You’ve heard me mention the idea that the internet is huge enough to include all sides of every argument. It is in that spirit that I present below the views that the new Iranian Oil Bourse will have no (or little) effect on the USD, will not incite the US to bomb Iran, and that alarm over this is even silly. There are more thoughtful comments posted here, and I suggest that you read them to further edify yourself on this upcoming event.
Even if the USD does not fall off a cliff, and continues instead its slow drift downward, many of the results will be the same, but at a slower pace. More time to get ready!
Tuesday, January 24, 2006
Saturday, January 21, 2006
Your Turn
What the future looks like.The global chess game continues, with Iran making two bold moves to counter the Bushboy's drum beat of "we're going to attack you because of your nuclear ambitions".
The Times, London
Saturday, January 21, 2006
http://www.timesonline.co.uk/article/0,,251-2003034,00.html
Iran is transferring its assets from European accounts to other foreign banks to try to pre-empt possible United Nations sanctions over its nuclear programme, a senior Iranian official said. The official confirmed comments from Ebrahim Sheibani, the governor of the Central Bank, which were carried on the Iranian ISNA student news agency, that Iran had started transferring funds. There were no details as to where the funds might be heading. Mr Sheibani said: "We transfer foreign reserves to wherever we see as expedient."
The Asharq al-Awsat Arabic daily said that the Supreme National Security Council had ordered that $8 billion (£4.5 billion), about a quarter of its overseas assets, be moved to Singapore, Shanghai, Malaysia, and Hong Kong. Iranian overseas holdings are thought to top $30 billion, of which $4.1 billion was in Britain at the end of September, according to Bank of England data.
Iran Calls for Oil Output Cut
By Gareth Smyth and Najmeh Bozorgmehr
Financial Times, London
Friday, January 20
http://news.ft.com/cms/s/a5f70e7e-89ac-11da-86d1-0000779e2340.html
Iran has called for a cut in global oil production while simultaneously preparing to shift its foreign assets out of Europe. The moves were widely interpreted as a signal that Iran is preparing for a long stand-off with the west and sees oil production as a counter weight to international economic pressure.
Tehran's call on Friday for the Organisation of the Petroleum Exporting Countries to reduce production by 1m barrels a day helped take prices up to a four-month high of more than $68 a barrel, even though Iran is the only Opec member to call for the cut and is unlikely to find much support for the measure at Opec's meeting in Vienna on January 31.
Some traders said Iran's comment was a sign that Tehran might be willing to use the threat of halting its substantial oil production as a political tool in its nuclear spat with the west. Iran is the fourth biggest oil exporter and main supplier to Japan, South Korea, France and Italy.
The media in Iran this week has highlighted the upward pressure on oil prices simply through talk of sanctions. Just hours earlier, Ebrahim Sheibani, the Central Bank governor, said Iran would transfer the foreign exchange reserves "wherever we consider expedient" and confirmed a shift from Europe had begun.
Analysts say Iran is fearful that its deteriorating relationship with Europe could lead to a seizure of assets. Mr Sheibani refused to give details or to say where Iran's funds were going, although several local news agencies reported the destination was southeast Asia. The Central Bank manages Iran's "windfall" oil revenue in the Oil Stabilisation Fund, which Mr Sheibani said would contain about $15bn (?12.4bn) by the end of March. Iran keeps an unknown amount of this in Europe.
According to the International Monetary Fund, Iran's foreign exchange reserves are $30.6bn in hard currency. Tehran has another $9bn in foreign assets (but not necessarily liquid) abroad, it says.
A court in Rome last month ordered Banca Nazionale del Lavoro to freeze an account held by the Iranian government, pending a lawsuit over the deaths of three Americans in the Israeli-occupied Palestinian territories. Iran has protested that its official accounts were protected by the Vienna Convention governing diplomatic relations. But families of US citizens killed in the bombing of its Beirut embassy in 1983 by Hizbollah, the Lebanese Shia militant group, plan to follow suit -- asking European courts to seize Iranian assets after a US ruling that Iran should pay $126m in damages.
39 days until the Iranian Oil Bourse is set to open. Will Iran be able to move its funds? Cut oil production for a little leverage? Stay tuned.
Wednesday, January 18, 2006
Letter From Iraqi Hell
Oh noooo! What can we expect when they come home? From the Insomnia Blog.
"One of the soldiers I know in Iraq recently posted something that concerns me. I don't want to reveal who they are, but I did want to share it, as it documents some of what soldiers sometimes have to deal with psychologically, and how isolated they can be with what they are going through. I hope they're going to be okay, both for the remainder of their tour of duty, and later, when they're back home again.
"One thing that I have realized is that in a lot of ways the military has drained me of what little confidence that I once had. You can only be told that you are wrong and useless for so long. You can only be threatened and punished for so long before you snap. I feel on edge and most days it takes everything I have not to snap at some point or another. On the one hand this is a really good thing because I have shown a remarkable amount of restraint here. Most of you that know me know my temper and my propensity to explode. I have not done that here. Now I have developed another “bad” habit which mom knows about, and that I don’t want to talk about. My worry is that the only reason that this has not happened is the trouble that I would get into if it happened. My worry is that when that is no longer in effect will I lose it worse because of everything that has been repressed for so long.
I am so angry inside. It is a black pit inside of me - an evil daemon inside of me that is chained but barely. Isza you know of what I speak, and mom you know it too - well imagine that only a thousand times worse, and imagine him armed, not yet fully capable of doing all things that it wants to. I have already done those things. And there is a part of me that enjoyed it, revels in it - it is more scary than you can imagine. Because I know what I am capable of. The guilt, the... I don’t even know how to express it. I don’t sleep and my nightmares are worse than ever.
It is strange. Mom says that there are all these people that want to congratulate me, to have a celebration when I get back. That want to interview me. Why? I am nothing special. I am nothing special. I did not go out every day and deal with things here, and almost every time I went out something bad happened. I have seen too much. I know what death smells like, what it looks like, what it is to be in abject terror because you are being shot at. That is nothing special, and I don’t know if it is something to be celebrated. I have seen things that I don’t ever want to remember.
I want to fall to darkness. There are so many times that I want to kill and kill and kill and never stop. I want to hear the dying screams, that sound that sticks in your soul, that you can hear in your sleep. . . I will stop… This should never be let out, not even here. I am filled with hatred.
It has no end…I am so fucked up."
