Transcript

The Sand Trap · I Believe

0:29
SPEAKER_02: You're gassing up at a flying jade just west of Rollins, Wyoming, and the wind is having its way with you.
0:34
SPEAKER_02: The gusts come off the high plains at 60 miles an hour, shoving your truck door open, ripping it from your hand.
0:41
SPEAKER_02: Down the interstate, you pass two semis on their sides, lying in the median like dead animals.
0:46
SPEAKER_02: Strange lattice fences line the highway.
0:49
SPEAKER_02: If you're not from here, you don't know there's snow fences.
0:51
SPEAKER_02: They're losing.
0:52
SPEAKER_02: Truckers and old wise ones call this stretch the Snow Chi Min Trail.
0:57
SPEAKER_02: They're not joking.
0:58
SPEAKER_02: You squeeze the pump handle and watch the numbers climb.
1:01
SPEAKER_02: You do the math without meaning to.
1:03
SPEAKER_02: You watch the bill tick higher, higher.
1:05
SPEAKER_02: A refinery sits less than two hours west of here in Sinclair.
1:09
SPEAKER_02: You can see the stacks from the highway.
1:11
SPEAKER_02: Wyoming pumps oil.
1:13
SPEAKER_02: Wyoming refines oil.
1:15
SPEAKER_02: And somehow the number on this pump is set by a war 7,000 miles away in a gulf that doesn't get cold like this.
1:22
SPEAKER_02: Why?
1:23
SPEAKER_02: The easy answer is oil.
1:25
SPEAKER_02: That's the answer they give you on television.
1:27
SPEAKER_02: But it's not the real answer.
1:29
SPEAKER_02: The real answer is older, stranger, and closer to your life than you've been told.
1:34
SPEAKER_02: It's a trap.
1:44
SPEAKER_02: I'm Joel Douglas, and I believe in America.
1:48
SPEAKER_02: Thanks for joining me.
1:54
SPEAKER_02: Act one, the architecture.
1:57
SPEAKER_02: Before we get to the gas pump, we need to go back.
2:00
SPEAKER_02: Five scenes.
2:01
SPEAKER_02: Each one has men in it making decisions, and those decisions still set the price on that pump in Rollins.
2:09
SPEAKER_01: Scene 1.
2:10
SPEAKER_01: Tehran, 1953.
2:13
SPEAKER_01: The smell of summer dust.
2:15
SPEAKER_01: Muhammad Mossadegh is Iran's constitutionally appointed prime minister.
2:20
SPEAKER_01: He has overwhelming democratic parliamentary support.
2:24
SPEAKER_01: An old man with a long face who sometimes wept in parliament and received foreign dignitaries in his pajamas from bed.
2:32
SPEAKER_01: The British thought he was mad.
2:34
SPEAKER_01: Crazy.
2:35
SPEAKER_01: He was not mad.
2:37
SPEAKER_01: He nationalized Iranian oil.
2:39
SPEAKER_01: The Anglo-Iranian oil company, which you know today as BP, had been pumping Iranian crude for decades and paying Iran pennies on the dollar for it.
2:49
SPEAKER_01: Mossada asked to audit the books.
2:51
SPEAKER_01: The British refused, so he kicked them out.
2:54
SPEAKER_01: They would not go quietly.
2:57
SPEAKER_01: British intelligence drew up a plan to remove Mossada.
3:00
SPEAKER_01: They called it Operation Boot.
3:03
SPEAKER_01: But Mossadik had expelled British diplomats and intelligence officers, along with the oilmen.
3:09
SPEAKER_01: The British spy agency MI6 had no one left in the country.
3:14
SPEAKER_01: They couldn't do it alone.
3:16
SPEAKER_01: So they went to Washington.
3:18
SPEAKER_01: The Truman administration said no.
3:21
SPEAKER_01: But in January 1953, Eisenhower took office and the British changed the sales pitch.
3:27
SPEAKER_01: They stopped talking about oil and started talking about communism.
