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 you've likely heard about the petro dollar there's a lot of things changing right now that are incredibly relevant i don't think most people realize how much the petro dollar has enabled the lives that we're living our quality of life and this is all about to change and as it's changing it's going to have major major implications on you in fact of all the things i talk about this is one of the most significant one of the most significant economic tides that's happening right now across theyou've likely heard about the petro dollar there's a lot of things changing right now that are incredibly relevant i don't think most people realize how much the petro dollar has enabled the lives that we're living our quality of life and this is all about to change and as it's changing it's going to have major major implications on you in fact of all the things i talk about this is one of the most significant one of the most significant economic tides that's happening right now across the

whole world so please give me a few minutes to tell you what the petro dollar is where it comes from how it affects you and most specifically the things that you can do so that you land on your feet on the other side of this transition for many of you this is your first time here my name is peter leeds i'm the small stock specialist and you ask yourself why small stocks because they produce the greatest returns and understand that nothing we say in this video at any point is intended as personalized trading advice for you

you might remember a video i made for you guys about the approaching global oil wars and some of these are starting to play out in front of your very eyes most of it's always behind the scenes but there's a lot going on right now and i always told you in that video that it's not that they wait till the world runs out of oil before all the wars start they do it ahead of time as we're approaching or as we're seeing this resource diminishing so here's some stats in the world of meters to tell you

where we're at with all this stuff there's 1.65 trillion barrels of proven oil reserves in the world that's as of 2016 so six years ago and every year we go through another 35 million barrels of oil we just use it up so how long is it going to last us that means it's going to last us for about 47 years give or take and i know people drive electric cars but your neighbor driving a prius isn't going to save the environment i always tell you about the reserve life index in gold mining

companies or any kind of mining company you want to know how much resource they have left and so if it's less than 10 years then you want to treat that investment differently but what about when the entire world is running out of oil and will be absolutely bone dry within about a generation do you think that this is going to have any kind of implication on you do you think this is going to result in any kinds of wars or shifting economic alliances there's so much going on and the petro dollar means that you're buying and

selling oil in u.s dollars i'm going to tell you why that is and it all starts in 1944. it was in that year 1944 when they had the bretton woods conference from july 1st to july 22nd what else was happening in i understand we just had the great depression in the 30s and we went into world war ii and world war ii was still live and active germany had not been defeated yet japan had not been defeated yet so this is the environment we were in so 44 nations came together to decide how to rebuild a world that had been

absolutely decimated by so many negative events and one of the things they did was that they agreed and pay attention to that word agreed it was a decision it's not that there's a bunch of scientists deciding what is or economists deciding what's the best decision to make it was just an agreement a decision at a time that they had to make and they did a good job of making it because it helped stabilize the entire world economy so that it helped stabilize the world and helped avoid further wars helped fight poverty

so it was at this bretton woods conference that all the parties involved agreed that the united states american dollar would be the new global currency and it was also agreed upon and clarified that only america can print u.s dollars which is the way it should be and what else happened in the bretton woods conference in 1944 there's also the creation of the world bank which has about 187 countries involved with that right now and also the international monetary fund which has about 190 countries as signatories

on it and if you ever hear about special drawing rights or sdrs that's where they come from that's who creates them the international monetary fund and a lot of currencies pegged their currency to the united states dollar because it was backed by gold and the way you peg a currency is if you want to peg it to the us dollar the us dollar gets weaker you want to print more of your own currency to keep it in line with about an equal exchange rate and if the us dollar gets stronger you want to

pull some of your dollars out of the market or stop printing so aggressively and that helps you stay closer in line with the other currency that you pegged yourself to the reason you do that is that it keeps the stability of your currency if your currency you say is going to be pegged to the us dollar that means that people are going to be buying and selling things in your currency will know that it will probably be about the same equivalent in relation to the american dollar so 44 countries came