"One of the soldiers I know in Iraq recently posted something that concerns me. I don't want to reveal who they are, but I did want to share it, as it documents some of what soldiers sometimes have to deal with psychologically, and how isolated they can be with what they are going through. I hope they're going to be okay, both for the remainder of their tour of duty, and later, when they're back home again.
"One thing that I have realized is that in a lot of ways the military has drained me of what little confidence that I once had. You can only be told that you are wrong and useless for so long. You can only be threatened and punished for so long before you snap. I feel on edge and most days it takes everything I have not to snap at some point or another. On the one hand this is a really good thing because I have shown a remarkable amount of restraint here. Most of you that know me know my temper and my propensity to explode. I have not done that here. Now I have developed another “bad” habit which mom knows about, and that I don’t want to talk about. My worry is that the only reason that this has not happened is the trouble that I would get into if it happened. My worry is that when that is no longer in effect will I lose it worse because of everything that has been repressed for so long.
I am so angry inside. It is a black pit inside of me - an evil daemon inside of me that is chained but barely. Isza you know of what I speak, and mom you know it too - well imagine that only a thousand times worse, and imagine him armed, not yet fully capable of doing all things that it wants to. I have already done those things. And there is a part of me that enjoyed it, revels in it - it is more scary than you can imagine. Because I know what I am capable of. The guilt, the... I don’t even know how to express it. I don’t sleep and my nightmares are worse than ever.
It is strange. Mom says that there are all these people that want to congratulate me, to have a celebration when I get back. That want to interview me. Why? I am nothing special. I am nothing special. I did not go out every day and deal with things here, and almost every time I went out something bad happened. I have seen too much. I know what death smells like, what it looks like, what it is to be in abject terror because you are being shot at. That is nothing special, and I don’t know if it is something to be celebrated. I have seen things that I don’t ever want to remember.
I want to fall to darkness. There are so many times that I want to kill and kill and kill and never stop. I want to hear the dying screams, that sound that sticks in your soul, that you can hear in your sleep. . . I will stop… This should never be let out, not even here. I am filled with hatred.
It has no end…I am so fucked up."
Interesting Point of View
Cick on the picture (from Google Earth) to reveal the name of the city at the top of the globe.
Tuesday, January 17, 2006
A Bourse of Course
Thanks to Anonymous for the link.
"The Iranian government has finally developed the ultimate “nuclear” weapon that can swiftly destroy the financial system underpinning the American Empire. That weapon is the Iranian Oil Bourse slated to open in March 2006. It will be based on a euro-oil-trading mechanism that naturally implies payment for oil in Euro. In economic terms, this represents a much greater threat to the hegemony of the dollar than Saddam’s, because it will allow anyone willing either to buy or to sell oil for Euro to transact on the exchange, thus circumventing the U.S. dollar altogether. If so, then it is likely that almost everyone will eagerly adopt this euro oil system."
Read entire article.
"The Iranian government has finally developed the ultimate “nuclear” weapon that can swiftly destroy the financial system underpinning the American Empire. That weapon is the Iranian Oil Bourse slated to open in March 2006. It will be based on a euro-oil-trading mechanism that naturally implies payment for oil in Euro. In economic terms, this represents a much greater threat to the hegemony of the dollar than Saddam’s, because it will allow anyone willing either to buy or to sell oil for Euro to transact on the exchange, thus circumventing the U.S. dollar altogether. If so, then it is likely that almost everyone will eagerly adopt this euro oil system."
Read entire article.
Sunday, January 15, 2006
Iran Scenario Unfolding Like a Bad Pop-up Book
I was planning on writing a recap of the current “US Bombs Iran in March Over Oil Bourse” story, but “telecidal tendencies” has already done a great job, which I reprint here.
Unfortunately, the next page in this book is $100 per barrel oil and $5.32 per gallon gasoline.
The Truth Behind The Iraq Invasion And A Possible US Conflict With Iran
It is now openly obvious why the US (and its 'coalition of the willing') invaded Iraq (without UN backing) in 2003 under the banner ‘Operation Iraqi Freedom’. It wasn't for the reasons the Bush administration maintained at the time (suspected WMD, a link between Saddam and Al Qaeda, etc. etc.) but to do with the petrodollar. Many people suspected that oil was the underlying reason but few were aware of the more important need to maintain the 'petrodollar recycling' system.
Petrodollar recycling was introduced by the US in the early 70's, when Middle Eastern countries were beginning to produce oil of their own under the OPEC group of nations. Previously, most of the worlds oil was supplied by the US and all trading in this market was carried out using US dollars. When OPEC came into competition with the US oil giants, the Americans struck a deal with their Middle Eastern counterparts in which they would supply Saudi Arabia, etc. with arms as long as OPEC traded their oil in dollars. This meant that if a country wanted oil, for example Japan, they had to sell to the US their home-produced products (Toyota cars for example) in order to raise the necessary dollars to buy their oil from an OPEC country. These dollars were then invested back into the US by, for example, Saudi Arabia and this left the US in a great position. As long as they could print enough dollars to meet demand they would continue to dominate the worlds oil markets and would (and did) make a fortune doing so. This is what ultimately has made the US into the worlds only superpower, with the ability to afford the necessary military might to match.
Thirty years later, at the turn of the millenium, this cosy arrangement came under threat. Saddam Hussein announced his intention to begin trading oil in the other world currency - Euros - and began doing so before the US invasion in 2003. This gave the US serious concerns. With a massive dept of trillions of dollars (made worse by the habit of the average US citizen to spend far more than they saved, using credit to do so) the US could not afford to stand by and watch the petrodollar recycling system be undermined. The risk to the country's status as sole superpower was massive and with the debt the prospect of US economic collapse was very much a reality.
When elected into office, George Bush had as priority #1 to sort out this petrodollar threat by gaining control of Iraq and in 2003 he invaded. One of the first post-war actions was to revert the country's oil trading currency back to the US dollar, even though this meant that approximately 13% of Iraqs trading value was instantly lost (because the Euro was worth more than the dollar at the time). The invasion was also to serve as an example to neighbouring oil producers not to go down the same 'petroeuro' route.
Unfortunately, Iran has plans to begin trading its oil in Euros and Saudi Arabia is giving serious consideration to the idea. Should this happen the US is likely to economically implode, with its massive military very quickly becoming an unaffordable asset. America would become little more than just another country and its global influence would be consigned to the history books, something that is regarded as unthinkable by the corporate elite.