3:32
SPEAKER_01: Iran was unstable.
3:34
SPEAKER_01: The Soviet Union was circling.
3:36
SPEAKER_01: It was a Cold War argument built for a Cold War president.
3:40
SPEAKER_01: Eisenhower approved the operation.
3:43
SPEAKER_01: Alan Dulles at CIA set the budget at a million dollars.
3:47
SPEAKER_01: And the man they chose to run it was Kermit Roosevelt.
3:51
SPEAKER_01: In July, Roosevelt crossed the Iranian border in the back seat of a car.
3:56
SPEAKER_01: He was the grandson of Teddy Roosevelt.
3:59
SPEAKER_01: A bureaucrat's face, black glasses, high forehead.
4:04
SPEAKER_01: A colleague once called him the last person you'd expect to be up to his neck in dirty tricks.
4:10
SPEAKER_01: That colleague was Kim Philby, the most famous double agent in British history.
4:15
SPEAKER_01: Roosevelt was a career spy and he had come to overthrow a government.
4:19
SPEAKER_01: He carried with him a million dollars in cash and a plan called Operation Ajax.
4:25
SPEAKER_01: He was later asked on camera whether the million dollars was real.
4:29
SPEAKER_01: Yes, he said, though he only spent a fraction of it.
4:33
SPEAKER_01: The plan was to buy crowds and make it look like the Iranian people wanted their prime minister gone.
4:39
SPEAKER_01: The first attempt failed.
4:41
SPEAKER_01: Mosadag's people arrested the Shah's messenger before he could deliver the decree.
4:46
SPEAKER_01: The Shah, who was supposed to be the face of the new order, panicked and flew to Rome.
4:51
SPEAKER_01: CIA headquarters cabled Roosevelt to stop.
4:54
SPEAKER_01: Come home, it's over.
4:57
SPEAKER_01: Roosevelt read the cable and said no, we're not done here.
5:01
SPEAKER_01: The next day paid crowds poured out of southern Tehran, shouting for the Shah.
5:06
SPEAKER_01: Soldiers joined them.
5:08
SPEAKER_01: By the end of the day the people had overrun Mosadag's house.
5:12
SPEAKER_01: He had fallen, and the path was open for the Shah's long authoritarian rule.
5:17
SPEAKER_01: A twenty six year dictatorship had begun.
5:21
SPEAKER_01: The Shah told Roosevelt, I owe my throne to God, my people, and to you.
5:27
SPEAKER_01: Some years later, Washington helped him build Savak, his secret police.
5:34
SPEAKER_01: CIA trained, American designed, and for a quarter century one of the most efficient instruments of surveillance and torture in the Middle East.
5:43
SPEAKER_01: The Shah kept the oil flowing west.
5:47
SPEAKER_01: Washington kept quiet.
5:49
SPEAKER_01: This arrangement held for 26 years.
5:52
SPEAKER_01: There was no congressional vote on any of it, no treaty, no debate.
5:57
SPEAKER_01: The coup was not about oil alone.
6:00
SPEAKER_01: But without oil, there is no coup story to tell.
6:05
SPEAKER_01: Remember this scene.
6:06
SPEAKER_01: We'll come back to it.
6:10
SPEAKER_00: Scene two.
6:11
SPEAKER_00: Camp David in the Maryland Woods, August 13th, 1971.
6:17
SPEAKER_00: A Friday.
6:19
SPEAKER_00: Richard Nixon has called his inner circle to the presidential retreat.
6:23
SPEAKER_00: They arrive quietly.
6:25
SPEAKER_00: No press.
6:27
SPEAKER_00: Some of the men in the room do not know why they've been summoned until they get there.
6:32
SPEAKER_00: The problem.
6:33
SPEAKER_00: After World War II, the victorious Allies built a monetary system called Breton Woods.
6:39
SPEAKER_00: It was elegant and it was fragile.
6:42
SPEAKER_00: They pegged the dollar to gold at$35 per ounce.