together to help decide how to rebuild the world after the world was completely destroyed so it wasn't a great time greatest generation of americans but it wasn't a great time for anyone anywhere in the world at that point so the bretton woods conference and the agreements there helped us get out of this bad place that we were in but then what happened i'll fast forward a few years to 1971. so 25 years later we were looking at a massive bout of very strong stag flation stagnant growth with inflation it was also the

year that nixon temporarily paid attention to that word he temporarily suspended the convertibility of the us dollar into gold in the past seven years there's been an average of one international monetary crisis every year i have directed secretary connelly to suspend temporarily the convertibility of the dollar into gold let me rate a later rest the bugaboo of what is called devaluation if you want to buy a foreign car or take a trip abroad market conditions may cause your dollar to buy slightly less

but if you are among the overwhelming majority of americans who buy american-made products in america your dollar will be worth just as much tomorrow as it is today as a temporary measure i am the day opposed imposing an additional tax of 10 on goods imported into the united states it's just like saying a war is going to be short they do that to get you to be on board with it or they say it's going to be a temporary thing you're less likely to fight against it that's how they get things past you and don't

forget coming up i'm going to tell you exactly what to do as the petrol dollar continues to lose status but fast forward another eight years this is when the united states and saudi arabia formed the joint commission on economic cooperation at that point besides a few other things such as military agreements united states and saudi arabia agreed to price oil sales in u.s dollars that was the start of the petro dollar and is often the case with a lot of these oil-rich nations they will follow

saudi arabia's lead and it was the beginning of what became opec and since everyone's buying and selling oil in u.s dollars it was being used more it became more liquid it became more powerful more valuable and so that was the first beginning of lifting it into the status of the world's reserve currency and reserve currency and petrodollar are different things but they're kind of like cousins they're sort of related but they're not the same thing but one kind of leans into the other and as the world's

reserve currency what does that mean for you that you might not have even realized you might just think that everything is so wealthy and wonderful in america but the reason that we're enjoying these persistent trade deficits and being able to get away with it is that all these other countries are needing u.s dollars they're willing to buy our debt if we can't pay for something we have a deficit in the budget we can either create more money but sometimes we'll take money in from

china take money from japan or take money from saudi arabia to help cover the costs of the deficit and america has a lot of debt but most of that debt is actually owed to americans that's why people don't understand how bad some of these defaults are going to be the default is more than some company going bankrupt the default means that you don't get your pension the point is the american dollar became their world reserve currency which basically allowed us to live beyond our means for all of

these years and this is starting to shift not the reserve currency status that'll be around for a while but the petrol dollar is already starting to deteriorate especially when we have countries that don't like our policies or they don't like who we are as a nation they're choosing to not use the petrodollar this has already begun it's active and live right now and i'll tell you which countries are doing what just coming up in a second but oil is the second most common liquid on the entire planet it is

also the most used commodity so pricing oil in us dollars by default makes the us dollar the most dominant currency in the world besides the strong economy that backs it up the strong military that backs it up by pricing oil and us dollars that adds so much power and use to the currency but reserve currency status is under a little bit of threat but it's not going to go away anytime soon the petrodollar is under a lot of threat active threat right now is starting to go away already it might not go away

completely but the more it diminishes if it drops a little bit that's a little bit weaker of your quality of life if it drops a lot that's going to be absolutely significant to you and as we've seen in current times right now sanctions put on russia banking systems in certain countries like venezuela or north korea it's making some of our foes a little bit nervous and they're purposely not using the petrol dollar china is trying to set up an alternative to the petrol dollar but not just our foes but our

friends as well i'm going to get into that too nations are moving away from the petrol dollar right now and they'll do that first and then the reserve currency comes under more threat as that process takes place all of this is combining to mean that there's less demand for american dollars in a lot of countries that have a lot of american dollars that they use to buy oil with they might not use dollars anymore so they don't need those dollars they release them into the wild some of those

dollars will eventually find their way back onto our shores and that's only going to stoke inflation even more than you've already seen already right now russia and china are trading oil not trading russia is selling oil to china and they're not doing that in u.s dollars china has been pushing pretty hard for the petrol yuan for a while now and they're starting to get some traction and what else are china and russia doing both they're both aggressively buying gold as well they both have major

