Libya’s Move to the Gold Standard led to Civil War
A few years ago the Libyan general Muammar Gadhafi was forcefully removed from power. It was a tough time from for that North African nation, considering the casualties from the invasion that took place at the time. There was a general insurrection that took place and people were generally divided into two: those who were on the side of their leader and those that weren’t. Many lives were lost and there was a lot of speculation that occasioned such an incident that took place in a country that had never had a history of war.
Libya’s Central Bank and the Gold Standard
Part of the reason why Libya was attacked is because they had their own central banking system. What this means is that they used to control their own currency, were planning a move to a gold standard and it didn’t help that they were the largest oil economy in Africa ahead of Nigeria and Algeria. There was no way for the powers to be in the world to get a foothold in the oil money which they have no control over, and so what better way than to find a good reason to get into that country and get that control that is so crucial to making the big economies bigger.
Trading in the Libyan dinar and the Gold Standard
Colonel Muammar Gadhafi was an eccentric character, but he was by no means a fool. He had a made a declaration of how his country would stop dealing or rather trading with the currency of US dollars, and to commence their trade in the Libyan dinar. The Libyan dinar was to be a gold standard currency, and it was gaining popularity in the country and in the African continent at large. It was an ambitious plan that would ideally drive the dollar out of business. The fact that oil would be traded in the gold standard dinars would easily have made Libya a powerful player in the world economy in no time, and that didn’t please very many people as you would imagine.
Gadhafi intended that the oil producing nations in the Middle East should come together and do business in a nationalistic sense, which implies that they would be directly involved in setting prices. He was clearly disturbed that the oil producing countries weren’t making as much money as they potentially could if only they had the right strategies for the same thing. That stance didn’t go down very well with the world powers once again, and that potentially played a crucial role in the invasion of that country. It was a hard time, and no one ever wishes that to happen that to his or her country, but it did happen.
There is more to this Libyan invasion and the gold standard than meets the eye.