6:46
SPEAKER_00: Every other currency pegged to the dollar.
6:49
SPEAKER_00: Any foreign central bank could present dollars at the treasury window and receive gold in return.
6:56
SPEAKER_00: The system made the dollar the foundation of the world economy.
7:00
SPEAKER_00: It worked as long as America didn't print more dollars than it had gold to cover.
7:05
SPEAKER_00: And then America printed more dollars than it had gold to cover.
7:09
SPEAKER_00: Vietnam, the Great Society, the space race.
7:15
SPEAKER_00: By 1971, there were far more dollars in foreign hands than there was gold in the vault.
7:22
SPEAKER_00: The reserves had fallen to ten billion dollars against forty billion in foreign liabilities.
7:28
SPEAKER_00: Frenchman Charles de Gaulle saw it first, or at least said it loudest.
7:34
SPEAKER_00: He had long resented what France called America's exorbitant privilege, the power to print the world's money and spend it however it wished, while other nations held the paper.
7:46
SPEAKER_00: In 1965, France began converting dollar reserves into gold and pressing the United States where Breton Woods was weakest.
7:55
SPEAKER_00: Other countries followed.
7:57
SPEAKER_00: The gold was physically leaving.
8:00
SPEAKER_00: Inside Camp David that weekend, the arguments ran hot.
8:04
SPEAKER_00: Arthur Burns, the Federal Reserve Chairman, worried about America's word.
8:10
SPEAKER_00: The country had made a promise.
8:12
SPEAKER_00: You could exchange dollars for gold.
8:15
SPEAKER_00: Breaking that promise would shatter trust in the international system.
8:20
SPEAKER_00: John Connolly, the Treasury Secretary, did not much care about trust.
8:26
SPEAKER_00: He was a Texan.
8:27
SPEAKER_00: He wanted to close the window and use the crisis as a club to force other countries to revalue their currencies upward.
8:35
SPEAKER_00: Paul Volcker, undersecretary for monetary affairs, was somewhere between.
8:41
SPEAKER_00: He understood the necessity but feared the disorder.
8:44
SPEAKER_00: George Schultz, the budget director and a student of Milton Friedman, had the most radical view.
8:51
SPEAKER_00: Let it all float.
8:53
SPEAKER_00: No more fixed rates.
8:55
SPEAKER_00: Let the market decide what a dollar is worth.
8:58
SPEAKER_00: Nixon listened to all of them, but cared about one thing.
9:02
SPEAKER_00: How would it play with the American public on Monday morning?
9:06
SPEAKER_00: On Sunday evening, August 15th, the president went on national television.
9:12
SPEAKER_00: He announced that the United States would no longer honor the Bretton Woods commitment.
9:17
SPEAKER_00: The gold window was closed.
9:19
SPEAKER_00: Dollars could no longer be exchanged for gold.
9:22
SPEAKER_00: He did not ask Congress.
9:24
SPEAKER_00: He did not consult allies.
9:26
SPEAKER_00: He did not warn them.
9:28
SPEAKER_00: America's allies woke up Monday morning to a unilateral break in the post-war monetary order.
9:34
SPEAKER_00: The promise was broken.
9:36
SPEAKER_00: Every finance minister on Earth asked the same question.
9:40
SPEAKER_00: If the dollar wasn't worth gold, what was it worth?
9:44
SPEAKER_00: Temporary answers came fast, but none held.
9:47
SPEAKER_00: The dollar fell.
9:49
SPEAKER_00: Inflation climbed.
9:51
SPEAKER_00: The international monetary system drifted without an anchor.
9:55
SPEAKER_00: Then the answer arrived, not from a conference room, from a war.
10:02
SPEAKER_01: Scene three.
10:03
SPEAKER_01: An American gas station in October 1973.
10:07
SPEAKER_01: Egypt and Syria attacked Israel on Yom Kippur.
10:11
SPEAKER_01: The United States airlifted weapons to Israel.