holdings in american assets whether that's stocks or bonds treasuries a lot of the time there's petrol dollar recycling where america says saudi arabia sell us oil they go okay we give them american dollars we get their oil then they take those dollars and they buy american stocks they buy american debt they buy treasuries bonds they own a piece of america because of all the oil that we bought from them but most countries around the world because they're watching what's happening which

is clearly obviously happening right in front of everyone's eyes the american dollar is losing its purchasing power we're expecting more inflation and thus other countries are holding american bonds and debts and they're expecting those assets to diminish in value and you heard it was about bringing freedom to the iraqi people or weapons of mass destruction but saddam hussein started trying to price oil in euros instead of dollars and he was removed from power pretty quickly after that gaddafi same

thing he wanted to price oil in euros he was taken out of power pretty quickly after that point so now all this money going over to saudi arabia american dollars go to saudi arabia for oil from them besides giving them military assistance and weaponry they also got our dollars and this is from cnn in 2018. so four years ago saudi arabia owns 168.8 billion dollars in u.s treasuries and that's at least i added that at least because they even knew at that time that may not be the maximum that they

owned but keep that number in mind when i tell you this next part just call it 170 billion dollars or so just for ease of calculation so saudi arabia has a very low cost of production for oil they can keep their wells pumping out oil without losing money on it at a much lower oil price and when oil prices go up their profit margins balloon just like i tell you why i like the gold mining companies let me give you some made up ridiculous numbers just for ease of explanation pretend that the price of gold is ten

dollars per ounce and it costs a company nine dollars to dig it up and sell it so they make a dollar profit per ounce of gold what if the price of gold went from ten dollars to eleven dollars that's a small ten percent increase but the profit margin is now double hundred percent more because they're making two dollars per ounce so a small move in the price of gold absolutely balloons the profit margins the same thing applies for just about any commodity oil also so when oil prices are climbing the profit margins

of saudi arabia or any oil exporting country increases dramatically but during this time saudi arabia owns what was the number do you remember it let's say 170 billion dollars saudi arabia owned four years ago and when oil prices were high they would sell off some of those treasuries and some of those assets and when oil prices were low they did the same thing so either way regardless of oil price in the last four years they've been selling off american assets treasuries stocks and bonds and a

lot of these american assets that they may have acquired four years now how much do they own of american assets now it's down to 120 billion that means that they're getting rid of over 10 billion dollars a year in american assets regardless of oil prices other countries are doing this as well even china has been looking at doing this they're trying to diminish how much they own of american debt because they know that the american dollar is declining in value the assets are declining in value and the saudi crown

prince recently went to china there's a lot of diplomatic moves where they're trying to come closer saudi arabia is with china china's been pushing for oil now for a while china's been pushing for oil to be priced in renminbi the renminbi is actually the chinese currency the yuan is just the unit of that currency but u1 is a lot easier to say so that's what i'm gonna say that's what most people do i think so what are we looking at here this is a trade war and a currency war

all wrapped together one it's so much more significant even right now than people are recognizing which country is the greatest consumer of oil china which country is third india and the greatest producer of oil sending oil to both of those countries is saudi arabia right now china's trading oil in renminbi with angola russia venezuela if you back up a few years to 2019 at that point 88 of all transactions worldwide were done with u.s dollars for things like oil other commodities like gold

coffee so you're almost there i'm going to tell you what to do about all of this but so in 1944 44 countries came together and pegged their currency to the us dollar which was pegged to gold and when some country wants to transact in something in u.s dollars so they have to basically do us dollars because both parties know what they're getting in exchange so it's like an elbow the us dollar became like an elbow so if norway's trading with siberia they go through a u.s bank these american

correspondent banks were basically the elbow that everybody fed money into took money out of bounce through there so that almost all transactions in u.s dollars for a lot of commodities are actually going through american soil and this allowed us to impose financial sanctions on countries that didn't play by the rules as we see it and we could impose the laws this is a good thing that composed the laws of against money laundering and fraud and corruption a lot of this came into play after the 911 terrorist attacks where it

