations

The American lifestyle — cheap consumer goods, energy access, dollar dominance, military security — is built on a global architecture that the CIA helps maintain.

In this view, the CIA is like sewage treatment: disgusting, but necessary. This line of thinking leads to: “Don’t ask how the empire runs. Just enjoy the benefits while it lasts.” It’s not moral, but it is pragmatic. This is how many insiders justify it — realism over idealism.

Option 2: The CIA Went Rogue — Serving Itself, Not America

Argument: The CIA was created to serve national security, but it evolved into a power center of its own: Self-reinforcing budget and secrecy, Protecting global corporate interests (oil, finance, weapons), Backing cartels, warlords, or autocrats when convenient, Engaging in illegal domestic surveillance and disinfo ops.

It's no longer acting on behalf of Americans, but on behalf of its own institutional continuity and its network of aligned elites. In this view, the CIA isn’t protecting us — it’s controlling us while claiming to protect us.

Option 3: Both Are True

This is probably closest to reality. The CIA has done awful things, many of which are morally indefensible. But the global system we live in — our access to cheap tech, military reach, economic dominance — depends on some of those actions.

Over time, the CIA’s mission drifted from defense to influence, and now to permanent shadow management of both domestic and foreign narratives. It’s not just about spying anymore. It’s about managing the boundaries of thought, both here and abroad.

So, what do we do with this information?

• Option A: Shut up and get over it. “We benefit from it. We can’t afford morality. Welcome to empire.” This is cold. Realist. But it’s internally consistent.

• Option B: Know the truth — and demand change anyway. “If the system we depend on is corrupt, maybe we need a new one. Even if it costs us.” This is principled. And you can sleep at night. But it’s also possibly idiotic.

• Option C: “Expose and disrupt when possible — without being naïve.” “Don’t fall into utopianism, but don’t excuse atrocities either. Call it out when it truly matters.” This is the middle path — skeptical, informed, but still capable of moral judgment.

If we benefit from the machine, but hate how it operates, then we're responsible for deciding what to do with that knowledge. This isn’t just about the CIA — it’s a broader question about what kind of civilization we want to be.

Let’s think of it another way: What would happen to the average American's daily life if the CIA was abolished tomorrow? If the CIA disappeared overnight, would the average American even notice? Or would the whole damn machine seize up?

• Best-Case Scenario: The CIA is abolished → power is restructured → oversight is restored → foreign policy is reoriented toward peace and sovereignty.

  • Effects: No more secret coups or proxy wars, domestic surveillance scales back, government becomes more transparent, U.S. foreign credibility improves; Resources shift toward diplomacy, infrastructure, education.

  • Daily life impact for the average American? Not much, at first.

  • Long-term: possible economic tightening (if the dollar loses some global leverage), but less war fatigue, more focus on internal issues. But this assumes the intelligence vacuum doesn’t get filled by something worse or more chaotic.

• Worst-Case Scenario: CIA vanishes → power vacuum opens → hostile states, cartels, and domestic terror orgs rush in → America loses global intelligence capability and strategic influence.

  • Effects: U.S. gets blindsided by real threats (e.g. terror attacks, cyberwarfare, state sabotage), foreign allies lose faith, global power balance tilts toward China/Russia. Dollar weakens, supply chains get disrupted. Domestic unrest spikes due to disinformation wars and institutional breakdown

  • Daily life impact for the average American? Gas prices spike, Internet disruptions, Economic instability (stock market crash, inflation), Reduced global mobility (passport loses value, fewer secure embassies), Surge in domestic “false flag” paranoia. Basically, the “we didn’t know what we had ‘til it was gone” outcome.

• Most Likely Scenario (Hybrid): CIA is technically abolished → its core functions get absorbed by other agencies (DoD, NSA, DIA, FBI) → the “deep state” rebrands, not dies.

  • Effects: Public gets a symbolic “win” — but the machinery remains, black budget programs continue, just with new acronyms, foreign operations resume under JSOC or privatized intelligence firms, domestic psychological operations (narrative control) migrate to NGOs, think tanks, tech partnerships

  • Daily life impact for the average American? Basically nothing changes. You still go to work. Still buy groceries. Still scroll Instagram or TikTok — maybe even more so.

  • But the real power structure just gets deeper underground, harder to track, and more abstract.

• Bottom Line: If the CIA vanished tomorrow, the average American would not immediately feel the difference — because the agency’s effects are global, strategic, and indirect.