10:15
SPEAKER_01: The Arab producers announced an oil embargo against the United States and its allies.
10:21
SPEAKER_01: America discovered a critical share of its energy depended on oil it did not control.
10:26
SPEAKER_01: The price of crude quadrupled.
10:29
SPEAKER_01: In America, the lines at gas stations stretched around blocks.
10:33
SPEAKER_01: Drivers waited for hours.
10:35
SPEAKER_01: Some of them fought.
10:37
SPEAKER_01: There was rationing.
10:38
SPEAKER_01: Politicians imposed speed limits to save fuel.
10:42
SPEAKER_01: Factories slowed, truckers stopped.
10:45
SPEAKER_01: The country that had built the interstate highway system and the suburb and the two car garage discovered in the space of weeks that all of it ran on something it did not control.
10:56
SPEAKER_01: Washington learned two things at once.
10:59
SPEAKER_01: Oil could be used as a weapon.
11:01
SPEAKER_01: And oil was the one commodity on earth that every nation needed every single day.
11:06
SPEAKER_01: A commodity the whole world needs every day is a powerful thing.
11:12
SPEAKER_01: If you are looking for something to anchor a currency that just lost its foundation, you could do worse.
11:34
SPEAKER_00: He is the newly appointed Treasury Secretary of the United States.
11:39
SPEAKER_00: Before Nixon tapped him, he ran the bond trading desk at Salomon Brothers.
11:44
SPEAKER_00: He is a chain smoker from New Jersey, who once compared himself to Genghis Khan.
11:50
SPEAKER_00: One week before boarding the classified flight to Jeddah, he called the Shah of Iran, at the time, America's most important ally in the Middle East, a nut, in public.
12:02
SPEAKER_00: His deputy, Jerry Parski, is with him.
12:06
SPEAKER_00: Their official schedule says they are on a diplomatic tour.
12:10
SPEAKER_00: They are not on a diplomatic tour.
12:12
SPEAKER_00: They have one job, save the dollar.
12:16
SPEAKER_00: The United States would buy Saudi oil and guarantee the kingdom's security.
12:21
SPEAKER_00: In return, the Saudis would put their oil money into American treasuries.
12:26
SPEAKER_00: The dollars go out.
12:27
SPEAKER_00: The dollars come back.
12:29
SPEAKER_00: A loop.
12:30
SPEAKER_00: King Faisul has a problem with this.
12:33
SPEAKER_00: It is ten months after the Yom Kippur War.
12:36
SPEAKER_00: The Arab world is enraged at America for arming Israel.
12:40
SPEAKER_00: If it becomes known that Saudi oil money is flowing into American government debt that funds the same government that arms Israel, the king is standing in quicksand.
12:51
SPEAKER_00: The treasury men solve it.
12:53
SPEAKER_00: They create a mechanism called an add-on.
12:56
SPEAKER_00: Saudi Arabia can buy treasuries outside the normal auction process.
13:02
SPEAKER_00: The purchases are excluded from official totals, no public record, no trace of Saudi money in the American bond market, one condition.
13:12
SPEAKER_00: Faisal demands that the purchases remain strictly secret.
13:16
SPEAKER_00: They stayed a secret for 42 years.
13:19
SPEAKER_00: In 2016, Bloomberg News files, a Freedom of Information Act request, and the Treasury Department discloses Saudi holdings for the first time.
13:33
SPEAKER_00: Analysts believe the real number is much higher.
13:36
SPEAKER_00: A former Treasury official says double or more.
13:40
SPEAKER_00: The Government Accountability Office had investigated back in 1979.
13:45
SPEAKER_00: They found no statistical or legal basis for the secrecy.
13:49
SPEAKER_00: They concluded the Treasury had made special commitments of confidentiality to Saudi Arabia.
13:55
SPEAKER_00: The Treasury refused to hand over the data.
14:08
SPEAKER_00: The phrase for what was happening became known as petrodollar recycling.