became very strict about how money is passing through different hands they can monitor transactions they can block transactions and it can be used as a weapon as we're seeing with russia right now but right now there's a ban on u.s dollar transactions and north korea venezuela iran and now russia and understand that there's a lot of european union nations which oppose the sanctions on iran the european union is developing a euro-backed system so they can trade with iran they need all

the oil they can get right now so our allies in europe are bypassing the sanctions and india already has a workaround so they can get oil from iran and bypass the sanctions as it stands right now 25 percent of all the oil coming out of saudi arabia is going straight to china and i'm going to read you this quote i got from energyandcapital.com from violations of religious freedom to unlawful airstrikes on yemeni civilians to providing funding for the terrorist attacks on u.s on 9 11 and the killing of

journalist jamal khashoggi in 2018. saudi arabia has literally gotten away with murder because of petrodollar dominance it's thought to be that important to the security and stability of the u.s economy the saudi arabians were also shocked by the precipitous withdrawal from afghanistan prince muhammad who u.s intelligence authorities say ordered mr khashoggi's killing refused to sit in on a call between president biden and the saudi ruler king salman last month saudi arabia gets a lot of weaponry from

america we also don't get in the way when they're bombing yemen but we've been trying to get off of reliance on foreign oil for a while and now america is one of the biggest oil producers in the world and if you go back a few years compared to the 1980s we're bringing in about 2 million barrels a day from saudi arabia that number has been chopped down to 25 percent of that we're bringing in less than 500 000 barrels of oil from saudi arabia per day and saudi arabia hasn't

missed a beat because china's bringing in about 1.76 million barrels a day from saudi arabia to china china's also getting about 1.6 million barrels a day from russia according to the data from the chinese general administration of customs here's a quote i pulled out the dynamics have dramatically changed the u.s relationship with the saudis has changed china is the world's biggest crude importer and they're offering many lucrative incentives to the kingdom said a saudi official familiar with the talks

one of the things that saudi arabia gets from america is advanced weaponry china is more than willing to provide that china china's more than willing to build out the infrastructure for a lot of these developing countries saudi arabia being one of them but the saudi arabian currency the real is pegged to the american dollar right now and i don't see that changing anytime soon and when it does there will be a lot of repercussions so they're going to be moving very slowly with anything like

that and saudi arabia has stated that they are still planning on doing most of their transactions in u.s dollars but the tides have started to turn there's now an alternative if you don't want to trade oil in u.s dollars there's the petrol you want there's other options and starting from everybody trading us dollars to now having an option to do otherwise countries are starting to trade oil in currencies other than the us dollar and that means there's less reliance or demand for u.s dollars and other

producers are seeing that they could buy or sell oil and yuan just as china is doing right now you're seeing that china's oil imports are coming from russia saudi arabia angola and iraq the oil market and by extension the entire global commodities market is the insurance policy of the status of the dollar as reserve currency said economist gal luft co-director of the washington based institute for the analysis of global security so whenever i've depressed you enough at that point in the video

i always try to tell you what to do about it you can land on your feet here here's what it means what you can do about it this is a massive transition like we've never seen before there was no petro dollar then we had the petrol dollar and we've known no different our entire lifetimes but in transition there's always opportunity there will be a downward pressure on your quality of life your standard of living for sure as the petrodollar loses status and i would suggest you keep that

in mind no matter how hard it is to think about it it's happening either way so you can either get through this okay or not your choice i would absolutely suggest you go to my two videos ago i did one on the recession what to do about the upcoming recession certain steps you can take strike lists of what to do all of those points i made in that video apply to this situation as well but think about it what does it mean when we could live beyond our means all this time and then that starts to

diminish it doesn't have to completely go away even if it starts to diminish every time it's like being squeezed you're being squeezed down a little bit more as the petrodollar loses its usage worldwide it also will engender inflation on our shores say we give a bunch of money to saudi arabia for oil they take that money they buy a bunch of american jets so that money goes back to america people who work building the jets get that salary and that's money in their paw that they can go and spend in the

