The Geopolitics of a Reserve Currency

     My conclusion is that it makes no sense to cut one dollar from defense spending or to reduce our nuclear arsenal by one more warhead. In 1973, Nixon persuaded Saudi Arabia to exclusively accept dollars in payment for oil from any and all countries and to agree to buy US bonds with the money they received. In exchange they were to receive US military protection from any regional or global power.  By 1975, a year after the 6 month oil embargo ended, all members of OPEC agreed to do the same, effectively making the US dollar the world's reserve currency. I haven't calculated the numbers, but I wouldn't be surprised if the monetary benefit of being the world's reserve currency has been worth enough to pay for all US military spending since WWII. Whatever the figure is, it is monumental. And this privilege will only remain intact as long as the US possesses overwhelming world military superiority, including control of the seas ( as in "Britannia Rules the Waves").

    Wasn't it you who speculated that the US attacked Iraq in 2003 because Sadam Hussein threatened to stop accepting dollars in payment for oil? You will never see this discussed openly by any Western Government official because it is too explosive of an idea. It makes it clear that the US is a modern Roman Empire or a 19th Century British Empire. Nations never admit their real geopolitical/economic motives but always disguise their actions in lofty moral terms. But Realpolitick drives the world much more than the pursuit of idealism. Conversely, without economic and military power, it is impossible to pursue any altruistic policies and actions even if a nation does desire to do so.

     There is much anguish among various economists and writers that the USA's deficit spending will turn the dollar into a "banana republic" currency unwanted by other nations as a store of value and thus not of value to measure a unit of economic exchange. Of course that is a real danger if "money printing" is carried far enough. 
   But the allies and trading partners of the US know full well how expensive it is to maintain a top-flight military establishment, and they factor this in to their evaluations of our deficit spending. Just consider how empty France's posturing was during it's intervention in Libya. France has some excellent aircraft and military technology, but they couldn't even supply enough ordnance for their planes to last for more than a few bombing runs. The US had to supply them after about the first week or two. This analysis does not imply that I think the intervention in Libya was even a good idea. I believe it was ill-conceived right from the start for many reasons. However, that discussion deserves an article of it's own, which Stratfor.com has probably already written.
   I believe that Obama's desire to reduce our nuclear arsenal reveals a profound strategic incompetence (assuming he does not learn better).The amount of radioactive hazardous waste produced by the process of creating these warheads is a price this country will never be willing to pay again in the future if there appeared to be a necessity for building more warheads again. So the sensible thing is just to store the ones we have, not dismantle them. Even in the thoroughly unlikely eventuality that there is never again a serious threat to the Western world from a dangerous adversary, there are other hazards which may need to be countered by the use of nuclear warheads. The most obvious is the deflection of asteroids from paths that could lead to a collision with earth. In my thinking, this should be the next great priority for a NASA- Air Force project.