14:13
SPEAKER_00: Saudi financial cooperation and the broader oil trade helped reinforce the dollar's central place.
14:20
SPEAKER_00: OPEC nations priced their oil in dollars.
14:24
SPEAKER_00: Every country on earth that needed to buy oil now needed to hold dollars.
14:29
SPEAKER_00: Central banks from Berlin to Tokyo to Sao Paulo accumulated dollar reserves not out of love for America, but because their people needed to heat their homes and drive to work.
14:41
SPEAKER_00: The dollar did not become redeemable for oil the way it had once been redeemable for gold.
14:47
SPEAKER_00: No law said it must be so, no treaty.
14:50
SPEAKER_00: But the practical effect was close enough.
14:54
SPEAKER_00: Oil was priced in dollars.
14:56
SPEAKER_00: Oil revenue flowed back into dollar assets.
15:00
SPEAKER_00: The American military guaranteed the oil supply.
15:03
SPEAKER_00: And the world's need for oil guaranteed the world's need for dollars.
15:08
SPEAKER_00: The dollar had a new anchor, written in oil.
15:14
SPEAKER_01: Scene five.
15:16
SPEAKER_01: The Capital January twenty third, nineteen eighty.
15:20
SPEAKER_01: The Shah is gone.
15:22
SPEAKER_01: The twenty-six year project that began in the first room has ended the way such projects usually end.
15:28
SPEAKER_01: The Iranian Revolution swept him from the peacock throne, and the revolutionaries remember everything.
15:35
SPEAKER_01: They remember Mosadik, they remember Savak, they remember who built it and who paid for it.
15:41
SPEAKER_01: Students storm the American Embassy in Tehran.
15:45
SPEAKER_01: They take hostages, they take documents.
15:48
SPEAKER_01: What they find in the files confirms what they have long suspected about the building they stand in.
15:54
SPEAKER_01: Jimmy Carter stands before Congress and says the words Any attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.
16:13
SPEAKER_01: A vital interest, the kind you send America's sons and daughters to fight for.
16:19
SPEAKER_01: Every president after Carter keeps the promise, Reagan, Bush, Clinton, Bush, Obama, Trump.
16:26
SPEAKER_01: The American military defends the oil supply.
16:29
SPEAKER_01: The oil is sold in dollars.
16:31
SPEAKER_01: The oil money flows back into dollar assets, especially American debt.
16:37
SPEAKER_01: In short, the dollars went out to buy the oil.
16:40
SPEAKER_01: Then the oil money came back and bought the debt.
16:43
SPEAKER_01: It is a loop.
16:45
SPEAKER_01: It was built in five scenes by fewer men than could fill a high school classroom.
16:50
SPEAKER_01: No Congress ever voted on the architecture.
16:53
SPEAKER_01: No citizen asked.
16:54
SPEAKER_01: And nobody in Washington in either party wants to break it.
17:03
SPEAKER_02: Act two.
17:04
SPEAKER_02: Two parties, one machine.
17:07
SPEAKER_02: You might think this is a one-sided story.
17:10
SPEAKER_02: Oil, military, defense contracts, the language of strength and dominance.
17:14
SPEAKER_02: It sounds like one side of the aisle.
17:16
SPEAKER_02: It's not.
17:17
SPEAKER_02: The loop has two ends and both parties hold one.
17:20
SPEAKER_02: Hawks more often defend oil.
17:22
SPEAKER_02: Oil is power.
17:23
SPEAKER_02: Energy dominance.
17:25
SPEAKER_02: American crude.
17:26
SPEAKER_02: The military that defends the supply chain is the same military they want funded, expanded, forward deployed.
17:33
SPEAKER_02: The petrodollar buys aircraft carriers.
17:36
SPEAKER_02: It buys bases in the Gulf.
17:38
SPEAKER_02: It buys the ability to project force anywhere on Earth.
17:41
SPEAKER_02: Doves need the same loop and will never say so.
17:44
SPEAKER_02: The world needs dollars.