So the US looks increasingly likely to carry out an attack on Iran, probably involving tactical 'battlefield' nuclear weapons (in an attempt to destroy underground installations there). It is not because the Iranians are close to producing their own nuclear arsenal (the Washington Post reported that the most recent National Intelligence Estimate (NIE) of Iran’s nuclear program revealed that, “Iran is about a decade away from manufacturing the key ingredient for a nuclear weapon, roughly doubling the previous estimate of five years.” (see source) but rather to keep the petrodollar on track.
Wargame simulations carried out by the US resulted in the following conclusion being reached by Sam Gardiner, the retired Air Force colonel who has run war games at the National War College for the past two decades: “After all this effort, I am left with two simple sentences for policymakers: You have no military solution for the issues of Iran. And you have to make diplomacy work.” The problem is, as was highlighted in the Iraq invasion and post-war years, that the neo-cons in the Bush administration are prone to acting illogically and against advice provided by people who know far better than themselves.
Internationally-respected reporter Seymour Hearsh wrote the following in The New Yorker one year ago:
"In my interviews [with former high-level intelligence officials], I was repeatedly told that the next strategic target was Iran. Everyone is saying, ‘You can’t be serious about targeting Iran. Look at Iraq,’ the former [CIA] intelligence official told me. But the [Bush administration officials] say, ‘We’ve got some lessons learned – not militarily, but how we did it politically. We’re not going to rely on agency pissants.’ No loose ends, and that’s why the C.I.A. is out of there."
However, a disturbing article by intelligence analyst Philip Giraldi who, in an article entitled “In Case of Emergency, Nuke Iran,”, said:
"The Pentagon, acting under instructions from Vice President Dick Cheney's office, has tasked the United States Strategic Command (STRATCOM) with drawing up a contingency plan to be employed in response to another 9/11-type terrorist attack on the United States. The plan includes a large-scale air assault on Iran employing both conventional and tactical nuclear weapons. Within Iran there are more than 450 major strategic targets, including numerous suspected nuclear-weapons-program development sites. Many of the targets are hardened or are deep underground and could not be taken out by conventional weapons, hence the nuclear option. As in the case of Iraq, the response is not conditional on Iran actually being involved in the act of terrorism directed against the United States. Several senior Air Force officers involved in the planning are reportedly appalled at the implications of what they are doing – that Iran is being set up for an unprovoked nuclear attack – but no one is prepared to damage his career by posing any objections.
Should the US decide to carry out such an attack on Iran, China would undoubtedly become involved, since its massive economic expansion is heavily reliant on oil from the region. With Iran planning on introducing its Euro-based trading system in March this year (coinciding with Israel accelerating its US-backed strike plan - see source) events are likely to come to a head very soon.
The US is leading us down a road to potential global conflict in order to protect its dominance in the world oil markets and is seemingly likely to bring about the pre-conditions to justify an attack regardless of the consequences. Hopefully there will be no 'coalition of the willing' giving Bush and Cheney some kind of international credibility and this may help to deter them from following their plans through, but we're surely in for a bumpy year, one in which the spectre of the US administration and its shadowy backers showing its true colours is quite horrifying.
Unfortunately, the next page in this book is $100 per barrel oil and $5.32 per gallon gasoline.
The Truth Behind The Iraq Invasion And A Possible US Conflict With Iran
It is now openly obvious why the US (and its 'coalition of the willing') invaded Iraq (without UN backing) in 2003 under the banner ‘Operation Iraqi Freedom’. It wasn't for the reasons the Bush administration maintained at the time (suspected WMD, a link between Saddam and Al Qaeda, etc. etc.) but to do with the petrodollar. Many people suspected that oil was the underlying reason but few were aware of the more important need to maintain the 'petrodollar recycling' system.
Petrodollar recycling was introduced by the US in the early 70's, when Middle Eastern countries were beginning to produce oil of their own under the OPEC group of nations. Previously, most of the worlds oil was supplied by the US and all trading in this market was carried out using US dollars. When OPEC came into competition with the US oil giants, the Americans struck a deal with their Middle Eastern counterparts in which they would supply Saudi Arabia, etc. with arms as long as OPEC traded their oil in dollars. This meant that if a country wanted oil, for example Japan, they had to sell to the US their home-produced products (Toyota cars for example) in order to raise the necessary dollars to buy their oil from an OPEC country. These dollars were then invested back into the US by, for example, Saudi Arabia and this left the US in a great position. As long as they could print enough dollars to meet demand they would continue to dominate the worlds oil markets and would (and did) make a fortune doing so. This is what ultimately has made the US into the worlds only superpower, with the ability to afford the necessary military might to match.
Thirty years later, at the turn of the millenium, this cosy arrangement came under threat. Saddam Hussein announced his intention to begin trading oil in the other world currency - Euros - and began doing so before the US invasion in 2003. This gave the US serious concerns. With a massive dept of trillions of dollars (made worse by the habit of the average US citizen to spend far more than they saved, using credit to do so) the US could not afford to stand by and watch the petrodollar recycling system be undermined. The risk to the country's status as sole superpower was massive and with the debt the prospect of US economic collapse was very much a reality.
When elected into office, George Bush had as priority #1 to sort out this petrodollar threat by gaining control of Iraq and in 2003 he invaded. One of the first post-war actions was to revert the country's oil trading currency back to the US dollar, even though this meant that approximately 13% of Iraqs trading value was instantly lost (because the Euro was worth more than the dollar at the time). The invasion was also to serve as an example to neighbouring oil producers not to go down the same 'petroeuro' route.
Unfortunately, Iran has plans to begin trading its oil in Euros and Saudi Arabia is giving serious consideration to the idea. Should this happen the US is likely to economically implode, with its massive military very quickly becoming an unaffordable asset. America would become little more than just another country and its global influence would be consigned to the history books, something that is regarded as unthinkable by the corporate elite.
So the US looks increasingly likely to carry out an attack on Iran, probably involving tactical 'battlefield' nuclear weapons (in an attempt to destroy underground installations there). It is not because the Iranians are close to producing their own nuclear arsenal (the Washington Post reported that the most recent National Intelligence Estimate (NIE) of Iran’s nuclear program revealed that, “Iran is about a decade away from manufacturing the key ingredient for a nuclear weapon, roughly doubling the previous estimate of five years.” (see source) but rather to keep the petrodollar on track.
Wargame simulations carried out by the US resulted in the following conclusion being reached by Sam Gardiner, the retired Air Force colonel who has run war games at the National War College for the past two decades: “After all this effort, I am left with two simple sentences for policymakers: You have no military solution for the issues of Iran. And you have to make diplomacy work.” The problem is, as was highlighted in the Iraq invasion and post-war years, that the neo-cons in the Bush administration are prone to acting illogically and against advice provided by people who know far better than themselves.
