Posted originally on May 17, 2025 by Martin Armstrong
QUESTION: Some claim that the entire strength of the dollar is oil, which backed it after the gold standard fell. I know you said that was a convenient theory, and some now claim Trump’s trip to Saudi Arabia is Petrodollar 2.0. You managed money for OPEC and were even in an OPEC meeting, so who better to address this issue than you? I was at your 1985 conference in Princeton, and there were all the Arab nations attending in their white robes, while the Hasidic Jews were attending from the NY garment industry in their black garb. That was an eye-opening conference. So my question is, does oil have any basis for supporting the dollar, or is this another conspiracy theory, like gold going up with inflation?
Yours truly
SM
BTW, Anyone who refuses to interview you is part of the Deep State propaganda.
REPLY: Sam, it’s good to hear from you. You bring up old memories. We have grown old together. If I recall, you were there with your father. I remember when he died. To start with, the percentage of world trade attributed to oil and petroleum products is approximately 8-10% based on the 2022 data. Merchandise Trade in 2022 globally totaled around $25 trillion (WTO data). Of that, crude oil and refined petroleum product exports worldwide were estimated to be between $2.2 and 2.5 trillion (depending on price fluctuations and trade volumes). This includes contributions from OPEC, which are only 40% of crude exports, and non-OPEC exporters like the U.S., Russia, and Canada.
Therefore, if we take the $2.5 trillion and filter out OPEC, this comes to $1 trillion. Now let’s look at just Saudi Arabia, with Nixon’s secret deal (memo) made in 1974 was a negotiation not to support the dollar, but to deal with the Oil Embargo of 1973. Saudi Arabia’s annual oil sales can be measured in both volume (barrels) and monetary value (revenue), which fluctuates based on production levels, OPEC+ agreements, and global oil prices. Even if we look at the numbers from 1974, OpPEC was only about 13% ($112 billion) of world merchandise trade ($846 billion). This significant share was a direct result of the 1973 oil crisis, during which OPEC member countries imposed an embargo and drastically increased oil prices, leading to a quadrupling of oil revenues.
Saudi Arabia typically exports 6.5–7.5 million barrels per day (bpd) of crude oil and petroleum products. In 2023, Saudi Arabia’s oil revenue was estimated at $211 billion (based on ~7 million bpd and ~$80/barrel). This means that Saudi Arabia’s total petro sales amount to .0084% of world trade. The Petrodollar 2,0 is sophistry and just another conspiracy theory. If they priced all the oil in yuan, it would not alter the world economy.
Given the number of emails pouring in on this subject and people claiming Trump’s trip is Petrodollar 2.0 or whatever, I will lay out the truth. This appears to come from the perpetual dollar bears who never look outside the United States and constantly forecast the demise of the dollar since the 1970s. Why anyone listens to them shows that the old saying fool me once, shame on you, fool me twice, shame on me! They have been wrong for more than 50 years. They never look at the facts and have ZERO understanding of international investment flows.
Yes, we were all dealing with OPEC money in Geneva during the Wild ’80s. That is where all the OPEC money was being managed. Even the Saudi oil minister had a house in Gstaad, Switzerland. That’s where I learned to ski, besides attending exciting parties. Yes, I even participated in OPEC meetings by phone. They would put me on the speaker box. So, I think I know more from the inside out rather than cooking up theories from the outside. This is all tied into this de-dollarization theory as well. I will try to put this together ASAP.
Posted originally on CTH on May 16, 2025 | Sundance
The Supreme Court attempted to split the baby between executive “national security” power and the dynamic use of the “Alien Enemies Act” today with a ruling that temporarily blocks the Trump administration from deporting criminal alien gang members under the UEA until the criminals are afforded some undefined amount of time to appeal their repatriation status. Essentially, this is a stall and punt routine. [READ RULING HERE]
From the Ruling, “To be clear, we decide today only that the detainees are entitled to more notice than was given on April 18, and we grant temporary injunctive relief to preserve our jurisdiction while the question of what notice is due is adjudicated. [See post, at 13 (ALITO, J., dissenting).] We did not on April 19 —and do not now— address the underlying merits of the parties’ claims regarding the legality of removals under the AEA. We recognize the significance of the Government’s national security interests as well as the necessity that such interests be pursued in a manner consistent with the Constitution. In light of the foregoing, lower courts should address AEA cases expeditiously.”
The 7-2 ruling was unsigned. Justices Alito and Thomas dissented. The main opinion issued by the court was labeled “per curiam” — a term meaning that it was issued by the court as a body, rather than any individual justice. However, Justice Brett Kavanaugh wrote a separate opinion concurring in the decision. But Kavanaugh wrote that he’d prefer to have the Supreme Court dig into the legality of Trump’s Alien Enemies Act invocation right away, without waiting for the issue to be hashed out by lower courts.
NEW YORK TIMES – The Trump administration will not be allowed to deport a group of Venezuelan detainees accused of being members of a violent gang under a rarely invoked wartime law while the matter is litigated in the courts, the Supreme Court said on Friday.
The justices sent the case back to a federal appeals court, directing it to examine claims by the migrants that they could not be legally deported under the Alien Enemies Act, the centuries-old wartime law invoked by the Trump administration. The justices said the appeals court should also examine what kind of notice the government be required to provide that would allow migrants the opportunity to challenge their deportations.
The court said its order would remain in place until the U.S. Court of Appeals for the Fifth Circuit ruled and the Supreme Court considered any appeal from that ruling. Justice Samuel A. Alito Jr. wrote a dissent. He was joined by Justice Clarence Thomas. (more)
The Alito dissent, which appears beginning on PAGE 11 of the pdf, is well worth reading. Within the dissent Alito documents the timeline of the case and outlines why the Supreme Court intervention is unwarranted. From the Alito opinion, Chief Justice John Roberts dragged the high court into the case without any reasonable justification for interceding.
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