But over time, the consequences of losing centralized intelligence and narrative control could: Destabilize the U.S. economic and geopolitical position, cause internal divisions to intensify, force Americans to rethink what their country actually is — and what it stands for without a covert empire behind it.

Especially because it would be an asymmetric tradeoff: we give up the CIA, but other countries don’t give up their centralized foreign intelligence agencies, and they fill the vacuum, leaving us as the losers.

What really interests me here with this whole discussion, though? The economic impact of the CIA, which I think is very often overlooked. We think of the CIA as, best case, thwarting foreign terror attacks and keeping America safe from rogue states; and worst case, the manifestation of American power greed and ruthlessness abroad (i.e. overthrowing governments that cause problems for our regime).

In reality, though, there’s a rich history of CIA operations that were explicitly or implicitly about ensuring resource access, protecting U.S. corporate profits, or preserving the global system that props up the American standard of living. Let’s look at the dirtiest examples where Americans got to sip Coke, drive cheap cars, and buy rubber sneakers — while someone else burned.

1. Iran, 1953 – Operation Ajax

   1. What the CIA did: Overthrew democratically-elected Prime Minister Mohammad Mossadegh

   2. Why: He nationalized Iran’s oil industry — threatening British Petroleum and, by extension, U.S. oil access

   3. Aftermath: West installed the Shah — a brutal autocrat who ruled for 25 years with CIA support

   4. U.S. benefit: Protected Western oil flow; cheap energy to fuel postwar boom

   5. Long-term cost: Gave rise to Iranian anti-Americanism → 1979 Islamic Revolution → U.S. Embassy hostage crisis → decades of geopolitical chaos

2. Guatemala, 1954 – Operation PBSUCCESS

   1. What the CIA did: Overthrew President Jacobo Árbenz

   2. Why: He was redistributing land and challenging the United Fruit Company (now Chiquita), a massive U.S. agribusiness

   3. Aftermath: Replaced with a military dictatorship → civil war, genocide of Indigenous Mayans

   4. U.S. benefit: Preserved cheap access to bananas, coffee, and other ag exports — protected U.S. corporate dominance in Latin America

   5. Long-term cost: Massive human rights abuses and a broken Guatemala that remains destabilized to this day

3. Congo, 1960–1961 – Assassination of Patrice Lumumba

   1. What the CIA did: Supported Belgian efforts to assassinate Lumumba, Congo’s first democratically elected leader

   2. Why: He was seen as too independent and possibly leaning Soviet — and the Congo was rich in copper, uranium, cobalt, and rubber

   3. Aftermath: Lumumba killed → CIA-backed dictator Mobutu Sese Seko takes power

   4. U.S. benefit: Maintained access to strategic minerals (e.g., uranium used in the Hiroshima bomb came from Congo), ensured Western companies could extract resources

   5. Long-term cost: Decades of corruption, authoritarian rule, and horrific instability in Central Africa

4. Chile, 1973 – Coup Against Salvador Allende

   1. What the CIA did: Orchestrated a coup against Allende, a democratically elected Marxist

   2. Why: U.S. corporations feared nationalization of copper, telecommunications, banking

   3. Aftermath: Installed General Augusto Pinochet, whose regime tortured and disappeared thousands

   4. U.S. benefit: Protected U.S. mining and financial interests, supported by Wall Street and the Chicago Boys (neoliberal economists)

   5. Long-term cost: Thousands dead or exiled, and Chile became a testing ground for neoliberal shock therapy

5. Indonesia, 1965 – Massacre of the Left

   1. What the CIA did: Supplied intelligence to the Indonesian military to help exterminate the Communist Party (PKI)

   2. Why: Fear of Indonesia aligning with China/Soviet bloc, but also to protect U.S. investments in natural gas, rubber, tin, and oil

   3. Aftermath: 500,000 to 1 million killed in political purges

   4. U.S. benefit: Freeport-McMoRan, ExxonMobil, and other U.S. firms gained stable access to resources

   5. Long-term cost: One of the worst mass killings of the 20th century, still not acknowledged officially by the Indonesian government

6. Saudi Arabia and the Petrodollar System

   1. What the CIA supported: Propped up the Saudi monarchy and suppressed regional revolts

   2. Why: To ensure oil flowed in dollars, keeping the dollar as the world’s reserve currency

   3. U.S. benefit: Americans could buy gas cheap, borrow money globally, and import foreign goods for decades

   4. Means: Arms sales, covert support, intel-sharing, and tolerance for human rights abuses

   5. Long-term cost: Empowered extremist factions, funded Wahhabism, destabilized the Middle East. May or may not have directly led to 9-11.