Internationally-respected reporter Seymour Hearsh wrote the following in The New Yorker one year ago:
"In my interviews [with former high-level intelligence officials], I was repeatedly told that the next strategic target was Iran. Everyone is saying, ‘You can’t be serious about targeting Iran. Look at Iraq,’ the former [CIA] intelligence official told me. But the [Bush administration officials] say, ‘We’ve got some lessons learned – not militarily, but how we did it politically. We’re not going to rely on agency pissants.’ No loose ends, and that’s why the C.I.A. is out of there."
However, a disturbing article by intelligence analyst Philip Giraldi who, in an article entitled “In Case of Emergency, Nuke Iran,”, said:
"The Pentagon, acting under instructions from Vice President Dick Cheney's office, has tasked the United States Strategic Command (STRATCOM) with drawing up a contingency plan to be employed in response to another 9/11-type terrorist attack on the United States. The plan includes a large-scale air assault on Iran employing both conventional and tactical nuclear weapons. Within Iran there are more than 450 major strategic targets, including numerous suspected nuclear-weapons-program development sites. Many of the targets are hardened or are deep underground and could not be taken out by conventional weapons, hence the nuclear option. As in the case of Iraq, the response is not conditional on Iran actually being involved in the act of terrorism directed against the United States. Several senior Air Force officers involved in the planning are reportedly appalled at the implications of what they are doing – that Iran is being set up for an unprovoked nuclear attack – but no one is prepared to damage his career by posing any objections.
Should the US decide to carry out such an attack on Iran, China would undoubtedly become involved, since its massive economic expansion is heavily reliant on oil from the region. With Iran planning on introducing its Euro-based trading system in March this year (coinciding with Israel accelerating its US-backed strike plan - see source) events are likely to come to a head very soon.
The US is leading us down a road to potential global conflict in order to protect its dominance in the world oil markets and is seemingly likely to bring about the pre-conditions to justify an attack regardless of the consequences. Hopefully there will be no 'coalition of the willing' giving Bush and Cheney some kind of international credibility and this may help to deter them from following their plans through, but we're surely in for a bumpy year, one in which the spectre of the US administration and its shadowy backers showing its true colours is quite horrifying.
Friday, January 13, 2006
As Others See Us
As big as the internet is, I suppose it covers most points of view to varying degrees. For fun and enlightenment, I often seek out the “opposite” POV from mine just to see what the other bozos are saying. That’s what I thought when I first ventured into Al Jazeera. Instead, I found it usually had refreshingly straightforward reporting. I recommended it on this blog saying something like “be brave” and don’t worry about being put on a NSA list (see Echelon). Maybe not so sure about that these days, so I’m reprinting this article in its entirety here so you won’t have to go there. Am I the only one who went to school for 19 years and didn’t learn any modern history? Give this a try for a brief course.
Iraq oil - the target for years
By Ahmad Quni
Sunday 10 August 2003
US policy towards Iraq has always been shaped by the country’s rich oil resources, its strategic location on the Gulf and its regional weight.
...
Roots of ambitions
The roots of US ambitions in Iraq go back to the aftermath of World War I (WWI) which put an end to Turkish presence in the region. Then the Sykes-Picot agreement, signed by the British and the French, re-carved the Middle East creating new entities ruled either directly by the colonialist powers or by puppet regimes. Despite the underlying differences, Britain and France agreed to divide the Fertile Crescent encompassing Iraq, Syria, Palestine, Lebanon and Jordan, between them as areas of influence.
France got Lebanon and Syria, while Palestine, Jordan, and the two southern provinces of Iraq-Baghdad and al-Basra went to Britain.
However, the status of the province of Mosul, an integral part of Iraq for thousands of years, remained unresolved.
Though it was part of the French sphere of influence, as agreed, the British were determined to keep Mosul within their new Iraq colony.
Immediately after Turkey was defeated, the British army occupied Mosul and the imperialist struggle between Britain and France over Mosul heralded the beginnings of US ambitions in Iraq.
The apparent cause of rivalry between Britain and France, and at a later stage the US, over Mosul was its known but largely undeveloped oil resources.
Though its effort in WWI was very limited, the US, emerging as a super power, was keen to ensure that its economic and political interests were taken into account in the post-war world of the Middle East, as it came to be called by the imperialist powers.
Oil was at the top of these concerns as the importance of the Gulf Region was mounting in view of its huge oil reserves.
Open-door policy
Faced with the British and French domination over the region’s huge resources, the US at first demanded an “open door” policy allowing US companies to freely negotiate oil contracts with the puppet monarchy of King Faisal whom the British had installed in Iraq.
In 1927, major oil explorations were undertaken and huge oil deposits were discovered in the Mosul province, which fuelled the rivalry among competing colonialist oil companies even further.
However, a settlement was arranged and Iraqi oil was divided up into five portions, 23.75% for each of several companies from Britain, France, Holland and the United States.
The Iraqi people were left with virtually nothing of their oil wealth, and this unfair situation continued until 1958 when the Hashemite monarchy was toppled in a military coup.
The Iraqi petroleum company, shared by British Petroleum, Shell, Mobil and Standard Oil of New Jersey (Exxon) was established. Within a few years, this company had a total monopoly of Iraqi oil production.
Yet, the US oil companies and their government in Washington, were not satisfied since their target was to achieve complete control of the Middle East oil by displacing the British.
Growing US role
Following the end of WWI, the British Empire was greatly weakened by the war in which it lost key colonies in Asia. On the other hand, the US grew increasingly powerful throughout the world.
The administrations of Presidents Franklin Roosevelt and Harry Truman dominated by big banking, oil and other corporate interests, were determined to restructure the post-war world to ensure US domination.
Thus, one of the key elements of the US domination strategy was aimed at controlling global resources, particularly oil.
Within this context, the US threw its full weight behind the Shah of Iran who was one of its closest allies in the region.
By mid 1950, US influence in Iraq was almost as powerful as that of Britain which was the actual colonising force on the ground.
In 1955, the Baghdad Pact , including in addition to Iraq Turkey, Pakistan, Iran and the UK was set up to counter the rise of Arab and other liberation movements in the Middle East and Asia.
The 1958 revolution
By July 1958, a military coup overthrew the Iraqi monarchy, a development that the US regarded as detrimental to its vital interests and immediately landed 20,000 marines in Lebanon in the context of what was known as the “Eisenhower doctrine.”