17:46
SPEAKER_02: So the world buys American debt.
17:48
SPEAKER_02: So America borrows cheap, and America spends.
17:52
SPEAKER_02: Just like Hawks, doves run deficits too.
17:55
SPEAKER_02: Medicare, Medicaid, student loans, the Affordable Care Act, the infrastructure bills, a large part of every national bill, including the social safety net, is financed by debt.
18:06
SPEAKER_02: And that debt is more affordable because the dollar is the reserve currency.
18:11
SPEAKER_02: And the dollar is the reserve currency, in part, because oil is priced in dollars.
18:16
SPEAKER_02: Hawks need the loop for the military.
18:19
SPEAKER_02: Doves need the loop for the safety net.
18:21
SPEAKER_02: Both need the deficit.
18:23
SPEAKER_02: The deficit needs cheap borrowing.
18:25
SPEAKER_02: Cheap borrowing needs reserve currency status.
18:28
SPEAKER_02: Both guns and butter ride on debt when Washington runs deficits.
18:32
SPEAKER_02: The parties argue in front of the cameras about gas prices and drilling permits and climate change and electric vehicles.
18:39
SPEAKER_02: It's all theater.
18:40
SPEAKER_02: Nothing stops the machine underneath.
18:43
SPEAKER_02: A grandmother in Rollins uses snap benefits to buy groceries.
18:47
SPEAKER_02: The price of the food in her cart is connected to the price of the diesel that trucked it there.
18:52
SPEAKER_02: The diesel is connected to the price of crude.
18:55
SPEAKER_02: The price of crude is connected to a handshake in Jeddah in 1974, and that handshake is connected to the reason her grandson is deployed to the Persian Gulf.
19:04
SPEAKER_02: She experiences all of these things separately.
19:07
SPEAKER_02: Gas is expensive, groceries are expensive.
19:10
SPEAKER_02: Her grandson is overseas.
19:12
SPEAKER_02: She votes for whichever party she thinks will fix whichever one she feels most.
19:17
SPEAKER_02: But they are not separate.
19:18
SPEAKER_02: They're all part of the same thing.
19:20
SPEAKER_02: We once pledged to each other our lives, our fortunes, and our sacred honor.
19:24
SPEAKER_02: Like it or not, we are still bound together by this oath.
19:28
SPEAKER_02: We argue about gas prices as if they are an energy problem.
19:32
SPEAKER_02: We argue about the deficit as if it is a spending problem.
19:36
SPEAKER_02: We argue about military deployments as if they are a security problem.
19:40
SPEAKER_02: We argue about food prices as if they are an inflation problem.
19:44
SPEAKER_02: They are all the same problem.
19:46
SPEAKER_02: And the reason nobody can solve any of them in isolation is that they are not isolated.
19:51
SPEAKER_02: They are links in a chain that runs from a gas pump in Rollins, Wyoming, to a handshake in a room in Jeddah, kept secret for forty two years.
20:01
SPEAKER_02: The problem is not oil.
20:03
SPEAKER_02: It is not the dollar.
20:05
SPEAKER_02: It is not the deficit, it is not the military.
20:08
SPEAKER_02: The problem is our focus.
20:10
SPEAKER_02: Six national goals union, justice, order, defense, general welfare, liberty.
20:16
SPEAKER_02: This is not to condemn my country, not to condemn either party.
20:20
SPEAKER_02: Those of us who served in the Middle East do not regret our decisions.
20:24
SPEAKER_02: We believe in America.
20:25
SPEAKER_02: When you pull the chain to close the trapdoor, the first thing you have to do is realize you're in it.
20:36
SPEAKER_01: Act three, Iran and the trapdoor?
20:40
SPEAKER_01: Let's go back to the first scene.
20:42
SPEAKER_01: Tehran, 1953.
20:45
SPEAKER_01: The United States helped overthrow a democracy to control oil, installed a dictator, trained his secret police.