All of this translates to daily American life: cheap fruit from Central America, cheap oil from the Middle East, cheap copper for electronics, cheap uranium to project military dominance. A dollar that retains value because other countries pay the geopolitical price to keep it strong.

Americans have benefitted — massively — from the covert violence used to secure resource extraction and regime alignment. We don’t see it, because we’re not meant to. That’s the point of the CIA.

But this is why those coups and assassinations happened — to make the American way of life artificially affordable, by forcing other countries to eat the cost.

It's really all about natural resources at the end of the day.

It may have been about the Cold War communism vs. capitalism ever so briefly, but really, it's all about natural resources.

But—this begs an important question: why can't we produce a lot of this stuff at home? Why do we have to rely on the Middle East for oil? We have tons of oil. Why are we importing even one single drop of oil?

Why do we even need to conduct ourselves this way abroad in the first place?

The US is #1 in global oil production (mainly thanks to shale/fracking). It has massive reserves of oil, gas, coal, and even rare earth minerals, and that’s to say nothing of the amount of food we produce. The US has been the world’s #1 oil producer since around 2018, thanks to the shale/fracking boom; the US exports millions of barrels per day. We import oil by choice, not by necessity. So the political slogan “we’re dependent on foreign oil” is outdated — or deliberately misleading.

We could be almost fully energy self-sufficient if we wanted to, at least for a while.

So why aren't we? A few key reasons:

• Preserve domestic reserves for later: Why burn your own oil now when you can burn someone else’s? This is often called strategic resource preservation. Importing oil today means keeping domestic reserves untapped for future geopolitical crises or peak scarcity.

• Refinery and infrastructure compatibility: Different oil grades (light, heavy, sweet, sour) require specific refineries. U.S. refineries, especially on the Gulf Coast, were built to process heavier foreign crude, not the ultra-light shale from North Dakota. So we export our light oil and import heavier oil to keep the refineries humming.

• (The second-biggest reason) Global control of supply chains: It’s not just about supply — it’s about controlling global access to oil. If the U.S. controls the Gulf, the Strait of Hormuz, or Venezuela, we don’t just secure oil — we gain leverage over China, Europe, Russia, etc. That control requires CIA-backed regimes, military bases in 80 countries, and naval dominance, not just domestic drilling.

• (The biggest reason) Dollar hegemony via the petrodollar: If the U.S. must buy oil from foreign producers, we can force those transactions to be done in USD. That supports global demand for dollars, keeps interest rates low, and props up the American economy. It’s not about the oil — it’s about the financial leverage tied to oil.

The Cold War narrative was real but overstated. Even back then, though, most covert ops were more about bananas, oil, tin, or copper than communism.

The U.S. absolutely could produce enough oil and other resources to sustain itself short-term — and often does.

But importing oil and controlling its global flow provides strategic leverage, financial dominance (via the dollar), long-term resource preservation, and a reason to stay embedded in every corner of the world. Because, who controls the resources controls the world.

So, we aren’t really "dependent on foreign oil," we just use that relationship as a way to maintain the petrodollar system and ensure high global demand for the dollar.

And now we have arrived at the true core of the American empire: the petrodollar.

The petrodollar system refers to the global arrangement, forged in the 1970s, where oil is priced and traded in U.S. dollars worldwide.

Countries need dollars to buy oil, so they must hold dollar reserves. That in turn means they invest in U.S. bonds, which means demand for dollars stays high.

This gives the U.S. unmatched economic power globally. It enables us to run massive deficits with little consequence. We can impose sanctions as a global weapon. We can export our inflation to other countries (at least technically. Those dollars do, in fact, flow back to the US and cause inflation, just not in the grocery store--they cause inflation in other places, with foreign investors plowing their dollars into real estate and the stock market. In other words, the inflation is taking place in real estate and the stock market.)

To keep the petrodollar regime alive, the U.S. buys oil from foreign producers (esp. the Middle East), provides security guarantees to those regimes (e.g. Saudi Arabia), supports those regimes (often brutally) to prevent them from pricing oil in other currencies (like yuan or euros), maintains global military dominance, especially naval control over oil shipping routes (like the Strait of Hormuz).

So when we “import oil,” we’re not doing it because we need to; we’re doing it because it sustains the geopolitical system that keeps the dollar king.