In accordance with that doctrine, the US would intervene directly and even go to war to protect its interests in the Middle East.
The Eisenhower administration then considered the idea of invading Iraq, to overturn the new regime and to install a new puppet government in Iraq.
But the US was forced to abandon that plan due to several regional and international factors including the support given by China and the Soviet Union to the revolutionary government in Iraq.
The US however, never stopped targeting Iraq as one of its adversaries in the region and rendered unlimited support to the rebel right-wing Kurdish insurgency in the north of the country.
In the eighties when the US lost its main ally in Iran, its relations with the Saddam regime in Baghdad thawed to a considerable extent and it even supported Iraq in its war with Iran.
However that honeymoon ended when Iraq invaded Kuwait in 1990 and the US hurried to protect and preserve its interests in the oil-rich region.
Iraq oil - the target for years
By Ahmad Quni
Sunday 10 August 2003
US policy towards Iraq has always been shaped by the country’s rich oil resources, its strategic location on the Gulf and its regional weight.
...
Roots of ambitions
The roots of US ambitions in Iraq go back to the aftermath of World War I (WWI) which put an end to Turkish presence in the region. Then the Sykes-Picot agreement, signed by the British and the French, re-carved the Middle East creating new entities ruled either directly by the colonialist powers or by puppet regimes. Despite the underlying differences, Britain and France agreed to divide the Fertile Crescent encompassing Iraq, Syria, Palestine, Lebanon and Jordan, between them as areas of influence.
France got Lebanon and Syria, while Palestine, Jordan, and the two southern provinces of Iraq-Baghdad and al-Basra went to Britain.
However, the status of the province of Mosul, an integral part of Iraq for thousands of years, remained unresolved.
Though it was part of the French sphere of influence, as agreed, the British were determined to keep Mosul within their new Iraq colony.
Immediately after Turkey was defeated, the British army occupied Mosul and the imperialist struggle between Britain and France over Mosul heralded the beginnings of US ambitions in Iraq.
The apparent cause of rivalry between Britain and France, and at a later stage the US, over Mosul was its known but largely undeveloped oil resources.
Though its effort in WWI was very limited, the US, emerging as a super power, was keen to ensure that its economic and political interests were taken into account in the post-war world of the Middle East, as it came to be called by the imperialist powers.
Oil was at the top of these concerns as the importance of the Gulf Region was mounting in view of its huge oil reserves.
Open-door policy
Faced with the British and French domination over the region’s huge resources, the US at first demanded an “open door” policy allowing US companies to freely negotiate oil contracts with the puppet monarchy of King Faisal whom the British had installed in Iraq.
In 1927, major oil explorations were undertaken and huge oil deposits were discovered in the Mosul province, which fuelled the rivalry among competing colonialist oil companies even further.
However, a settlement was arranged and Iraqi oil was divided up into five portions, 23.75% for each of several companies from Britain, France, Holland and the United States.
The Iraqi people were left with virtually nothing of their oil wealth, and this unfair situation continued until 1958 when the Hashemite monarchy was toppled in a military coup.
The Iraqi petroleum company, shared by British Petroleum, Shell, Mobil and Standard Oil of New Jersey (Exxon) was established. Within a few years, this company had a total monopoly of Iraqi oil production.
Yet, the US oil companies and their government in Washington, were not satisfied since their target was to achieve complete control of the Middle East oil by displacing the British.
Growing US role
Following the end of WWI, the British Empire was greatly weakened by the war in which it lost key colonies in Asia. On the other hand, the US grew increasingly powerful throughout the world.
The administrations of Presidents Franklin Roosevelt and Harry Truman dominated by big banking, oil and other corporate interests, were determined to restructure the post-war world to ensure US domination.
Thus, one of the key elements of the US domination strategy was aimed at controlling global resources, particularly oil.
Within this context, the US threw its full weight behind the Shah of Iran who was one of its closest allies in the region.
By mid 1950, US influence in Iraq was almost as powerful as that of Britain which was the actual colonising force on the ground.
In 1955, the Baghdad Pact , including in addition to Iraq Turkey, Pakistan, Iran and the UK was set up to counter the rise of Arab and other liberation movements in the Middle East and Asia.
The 1958 revolution
By July 1958, a military coup overthrew the Iraqi monarchy, a development that the US regarded as detrimental to its vital interests and immediately landed 20,000 marines in Lebanon in the context of what was known as the “Eisenhower doctrine.”
In accordance with that doctrine, the US would intervene directly and even go to war to protect its interests in the Middle East.
The Eisenhower administration then considered the idea of invading Iraq, to overturn the new regime and to install a new puppet government in Iraq.
But the US was forced to abandon that plan due to several regional and international factors including the support given by China and the Soviet Union to the revolutionary government in Iraq.
The US however, never stopped targeting Iraq as one of its adversaries in the region and rendered unlimited support to the rebel right-wing Kurdish insurgency in the north of the country.
In the eighties when the US lost its main ally in Iran, its relations with the Saddam regime in Baghdad thawed to a considerable extent and it even supported Iraq in its war with Iran.
However that honeymoon ended when Iraq invaded Kuwait in 1990 and the US hurried to protect and preserve its interests in the oil-rich region.
Wednesday, January 11, 2006
I Strongly Recommend That You Listen Up!
The new "normal" rush of Bush Bad News is hard to keep up with. The guy is stumbling badly. Did you see his Alito intro? Harhar. He can't even repeat what's sent into his ear!
Like It Is
"America's long slide towards authoritarianism has greatly accelerated since our version of the Reichstag fire on 9/11, and I see no prospect of it even slowing, much less reversing. It makes me nostalgic for the days of Reagan; even if the reality was two steps backward for one step forward, he at least seemed good-hearted. The Baby Bush, on the other hand, appears to be stupid, ignorant, stubborn, and mean-spirited. I don't know whether or not to credit the reports that he's hitting the bottle again and flies into fits of rage when his will is challenged. Is it possible Bush is also psychologically imbalanced? That is certainly possible, given his stated views on torture. But, looking to the bright side, at least he's not Dick Cheney, who appears to be a genuinely degraded being."
- Doug Casey, today's Daily Reckoning
Scandal creeps like a New Orleans mold through the corrupt walls of a befouled Republican house.
Still to come. the "Cunningham" stuff, fake defense-industry companies sucking off of black budgets and distributing monthly payments to our Representatives. Direct in your face Agnew type really stupid graft (Many of the fake companies had the same address.)