economy which is just going to drive up inflation even more so what happens when we have to stop living so far beyond our means we don't have enough money from taxation to pay for things like federal employees like nurses soldiers teachers we don't have enough money to pay them they can either work for free or have to start having fiscal responsibility that's going to mean that they'll get paid less or maybe some people will be let go potentially there will be a downgrade of the us dollar as this all

plays out and true fiscal responsibility will result in delinquencies defaults bankruptcies all across the board more than you even expect even at this point the decline of the us dollar which you've been seeing for a really really long time now slowly it's melting like ice that decline will accelerate dramatically there's american dollars all over the world and then there's less of a demand to have those what happens one of the ways is that it's all going to come back home to our

shores over time slowly which will result in more inflation of course and whatever i talk about there's a lot of difficult things happening right now setting up in the economy that it's going to affect you the one thing that it always comes down to and you look at it either way it always comes down to gold gold is always one of the responses to defaults and delinquencies to the loss of the petrodollar to the upcoming recession to the way that the stock market is changing course we're having to go to

raising interest rates now as opposed to being completely accommodative and lowering interest rates everything's reversing now the curtain is being pulled back a lot of false profits are going to be exposed i'm looking forward to that as bad as it sounds so with the economic hard time we're gonna have less money for things like military government workers so what happens when we don't have as much money for military spending you have to spend less and therefore anything that you think

happens when you spend less on military one of the things i said in the recession preparation video was that the companies the businesses which help people and corporations save money will be in more demand than a lot of others and i always tell you that uncertainty is the worst thing for the stock market what does that mean when you know that there's so much uncertainty coming up that it's going to be massive and significant you know that this uncertainty is coming up you know that this uncertainty is going to roil the

stock markets but understand that a lot of this timeline is going to take a long long time especially losing the reserve currency status of the american dollar the petrodollar is happening now it's just a matter of how quickly it happens i always tell you that it doesn't matter the destination it matters how fast it gets there so if the velocity of money is falling fast that's really bad if it's falling slowly you might not even notice it but the good thing is that since the timeline for a lot of stuff

might be a bit longer it's not going to happen next quarter but it is happening it's time for you you have a moment here where you can get your fiscal house in order do this today do this now do whatever you can do now even if you just plan and think about it now's the time and i would suggest that you be cautious with a lot of the stocks that are out there and what you think is a good investment be incredibly demanding and be incredibly cautious if you think about it it's been 14 years since our last

recession so that means you've got 14 years of some people who have been investing for that long or less that are mistaking a bull market for brains that's why there's so many people telling you how to invest and what to do and how they know what's the best decision to make they'll be exposed soon and we're watching it right now before our very eyes the curtains being pulled back the tides are shifting away from 14 years of an upward market to all of a sudden reality everything that that means for you

everything you think is going to mean it's going to mean so position yourself that's what these videos are about that's why you should subscribe to these videos because i'm telling you in real time how things are playing out and what to expect and i'd say more than anything it's all about how you interpret the headlines you see on the media there's going to be so many scary headlines of all clients coming up it's going to spook a lot of people out it's going to

get a lot of weak hands out of their investments and i wouldn't say that you should worry about if the weekend is somebody holding a really highly speculative high multiple stock that's going to come down a lot if you have a good investment you want to keep it and hold on to it so it's a good investment a lot of what we talk about here on this channel a lot about getting positioned properly so that you weather this storm and a lot of the stocks that we're looking at for the peter leeds newsletter right now i'd

suggest to you that all the tools are in place you have everything you need the knowledge is at your fingertips the entire manifestation of all human knowledge is at your fingertips on the internet right now you have everything you need to be able to understand what to do how to land on your feet how to get through this in the best possible way when nobody else is going to be and just click over here this is the video we're talking about in this video about how to get ready for the upcoming

2022 recession and you can encourage my team and i to make more videos just like this so that you get access to them as we create them as you want them just by doing one click subscribe to the channel it's easy it'll help us out a lot