What happens if oil stops being sold in dollars, though? Bad things, at least for America: if global demand for USD drops, then foreign countries sell off U.S. debt, which causes U.S. interest rates to rise (because demand for bonds drives down bond yields). If the dollar weakens, then imports cost more, which means inflation spikes. American living standards take a major hit.

That’s why the U.S. has historically treated any threat to the petrodollar as a national security crisis — and why the CIA or DoD have historically responded to such threats with coups, invasions, or regime change (think Iraq, Libya, Iran).

Obviously, we all know the official WMDs story about Iraq, but what’s the real reason we invaded and toppled Saddam? Most would say “oil,” and that’s generally correct, but more specifically, it was because Saddam threatened the petrodollar system.

In 2000, Saddam announced Iraq would sell oil in euros, not dollars — via the U.N.’s Oil-for-Food program. He followed through. Iraq switched all oil sales from USD to EUR, and began demanding payment in euros. At the time, Iraq held the world’s second-largest proven oil reserves. If more oil-exporting nations followed suit, the global demand for U.S. dollars — the foundation of U.S. borrowing power and empire projection — could collapse.

The Iraq War, then, was simple: make an example out of Saddam. Iraq’s oil sales returned to the dollar. The euro oil experiment ended.

Similar situation with Muammar Gaddafi in Libya. We were told “Oh genocide genocide!”

The reality: In the late 2000s, Gaddafi was promoting a pan-African “gold dinar” — a currency backed by Libyan gold reserves, to be used for oil and resource trade. He wanted African and Arab nations to ditch the U.S. dollar and CFA franc (a colonial-era French currency still used in much of Africa). He was making progress — some nations were receptive.

Libya has the largest proven oil reserves in Africa. If Gaddafi’s plan succeeded, it would have broken both the petrodollar and French monetary control in Africa. Worse, it would have set a precedent — a commodity-backed, non-Western currency.

In 2011, a NATO-backed intervention led to Gaddafi’s overthrow and death. The country collapsed into chaos and has never recovered. The gold dinar project died with him. In the famous words of Hillary Clinton, then Secretary of State: “We came, we saw, he died! Hahahahah!” Today Libya is a failed state with slave markets and warring militia groups — but oil is still sold in dollars.

Okay, so this petrodollar system is all about enabling deficit spending, then? That’s what it’s all about at the end of the day? Yes.

The petrodollar system ultimately exists to enable perpetual deficit spending and money printing in the United States.

Think of it this way: oil is priced in U.S. dollars globally. Whether you’re Germany, India, Brazil, Israel — you need US dollars to buy oil. That means countries have to hold large reserves of dollars — even if they’re not trading directly with the US. Anyone who needs oil (which is to say, everybody) needs US dollars.

How do foreign countries get those dollars? They sell stuff to the U.S. (goods, services, commodities) in exchange for dollars. They then invest those dollars in U.S. Treasury bonds to hold those dollars securely, and make a little interest. This creates permanent global demand for U.S. debt.

The result is that the U.S. can run massive deficits, because foreign nations buy our debt to maintain their energy security. So long as oil is priced in dollars, there’s a never-ending demand for US debt. As a result, we can spend more than we tax, print money with fewer consequences, and run trillion-dollar deficits without collapsing our currency.

And what do we do with that money? Military dominance, domestic subsidies, welfare programs, “discretionary spending,” global interventionism (aka “world police”), bailouts for Wall Street, general empire maintenance (e.g. CIA and intelligence budget, soft power projection, etc.)

The entire modern American economy, and its political stability, rests on the ability to run deficits — and that ability is secured by petrodollar demand.

What if this system ended, though?

If countries stopped needing dollars to buy oil, they’d dump their dollar reserves. The U.S. Treasury would lose its foreign buyers, the Fed would have to buy even more debt, leading to inflation spikes. Interest rates would skyrocket in response, and the debt becomes unsustainable. U.S. standard of living drops dramatically. Dollar loses reserve status = game over for the “American Empire”

All the coups, all the CIA interventions, all the foreign wars, all the “fighting for freedom” and “preserving democracy” rhetoric — it’s not just about oil. It’s about protecting a global financial system that allows the U.S. to live beyond its means indefinitely.

That’s the unspoken truth behind: “National security,” “Freedom of navigation,” “Fighting terrorism,” “Stability in the Middle East.”

It's all about ensuring no one breaks the link between oil and dollars, because that link is the root of American financial supremacy. Ask Saddam and Gaddafi.