But in the meantime, don't forget the really freaky, once in a life time, big blow to the head which is about to hit you from your blind side, the upcoming degradation of the US dollar. Read back 3 or 4 posts if you want the gory details, but buddy, this is coming up soon.
Some of my friends, including the guy who said this blog was "nothing but bad news that I can't do anything about”, are now asking, "Okay, suppose you are right, what am I supposed to do?"
1. Start reading. Educate yourself with Google. Subscribe to newsletters and news feeds. I strongly recommend that you get “The Daily Reckoning”. I’ve been reading it for years and I think the contributors are very perceptive. I fact, I just signed up for Doug Casey’s newsletter on gold and silver investing.
2. Buy some CEF stock. This Canadian company does nothing but hold gold and silver. You own the stock, not the metal. Check its trend and buy if it dips.
3. Buy GLD stock. This is a fund that tracks the exact price of gold.
(Digression) Unfortunately, there is as yet no similar silver fund. The mention of it sent the Silver Users Association into shock. They screamed that this “hoarding” would drive the price up! Duh! There is more silver being consumed yearly than is being produced. Silver could easily quadruple, even without a dollar meltdown. But buying silver producers means relying on good management.
4. Buy some gold or silver Eagles – 1 oz coins produced by our Mint. Very beautiful. Go to http://www.kitco.com/. Put them in a safe, or safe deposit box.
5. Sell any real estate you own, including your house, and rent something nicer, preferrable something off the grid, with its own water supply. Okay, this an extreme move, and you may not be ready for it yet, but my house is on the market right now.
I could go on about laying in supplies, planning your vegetable garden, defending yourself, and so on, but I’ll leave that to you.
Countdown
49 days until the Iranian Oil Bourse is set to open. Will Bush be able to run to the U.N. for sanctions and still have time to start the bombing? Stay tuned.
Like It Is
"America's long slide towards authoritarianism has greatly accelerated since our version of the Reichstag fire on 9/11, and I see no prospect of it even slowing, much less reversing. It makes me nostalgic for the days of Reagan; even if the reality was two steps backward for one step forward, he at least seemed good-hearted. The Baby Bush, on the other hand, appears to be stupid, ignorant, stubborn, and mean-spirited. I don't know whether or not to credit the reports that he's hitting the bottle again and flies into fits of rage when his will is challenged. Is it possible Bush is also psychologically imbalanced? That is certainly possible, given his stated views on torture. But, looking to the bright side, at least he's not Dick Cheney, who appears to be a genuinely degraded being."
- Doug Casey, today's Daily Reckoning
Scandal creeps like a New Orleans mold through the corrupt walls of a befouled Republican house.
Still to come. the "Cunningham" stuff, fake defense-industry companies sucking off of black budgets and distributing monthly payments to our Representatives. Direct in your face Agnew type really stupid graft (Many of the fake companies had the same address.)
But in the meantime, don't forget the really freaky, once in a life time, big blow to the head which is about to hit you from your blind side, the upcoming degradation of the US dollar. Read back 3 or 4 posts if you want the gory details, but buddy, this is coming up soon.
Some of my friends, including the guy who said this blog was "nothing but bad news that I can't do anything about”, are now asking, "Okay, suppose you are right, what am I supposed to do?"
1. Start reading. Educate yourself with Google. Subscribe to newsletters and news feeds. I strongly recommend that you get “The Daily Reckoning”. I’ve been reading it for years and I think the contributors are very perceptive. I fact, I just signed up for Doug Casey’s newsletter on gold and silver investing.
2. Buy some CEF stock. This Canadian company does nothing but hold gold and silver. You own the stock, not the metal. Check its trend and buy if it dips.
3. Buy GLD stock. This is a fund that tracks the exact price of gold.
(Digression) Unfortunately, there is as yet no similar silver fund. The mention of it sent the Silver Users Association into shock. They screamed that this “hoarding” would drive the price up! Duh! There is more silver being consumed yearly than is being produced. Silver could easily quadruple, even without a dollar meltdown. But buying silver producers means relying on good management.
4. Buy some gold or silver Eagles – 1 oz coins produced by our Mint. Very beautiful. Go to http://www.kitco.com/. Put them in a safe, or safe deposit box.
5. Sell any real estate you own, including your house, and rent something nicer, preferrable something off the grid, with its own water supply. Okay, this an extreme move, and you may not be ready for it yet, but my house is on the market right now.
I could go on about laying in supplies, planning your vegetable garden, defending yourself, and so on, but I’ll leave that to you.
Countdown
49 days until the Iranian Oil Bourse is set to open. Will Bush be able to run to the U.N. for sanctions and still have time to start the bombing? Stay tuned.
Monday, January 02, 2006
Tipping Point Sighted on Horizon
German media: U.S. prepares Iran strike
By MARTIN WALKER
UPI Editor
WASHINGTON, Dec. 30 (UPI) -- The Bush administration is preparing its NATO allies for a possible military strike against suspected nuclear sites in Iran in the New Year, according to German media reports, reinforcing similar earlier suggestions in the Turkish media.
The Berlin daily Der Tagesspiegel this week quoted "NATO intelligence sources" who claimed that the NATO allies had been informed that the United States is currently investigating all possibilities of bringing the mullah-led regime into line, including military options. This "all options are open" line has been President George W Bush's publicly stated policy throughout the past 18 months.
But the respected German weekly Der Spiegel notes "What is new here is that Washington appears to be dispatching high-level officials to prepare its allies for a possible attack rather than merely implying the possibility as it has repeatedly done during the past year."
The German news agency DDP cited "Western security sources" to claim that CIA Director Porter Goss asked Turkey's premier Recep Tayyip Erdogan to provide political and logistic support for air strikes against Iranian nuclear and military targets. Goss, who visited Ankara and met Erdogan on Dec. 12, was also reported to have to have asked for special cooperation from Turkish intelligence to help prepare and monitor the operation.
The DDP report added that Goss had delivered to the Turkish prime minister and his security aides a series of dossiers, one on the latest status of Iran's nuclear development and another containing intelligence on new links between Iran and al-Qaida.
DDP cited German security sources who added that the Turks had been assured of a warning in advance if and when the military strikes took place, and had also been given "a green light" to mount their own attacks on the bases in Iran of the PKK, (Kurdish Workers party), which Turkey sees as a separatist group responsible for terrorist attacks inside Turkey.
By MARTIN WALKER
UPI Editor
WASHINGTON, Dec. 30 (UPI) -- The Bush administration is preparing its NATO allies for a possible military strike against suspected nuclear sites in Iran in the New Year, according to German media reports, reinforcing similar earlier suggestions in the Turkish media.
