That's right, 35 years ago today the first "oil crisis" officially began. That's when OAPEC (the Organization of Arab Petroleum Exporting Countries) placed an embargo on oil as punishment for U.S. support for Israel in the Yom Kippur War. However, while the war was the proximate cause of the oil crisis, the underlying cause was of course that Republican rascal Nixon.
That's right, Nixon's decoupling of the US dollar from gold two years earlier had done a number on the finances of the oil producing countries. They were used to being paid in gold-backed dollars that ensured a direct correlation between the price they got per barrel of exported oil and the prices they paid for the western goods they imported (like cement, steel, medicine, and fine automobiles). The price they had to pay for imports started to go up, but without--what had previously been--an automatic increase in the value of their oil exports.
And so, once again, the West blamed the Arabs for getting angry at being screwed by the West, the Arabs muddied the waters by bringing Israel into the argument, and a crooked Republican president was right in the thick of it, and there you have the last 35 years.
[...] That’s right, 35 years ago today the first “oil crisis” officially began. That’s when OAPEC (the Organization of Arab Petroleum Exporting Countries) placed an embargo on oil as punishment for U.S. support for Israel in the Yom Kippur War. However, while the war was the proximate cause of the oil crisis, the underlying cause was of course that Republican rascal Nixon. That’s right, Nixon’s decoupling of the US dollar from gold two years earlier had done a number on the finances of the oil producing countries. They were used to being paid in gold-backed dollars that ensured a direct correlation between the price they got per barrel of exported oil and the prices they paid for the western goods they imported (like cement, steel, medicine, and fine automobiles). The price they had to pay for imports started to go up, but without–what had previously been–an automatic increase in the value of their oil exports. Read more on The Stephen Cobb Blog [...]
ReplyDelete