20:53
SPEAKER_01: Twenty six years later, the Iranian people overthrew the dictator, and the revolutionaries remembered everything.
21:00
SPEAKER_01: They remembered Mosadik.
21:02
SPEAKER_01: They remembered Savak.
21:04
SPEAKER_01: They remembered America built it.
21:07
SPEAKER_01: They took the embassy and the hostages, and Jimmy Carter declared that control of the Persian Gulf was worth America sending her sons and daughters to die for.
21:17
SPEAKER_01: That was nineteen eighty.
21:19
SPEAKER_01: It is now twenty twenty six, and the United States is at war with Iran.
21:24
SPEAKER_01: And the war is shining a flashlight on cracks in the machine that no one could see in the dark.
21:31
SPEAKER_01: On february twenty eighth, twenty twenty six, the United States and Israel launched coordinated strikes, Operation Epic Fury.
21:40
SPEAKER_01: We targeted military facilities, nuclear sites, and leadership.
21:46
SPEAKER_01: We killed the Supreme Leader.
21:48
SPEAKER_01: Iran responded with missile and drone attacks on American bases across the Gulf and on Israeli cities.
21:55
SPEAKER_01: Saudi, Kuwaiti, Qatari, and Emirati energy infrastructure took hits.
22:00
SPEAKER_01: At one point, oil reached$118 a barrel.
22:04
SPEAKER_01: It had been sitting near 66.
22:07
SPEAKER_01: Then Iran closed the Strait of Hormuz.
22:10
SPEAKER_01: Within two weeks, at least 20 vessels had been struck.
22:14
SPEAKER_01: Tanker traffic dropped to dismal levels.
22:17
SPEAKER_01: Our Navy can't open it.
22:19
SPEAKER_01: Over 150 ships anchored outside the strait and waited.
22:24
SPEAKER_01: A fifth of the world's oil supply moves through that water on a normal day.
22:29
SPEAKER_01: Iran's conditions for reopening call for a new order.
22:32
SPEAKER_01: The cracks were there.
22:34
SPEAKER_01: Iran just showed the world where they are and how wide they've gotten.
22:38
SPEAKER_01: The strait would remain open to shipping except for vessels linked to Iran's enemies.
22:43
SPEAKER_01: Iran's new supreme leader vowed to maintain the blockade for as long as the war continued.
22:50
SPEAKER_01: Iran would determine who passes and who does not.
22:54
SPEAKER_01: Ships linked to countries attacking Iran would be turned back or targeted.
22:59
SPEAKER_01: They would allow passage to ships from countries Iran considers friendly, particularly China.
23:08
SPEAKER_00: And then the part that no war planner in Washington would consider.
23:12
SPEAKER_00: Iran didn't announce a formal policy that oil must be priced in Chinese UN, but they closed the strait to everyone except Chinese vessels and ships willing to deal on Iranian terms.
23:26
SPEAKER_00: Since the war began, at least 11 million barrels of Iranian crude have flowed through the strait to China.
23:33
SPEAKER_00: All of it headed east.
23:35
SPEAKER_00: China pays in Yuan.
23:37
SPEAKER_00: China's ships move freely.
23:40
SPEAKER_00: Chinese ships pass.
23:42
SPEAKER_00: Chinese Yuan buys the oil.
23:44
SPEAKER_00: The oil moves east.
23:46
SPEAKER_00: No dollars change hands.
23:49
SPEAKER_00: For 50 years, the world has needed dollars to buy oil.
23:53
SPEAKER_00: That need is the heartbeat of the machine.
23:56
SPEAKER_00: And now a country we are at war with is using the geography we went to war to defend to root oil around the dollar and demonstrating to every watching nation that it can be done.
24:07
SPEAKER_00: The hawks pulled the military link, defend American interests, project force, neutralize the threat.
24:15
SPEAKER_00: The chain was connected to a trapdoor that they didn't see.
24:19
SPEAKER_00: Oil prices spike.