The Berlin daily Der Tagesspiegel this week quoted "NATO intelligence sources" who claimed that the NATO allies had been informed that the United States is currently investigating all possibilities of bringing the mullah-led regime into line, including military options. This "all options are open" line has been President George W Bush's publicly stated policy throughout the past 18 months.
But the respected German weekly Der Spiegel notes "What is new here is that Washington appears to be dispatching high-level officials to prepare its allies for a possible attack rather than merely implying the possibility as it has repeatedly done during the past year."
The German news agency DDP cited "Western security sources" to claim that CIA Director Porter Goss asked Turkey's premier Recep Tayyip Erdogan to provide political and logistic support for air strikes against Iranian nuclear and military targets. Goss, who visited Ankara and met Erdogan on Dec. 12, was also reported to have to have asked for special cooperation from Turkish intelligence to help prepare and monitor the operation.
The DDP report added that Goss had delivered to the Turkish prime minister and his security aides a series of dossiers, one on the latest status of Iran's nuclear development and another containing intelligence on new links between Iran and al-Qaida.
DDP cited German security sources who added that the Turks had been assured of a warning in advance if and when the military strikes took place, and had also been given "a green light" to mount their own attacks on the bases in Iran of the PKK, (Kurdish Workers party), which Turkey sees as a separatist group responsible for terrorist attacks inside Turkey.
Sunday, January 01, 2006
2006 Part 2 - Doomsday for the Greenback.
I know these last two articles are long, but I felt it necessary to publish them here with minimal editing because of their importance.
Mike Whitney: 'Doomsday for the greenback'
Thursday, December 29
A preemptive attack on Iran would "provoke other industrial nations to strategically abandon the dollar en masse"... "in an effort to thwart the neoconservatives from pursuing their desperate strategy of dominating the world's hydrocarbon energy supply." William R. Clark "Petrodollar Warfare; Dollars, Euros and the upcoming Iranian Oil Bourse" (see last post).
The Federal Reserve is the financial headquarters for the cartel of multinational banking establishments. The confederation of banks in the Fed underwrites the exploitative activities of the world's main industries and sets rates in a manner that best serves their objectives. This is how the bankers perpetuate the system of economic hegemony and apply the shackle of debt and dependence to the planet's most destitute countries.
The Federal Reserve is every bit as critical to the maintenance of the empire as its political counterparts in Washington or its blood-brothers in the US Military. It is the largest of the empire's three gears; economic, political and military, which mobilize the mighty wheel of state terror.
If we look carefully at the Iraq war, the main financial institutions stood squarely behind the hostilities and did their best to create a hospitable economic environment for aggression. The Federal Reserve dropped the prime rate to a paltry 1.5% just 6 months before the Iraq invasion to keep the American economy purring along while Bush dragged the nation to war. The bloody footprints for Iraq lead straight to the oak-panel doors of America's primary lenders even before they trail off to the bastions of America's energy giants.
There's a reason for this. The main impetus for the war was not petroleum, but greenbacks and the future of a currency that is underwritten by $8 trillion of debt. The only way to safeguard its dominance is to back up the listing dollar with boatloads of oil. And, that is exactly the plan.
The Capital of Empire America's capital is not in Washington DC. In fact, it is not geographic location at all. It is the greenback, the epicenter of the global rule. The dollar is the cornerstone upon which the mighty pillars of empire rest.
At the same time, the greenback is the greatest swindle in human history; a worthless scrap of paper buried beneath a mountain of debt. It is only through the skillful mix of politics, diplomacy, and brute force that the grand deception is maintained. As America's fortunes grow more tenuous, the probability of attacks on the dollar will increase exponentially.
Even now, nations are conspiring to knock the dollar from its towering summit and introduce a more equitable system. At present, the greenback serves as the world's reserve currency, the main medium of exchange. This allows the US to pile up enormous debt while avoiding the pitfalls of skyrocketing interest rates or hyper-inflation. The $2 billion of borrowed wealth that props up the faltering empire every day comes primarily from the exporting powerhouses Japan and China. This means that America's profligate spending is financed by the labor of some of the most poorly paid workers in the world. Ironically, sweatshop workers in Kwantung Province are now bankrolling the criminal occupation of Iraq by facilitating America's massive trade deficits.
Every greenback carries with it the accumulated weight of two centuries of war, slavery, and ethnic cleansing of Native Americans. It is the flaccid script that has fueled 50 years of covert activities, coup d'etats, and third-world death-squads. It churns through the arteries of the empire to the furthest most extremities where torture and abuse are carried out beneath the tri-colored standard. It is strewn across the empire like the myriad gulags that now speckle the planet. It is the heart of the beast; a venom-pumping organ with arteries strung across the globe like the concertina-wire that surrounds Falluja, Samarra and Tal Afar.
....
As the empire extends its withering grip to the world's last resource-centers, the dollar is coming under increasing scrutiny. It is the dollar that facilitates the perennial war and the vast expansion of military force; just as it is the dollar that binds together the constellation of American colonies that function exclusively in the interests of their Washington overlords. The asymmetrical warfare that is approaching will put the greenback squarely in the crosshairs; the weak-link in America's coat of mail.
Hugo Chavez knows this, as did Saddam; that's why he switched to the euro 6 months before "Shock and Awe". Now, Putin is trading oil in euros and Iran will open an oil bourse in petro-euros in March. For Iran, its actions are tantamount to a declaration of war. Already, America's proxy Israel has threatened to attack in March. Is it merely coincidence that Iran's oil bourse is scheduled to open at the same time?
No, it's not.
The empire requires a steady diet of petrodollars to maintain its gluttonous appetite for debt. If the oil-producing nations switch to euros, the dollar would freefall like a wingless gull and America would be trapped in a bottomless vat of red ink.
America's prodigious dept has made the war for the world's remaining resources an existential struggle. A retreat from Iraq is no longer possible. If America's debt is not propped up with oil reserves the anemic dollar will crumble with the economy following right behind.
In William R. Clark's "Petrodollar Warfare; Dollars, Euros and the upcoming Iranian Oil Bourse", Clark outlines the problems the dollar faces if Iran proceeds with its plan to use a euro-based oil trading exchange. The new Iranian bourse would compete head-on with the New York Mercantile Exchange (NYMEX) and London's International Petroleum Exchange IPE) giving international buyers an option of "buying a barrel of oil $60 on the NYMEX or IPE or 45 to 50 euros via the Iranian bourse." Clark calls this the Federal Reserves "biggest nightmare" as it would precipitate a face-off between the dollar and the euro and would fundamentally change the dynamics in the world's largest market. "
In essence, the US will no longer be able to effortlessly expand credit via US Treasury Bills, and the dollars demand-liquidity will quickly fall." This will "challenge the hegemony currently enjoyed by the financial centers in both London and New York."