But this is not a system that is going to last. The petrodollar’s days are limited.

And if you haven’t connected the dots already: this is why Trump and Elon Musk are trying to massively slash government spending. They’re preparing America for the inevitable end of the petrodollar system.

Because it seems like, we're finding out, we don't actually need deficit spending. So much of that spending goes towards insane bullshit like transgenderism in Algeria or sheep herders in Pakistan, or whatever. A massive amount of federal spending is actually just patronage and mafia-like spoils to Democratic Party groups, because the Democratic Party is the world's largest mafia that exists solely to loot the US taxpayer for trillions upon trillions of dollars.

Trump is trying to reorient and "true up" the federal budget in preparation for the end of the petrodollar system, and the way to do that is to remove the gargantuan amount of waste and fraud from the system.

At least, that’s how I interpret this.

Say the federal government’s budget each year is $6 trillion, but tax revenues only account for $4.5 trillion, and we’re running a $1.5 trillion deficit. That’s fine, because of the petrodollar. We can just print more money and it’ll all be fine--because everyone else in the world needs oil, and to get oil you have to have US dollars. So there is no real limit to the amount of US dollars we can print, since global demand is insatiable.

But if that petrodollar system collapses, then suddenly, we can’t run that $1.5 trillion deficit and just print money to pay for it (because that’s how the Fed buys US debt—it prints money to pay for it, putting those dollars into circulation and expanding the supply of dollars globally). That money printing will cause massive inflation, because global demand for dollars has dried up.

In other words, we actually have to live within our means without the petrodollar. And by “live within our means,” I mean, “We can only afford a $4.5 trillion yearly federal budget instead of $6 trillion.” And that $1.5 trillion deficit is taken as = “our way of life that we can’t afford.” You pull $1.5 trillion out of the economy, it’s gonna hurt.

But here’s the real question: do we really need all of that $6 trillion to “maintain our way of life”? Are we really, truly living beyond our means entirely due to the petrodollar?

Personally, I don’t think so.

I think the US is afflicted by a gigantic financial and cultural parasite known as the Democratic Party.

In reality, we don't need deficit spending. We just need to stop allowing the Democratic Party mafia to steal trillions of dollars per year.

We actually can afford our way of life.

What we truly can’t afford, though, is the Democratic Party.

If waste, fraud and abuse were 95% slashed from the federal budget, and the Democratic Party was no longer able to run the biggest money laundering grift in history through the US government, I don’t think we’d need the petrodollar deficits.

I think America is big enough and rich enough on its own to support our way of life.

But that requires we get the federal budget under control, and it requires the gravy train stop for the Democratic Party and its stakeholders.

So that’s why you’re seeing them lash out so intensely right now, not only against the DOGE cuts, but also more generally in support of the global US empire. It’s why they give infinity billion dollars to Ukraine.

Because the empire = the petrodollar = wild deficit spending = Democrats and their stakeholders get rich = use that money to buy power and influence. They have a tremendous stake in the survival and wellbeing of the petrodollar. The Great Grift requires it.

Huge portions of the federal budget go toward: Ideological grant programs, foreign aid that serves no U.S. interest, NGO slush funds, academic and consulting grift, D.C.-based nonprofits and lobbying firms, bloated administrative state overhead, defense contracts with almost no oversight.

$10 million grants to study gender dynamics in rural Pakistan, State Department LGBT+ programs in countries where it actively destabilizes things; Money that filters back to Democrat-aligned institutions and activist groups.

The federal budget is not a reflection of national needs — it’s a patronage system with a flag on it. It’s a massive, massive grift.

Not all of it, of course, but that’s exactly my point: the portion of the federal budget that we genuinely need, we can afford it. It’s all the other bullshit that we can’t afford. Which is why the Democratic Party conflates the two, and why the Democratic-controlled federal bureaucracy fights so hard to maintain the petrodollar system—because that’s the only way their gravy train continues. It’s the only way they can continue looting the country: if deficits don’t matter and we can freely print money without consequence.

Trump and people like Musk see the writing on the wall: The dollar’s dominance won’t last forever. That’s why they’re urgently trying to clean up the US budget.

We’re heading into a multipolar, post-dollar global economy. The federal government will soon lose its ability to print-and-spend freely. So what’s the logical move?

Cut waste, shred bureaucratic bloat, weaken parasitic grift networks, and fix the federal budget. In short: make America solvent again — before the bill comes due.

We can afford our way of life.