24:21
SPEAKER_00: The grandmother in Rawlins feels it first.
24:24
SPEAKER_00: Groceries cost more.
24:26
SPEAKER_00: Diesel costs more.
24:28
SPEAKER_00: Snap benefits stretch thin.
24:31
SPEAKER_00: Today, the dollar is still the world's dominant reserve currency.
24:36
SPEAKER_00: Oil is still mostly priced in dollars.
24:39
SPEAKER_00: The structural advantages built over 50 years do not disappear in a month.
24:44
SPEAKER_00: The dollar is not dominant only because of oil.
24:48
SPEAKER_00: American debt markets are the deepest on earth.
24:51
SPEAKER_00: The legal system is transparent.
24:53
SPEAKER_00: There is no alternative that the world trusts as much.
24:57
SPEAKER_00: Oil is not the whole foundation.
24:59
SPEAKER_00: But oil is the link that connects the currency to the military, to the deficit, to the grocery store.
25:05
SPEAKER_00: It is the link that makes the chain a chain instead of a collection of separate problems.
25:11
SPEAKER_00: If oil begins to move outside the dollar, the world's need for dollars softens.
25:17
SPEAKER_00: If the world's need for dollars softens, the reserve currency privilege erodes.
25:22
SPEAKER_00: If the privilege erodes, borrowing gets expensive.
25:27
SPEAKER_00: Everything else follows.
25:29
SPEAKER_00: The war in Iran shone a light on the cracks.
25:32
SPEAKER_00: Someone in Washington pulled a chain without seeing what it was attached to.
25:45
SPEAKER_02: This war didn't break the machine.
25:47
SPEAKER_02: The machine was already breaking.
25:49
SPEAKER_02: China became the world's largest oil importer and built payment systems that don't need dollars.
25:59
SPEAKER_02: The fracture was there before the first strike landed.
26:02
SPEAKER_02: The war just showed everyone where the cracks are.
26:05
SPEAKER_02: Iranian crewed flowing east, Chinese tankers moving freely, UN settling the cargo, 150 ships sitting outside a closed strait while the world's most powerful Navy watched from the water.
26:17
SPEAKER_02: You can't make the world unsee that.
26:19
SPEAKER_02: Even if this war ends tomorrow, the demonstration has already happened.
26:23
SPEAKER_02: Every oil importing nation on Earth watched a parallel market operate in real time, outside the dollar, through the choke point the United States has spent fifty years and American lives defending.
26:34
SPEAKER_02: That picture doesn't go away.
26:36
SPEAKER_02: It goes into the planning of every finance ministry and every central bank on Earth.
26:41
SPEAKER_02: You're still standing at that pump in Rollins, the wind hasn't stopped, the numbers are still climbing.
26:46
SPEAKER_02: Now you know why.
26:48
SPEAKER_02: Not because of one war, not because of one president, not because of one party, because of a chain built over fifty years in rooms you were never told about, by men who never asked your permission, maintained by both parties because both parties need it, and now stressed to the point of cracking by a war fought to defend the machine.
27:08
SPEAKER_02: The next time someone asks for your vote, ask them one question.
27:12
SPEAKER_02: How does what you are proposing affect the whole chain?
27:15
SPEAKER_02: The dollar, the oil, the debt, the military, the grocery bill, the grandson.
27:20
SPEAKER_02: If they answer one link at a time, they either don't see the machine or they are hoping you don't.
27:25
SPEAKER_02: And when we ask ourselves whether this war is worth fighting, we should ask the same question.
27:30
SPEAKER_02: What happens to the trapdoor when we pull this link?
27:33
SPEAKER_02: We built our prosperity on a commodity we have to defend with American lives in places most Americans cannot find on a map.
27:40
SPEAKER_02: We never decided to do it.
27:42
SPEAKER_02: It happens slowly, one scene at a time.
27:44
SPEAKER_02: It's a sand trap.
27:46
SPEAKER_02: We've been in it for fifty years, and the only way out starts with seeing it.