We just can’t afford the Great Democratic Grift anymore.

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Now, this is a bit of an oversimplification, as the GOP is absolutely complicit.

The Republican Party, for most of the post-WWII era, has largely functioned as a controlled opposition — allowed to win only when their victories serve the same elite economic order that undergirds both parties.

But the Democratic Party is the real ruling party — the party of the state, of the permanent bureaucracy, of the cultural machine.

The Republican Party is tolerated by the elite as long as it doesn’t dismantle the bureaucracy, doesn’t challenge the regime, limits itself to tax cuts, military budgets, and performative whining.

When Democrats are in charge, they loot openly through federal programs, NGOs, universities, and woke grift networks.

When Republicans are in charge, they don’t reverse any of it — they just cut taxes and talk tough.

But the Democratic Grift is undeniably far larger. The Democratic Party has fused itself to the federal bureaucracy and the nonprofit-industrial complex: Teachers unions, Universities, Tech companies, Media outlets, Globalist NGOs, Identity-based organizations

This gives them control of the administrative state, access to billions in grants and slush funding, and a turnkey electoral machine that runs on taxpayer dollars.

And the cherry on top: you’re paying for it all! Also, they call you a threat to democracy, a Nazi, etc. when you complain.

The GOP’s role historically has been as a right-wing gatekeeper for the Empire. The GOP’s job was to channel middle-class rage into harmless issues like tax cuts, flag-waving, or Middle East wars. When people got too angry, the GOP acted as a release valve, promising change — but never challenging the permanent state. That’s why Bush-era Republicans grew the surveillance state, bailed out Wall Street, and lost every culture war fight.

The GOP didn’t fight the system. It protected it from the Right.

When Trump came in, he attacked the intelligence community, the media, the bureaucracy, and the GOP itself. He refused to play the “loyal loser” role. He brought in a right-populist base that didn’t just want tax cuts — they wanted to burn the thing down

That’s why the entire system — left, right, intelligence, military, Wall Street — turned on him. He upended the fake two-party charade that made oligarchy feel like democracy.

So where’s the GOP grift? There is GOP corruption — defense contracts, pharma lobbying, agriculture subsidies, etc. But, it’s more old-school, transactional grift—it’s just politicians being paid off by big business. It’s less embedded in cultural and bureaucratic machinery. It’s usually tied to big corporate money, not sprawling, ideological NGO networks.

In comparison, the Dem machine creates voters by funding their institutions, uses government-funded activism to reinforce its power, has symbiotic relationships with academia, media, HR departments, and international organizations. That’s why their grift feels (and is) more expansive, more ideological, and more dangerous to the core of the Republic.

Anyway, that’s my piece on the Uniparty scam. But now let’s get back to the petrodollar system and whether it really is essential to “our way of life.”

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The petrodollar system is not just about running federal deficits.

It’s also about trade deficits as well.

And so another vitally important question here as we evaluate just how badly we truly need the petrodollar system: Do we inherently need to run trade deficits, as we’re told, or is that just what’s best for Big Business and profit maximization? We can produce a heck of a lot more here in America can't we?

Do we need to run trade deficits? No. Not in any structural or economic sense. It’s a choice — one that benefits corporate profits and dollar hegemony, not the American worker.

A trade deficit means we import more than we export. The U.S. has run trade deficits since the late 1970s, now around $1 trillion per year.

We're sending dollars abroad to buy Chinese goods, Middle Eastern oil; foreign-made cars, electronics, pharmaceuticals.

The logic we're told: “Don’t worry — trade deficits are great. They mean we get cheap goods, and foreigners invest those dollars back into our financial markets.”

But that’s only half the story — the half that benefits multinational corporations, Wall Street, and the managerial elite.

Could the U.S. produce more at home? Definitely. Should it? Absolutely. Most normal people like you and I are actually begging for this.

America has a massive labor pool, industrial capacity (though not what it once was), (potential) energy independence, access to domestic capital, tons of raw materials, and is (for now) the world leader in technology.

We can manufacture more here — and we used to. From WWII through the early 1970s, the U.S. ran consistent trade surpluses. It was a manufacturing superpower and the world’s workshop.

What changed? Why do we choose trade deficits now?

Because It’s Good for Big Business™.

And when it’s a question of Big Business or the American middle class, Big Business typically always wins. Nobody lobbies for the middle class, sadly.

Offshoring production lowers labor costs, regulations, and environmental restrictions. Companies manufacture in China or Mexico, then import those goods cheaply, then sell at high markup in the U.S.

Profits rise, CEO bonuses soar, stock prices explode.

Additionally, trade deficits are good for the petrodollar system: When other countries hold dollars (because they’re selling us stuff), they recycle those dollars into U.S. assets (Treasury bonds, real estate, stocks).

And of course, we know the petrodollar system allows for deficit spending without consequences, low interest rates and continued Wall Street dominance. So because trade deficits support the petrodollar system, the elites love trade deficits.

Trade deficits also “help” in another way: Cheap imported goods help mask inflation. You get a $9 toaster from China instead of a $45 one made in Ohio. This keeps the public placated with cheap stuff, even as the middle class gets hollowed out. It’s how you “manage” the decimation of the middle class without a revolt.

The big losers from trade deficits (and this may shock you!): American workers (especially in manufacturing). Small towns and rust belt cities. Domestic producers who can’t compete with slave-wage labor overseas. Strategic and key industries (we now depend on China for critical stuff like antibiotics and rare earths).

So, no: trade deficits are not an economic necessity to “maintain our way of life.” It’s a choice made by elites — and the cost is borne by the American middle class.

When they say “our way of life,” what they really mean is, their way of life. Them personally.

Your way of life has likely already been annihilated by the elites’ precious trade deficits. NAFTA went into effect way back in 1993--it’s already long since taken its toll on the middle class and hollowed out the economy. The comfortably middle class single-earner household (i.e. the “Homer Simpson” ideal) no longer exists.

But good news: Jeff Bezos has enough money to tear down a historic bridge in the Netherlands so that his 417 foot superyacht can exit the shipbuilder’s yard. (Don’t worry--they ultimately didn’t let him dismantle the bridge.)

Per Chat GPT:

“To stop running trade deficits, you’d have to: Reshore production, Impose tariffs, Reindustrialize the heartland, Break up multinationals, Challenge China economically, Possibly sacrifice cheap goods and raise wages at home.

This would threaten corporate profit margins, global supply chains, and Wall Street’s model.

So the establishment treats it like heresy — but that doesn’t mean it’s wrong.”

Yeah, and-how.

I’m confident the vast majority of Americans would take that tradeoff in a heartbeat. Trump, by the way, is the only candidate in our lifetime who offers anything remotely close to that vision; that tradeoff.

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On the subject of trade deficits, one thing that has alway stuck with me over the years is that Milton Friedman’s axiom that exports always = imports. I've never quite understood this—or rather, I’ve never really felt comfortable with this.

I like a lot of what Milton Friedman had to say, but I have never understood or agreed with this statement. Because while it might be true in a balance sheet sense, the human cost of it is anything but equal, and in reality is one of the biggest drivers of inequality imaginable.

This is the hidden reality behind Milton Friedman’s “dismantling” of the case for tariffs: you get cheap TVs and a hollowed-out middle class, and in exchange, foreigners get to purchase high-end coastal real estate, and plow their dollars into the US stock market so billionaires’ portfolios soar ever-higher.

That’s what Milton Friedman is really saying when he smugly lectures you that “exports = imports, always and everywhere.”

A little bit on this. Friedman was referring to the basic accounting of international trade: for every import, you must also send something of value abroad — whether that's an export (physical goods/services), a financial asset (U.S. real estate, bonds, stocks), or a claim on future production (debt).

So in the big-picture math, if the U.S. imports $1 trillion more than it exports in goods and services, it must export $1 trillion in financial assets (e.g. selling off debt or equity to foreigners). Therefore, trade is “balanced” in accounting terms — because what you buy, you must pay for.

But here's the sleight of hand: Just because the numbers balance on a spreadsheet doesn’t mean the outcomes are equal, healthy, or sustainable.

What Friedman ignored, deliberately (he was not an idiot): not all exports are equal. Exporting steel or machinery builds national wealth and productive capacity. Exporting your farmland to Chinese buyers, apartment buildings, or stock market does not — it sells your country piece by piece. That’s not trade — that’s asset liquidation.

This is what I mean when I say the elite has been strip-mining the US economy for decades—selling off the parts to the highest bidder.

The “trade balance” masks real-world power transfer. When foreigners buy US stocks, land, or corporations, they gain permanent ownership of income streams, political influence, and control of America’s assets. The American worker doesn’t “get” this trade. He gets: Cheap TVs, lost jobs, wage stagnation, and foreign landlords.

Literally, America is trading sovereignty for short-term consumption.

Meanwhile, Wall Street and multinationals collect the profits and tell you: “Don’t worry, the balance sheet checks out. Trade deficits are great!”

It only really benefit elites, not workers. A trade deficit is not a neutral exchange.

Foreigners buy U.S. assets, meaning prices go up, meaning rich Americans get richer.

But the goods imported from China, Taiwan, India, Mexico, etc. displace American workers, meaning the working-class gets hollowed out.

Inequality is baked into Friedman’s model.

Friedman also assumed infinite global trust in the dollar. His model only works as long as the U.S. dollar is the global reserve — meaning, simply, we can print money to settle trade deficits.

The “balance” Friedman promised isn’t really balance. It’s offshoring prosperity, onshoring inequality, and selling off national wealth to foreign buyers under the banner of "free trade."

And here’s where it all ties together: if the petrodollar system cracks, or countries dump U.S. bonds, this system of perpetual trade deficits implodes overnight.

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I think you get the picture by this point. One last topic to cover though before we move on to Part II of this series: where did the petrodollar system come from?

Earlier I mentioned that it began in the 1970s. As many of you know, the US was on the gold standard until 1971. You probably also know that the US dollar now is not intrinsically backed by any precious metal; it’s “free-floating,” meaning its value is determined relatively—i.e. in the form of exchange rates with other global currencies.

But that’s not entirely accurate.

The US dollar may not be backed by gold, but it’s definitely backed by something that comes out of the ground. You can probably guess what that is by now.

For all intents and purposes, the US dollar is now backed by oil instead of gold.

Under the Bretton Woods system (1944–1971)—which was developed in New Hampshire towards the end of World War II by US and allied diplomats, officials, economists and leaders—foreign governments could exchange dollars for gold at a fixed rate ($35/oz). This kept the dollar tied to a scarce, finite commodity — which limited U.S. spending and money printing. The U.S. had to maintain enough gold reserves to justify the amount of dollars in circulation.

By the late 1960s, U.S. spending on Vietnam, welfare programs, and global operations far outpaced its gold reserves. Countries (especially France) started demanding gold for their dollars, and the U.S. couldn’t keep up.

In 1971, Nixon closed the gold window. No longer would the US dollar be exchangeable for gold bars. “We must protect the dollar from international speculators,” Nixon said.

On August 15, 1971, Nixon ended dollar convertibility to gold unilaterally, killing the Bretton Woods system. That decision effectively ended the gold standard, turned the dollar into a pure fiat currency, and gave the U.S. free rein to print money and run massive deficits.

This left a giant question: If the dollar wasn’t backed by gold anymore… what gave it value? That’s where the petrodollar system came in.

In 1974, President Nixon and Henry Kissinger struck a deal with Saudi Arabia, which was the birth of the petrodollar system. The Saudis would price and sell all oil in U.S. dollars. In return, the U.S. would provide military protection, guarantee regime survival, sell the Saudis weapons, and stabilize their kingdom geopolitically.

Why do you think we’ve always listed Iran as one of our biggest enemies? Because Iran is Saudi Arabia’s biggest enemy.

This 1974 deal later expanded to OPEC as a whole. From that point forward, every country in the world had to hold dollars to buy oil. Even Iran! Imagine that. That’s how powerful the system is.

After 1971, the U.S. dollar ceased being backed by gold and was effectively backed by oil demand, enforced by U.S. military power, CIA/intelligence omnipotence, and control over global financial systems. That’s the petrodollar system.

It preserved global dollar demand, even in a fiat system. It allowed U.S. deficit spending to explode with limited consequences. It also created enormous leverage over other countries (via SWIFT, sanctions, and bond markets), and tied U.S. foreign policy to the protection of oil flows, especially in the Middle East.

So yes — 1971 wasn’t just a monetary shift. It was a geopolitical revolution that let the U.S. replace physical gold with strategic violence and control over oil markets.

This is the world we’ve been living in for basically the past 50 years or so. In a broader sense, it’s really been since the end of World War II in 1945, but the petrodollar system began in the early 1970s.

And now, in 2025, it’s starting to crumble. The end is near.

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Part II of this series will cover what that means and what that petrodollar crack-up will look like. What will actually happen to us here in the US?

Part III of this series will cover what happens after the petrodollar—what will the post-petrodollar world order look like?

And don’t worry—I am not here to blackpill you. I actually think that in the long-run, all of this will end up being a good thing for America. At least it should be.