In other words; doomsday for the greenback.
Clark also notes that "both Russia and China significantly increased their central bank holdings of the euro, which appears to be a coordinated move to facilitate the anticipated ascendance of the euro as a second world reserve currency." This would effectively end the petrodollars hegemony as the "monopoly oil currency".
The world is preparing for a seismic shift in the global power-structure, but Washington believes it can forestall that change through military force. The prospect of a competing Iranian oil-exchange greatly increases the likelihood of a unilateral attack by the US. Clark anticipates that this may "provoke other industrial nations to strategically abandon the dollar en masse"..."While central bankers throughout the world community would be extremely reluctant to 'dump the dollar'"... "They would likely move in tandem on the currency exchange markets in an effort to thwart the neoconservatives from pursuing their desperate strategy of dominating the world's hydrocarbon energy supply."
A strategy to "dump the dollar"? Some variant of Clark's scenario will undoubtedly transpire pending an American attack on Iran. The world will not confront the empire militarily, but neither will they stand idly by while vital oil resources are put at risk. A coordinated assault on the dollar is an extreme, but probable consequence.
The vulnerability of the dollar, skittering atop an ocean of red ink, has become the Achilles heel of the empire. Washington may believe that its weakness is well-concealed behind a wall of high-tech weaponry and media propaganda, but potential adversaries will certainly know where to strike if they are forced to respond. America's future has grown increasingly uncertain due to the reckless militarism of its leaders. An attack on Iran is sure to incite an asymmetrical war that will target the greenback; dislodging it from its lofty perch.
When the dollar collapses, the baling-wire of economic coercion that keeps the empire sewn together will quickly unravel.
Mike Whitney: 'Doomsday for the greenback'
Thursday, December 29
A preemptive attack on Iran would "provoke other industrial nations to strategically abandon the dollar en masse"... "in an effort to thwart the neoconservatives from pursuing their desperate strategy of dominating the world's hydrocarbon energy supply." William R. Clark "Petrodollar Warfare; Dollars, Euros and the upcoming Iranian Oil Bourse" (see last post).
The Federal Reserve is the financial headquarters for the cartel of multinational banking establishments. The confederation of banks in the Fed underwrites the exploitative activities of the world's main industries and sets rates in a manner that best serves their objectives. This is how the bankers perpetuate the system of economic hegemony and apply the shackle of debt and dependence to the planet's most destitute countries.
The Federal Reserve is every bit as critical to the maintenance of the empire as its political counterparts in Washington or its blood-brothers in the US Military. It is the largest of the empire's three gears; economic, political and military, which mobilize the mighty wheel of state terror.
If we look carefully at the Iraq war, the main financial institutions stood squarely behind the hostilities and did their best to create a hospitable economic environment for aggression. The Federal Reserve dropped the prime rate to a paltry 1.5% just 6 months before the Iraq invasion to keep the American economy purring along while Bush dragged the nation to war. The bloody footprints for Iraq lead straight to the oak-panel doors of America's primary lenders even before they trail off to the bastions of America's energy giants.
There's a reason for this. The main impetus for the war was not petroleum, but greenbacks and the future of a currency that is underwritten by $8 trillion of debt. The only way to safeguard its dominance is to back up the listing dollar with boatloads of oil. And, that is exactly the plan.
The Capital of Empire America's capital is not in Washington DC. In fact, it is not geographic location at all. It is the greenback, the epicenter of the global rule. The dollar is the cornerstone upon which the mighty pillars of empire rest.
At the same time, the greenback is the greatest swindle in human history; a worthless scrap of paper buried beneath a mountain of debt. It is only through the skillful mix of politics, diplomacy, and brute force that the grand deception is maintained. As America's fortunes grow more tenuous, the probability of attacks on the dollar will increase exponentially.
Even now, nations are conspiring to knock the dollar from its towering summit and introduce a more equitable system. At present, the greenback serves as the world's reserve currency, the main medium of exchange. This allows the US to pile up enormous debt while avoiding the pitfalls of skyrocketing interest rates or hyper-inflation. The $2 billion of borrowed wealth that props up the faltering empire every day comes primarily from the exporting powerhouses Japan and China. This means that America's profligate spending is financed by the labor of some of the most poorly paid workers in the world. Ironically, sweatshop workers in Kwantung Province are now bankrolling the criminal occupation of Iraq by facilitating America's massive trade deficits.
Every greenback carries with it the accumulated weight of two centuries of war, slavery, and ethnic cleansing of Native Americans. It is the flaccid script that has fueled 50 years of covert activities, coup d'etats, and third-world death-squads. It churns through the arteries of the empire to the furthest most extremities where torture and abuse are carried out beneath the tri-colored standard. It is strewn across the empire like the myriad gulags that now speckle the planet. It is the heart of the beast; a venom-pumping organ with arteries strung across the globe like the concertina-wire that surrounds Falluja, Samarra and Tal Afar.
....
As the empire extends its withering grip to the world's last resource-centers, the dollar is coming under increasing scrutiny. It is the dollar that facilitates the perennial war and the vast expansion of military force; just as it is the dollar that binds together the constellation of American colonies that function exclusively in the interests of their Washington overlords. The asymmetrical warfare that is approaching will put the greenback squarely in the crosshairs; the weak-link in America's coat of mail.
Hugo Chavez knows this, as did Saddam; that's why he switched to the euro 6 months before "Shock and Awe". Now, Putin is trading oil in euros and Iran will open an oil bourse in petro-euros in March. For Iran, its actions are tantamount to a declaration of war. Already, America's proxy Israel has threatened to attack in March. Is it merely coincidence that Iran's oil bourse is scheduled to open at the same time?
No, it's not.
The empire requires a steady diet of petrodollars to maintain its gluttonous appetite for debt. If the oil-producing nations switch to euros, the dollar would freefall like a wingless gull and America would be trapped in a bottomless vat of red ink.
America's prodigious dept has made the war for the world's remaining resources an existential struggle. A retreat from Iraq is no longer possible. If America's debt is not propped up with oil reserves the anemic dollar will crumble with the economy following right behind.
In William R. Clark's "Petrodollar Warfare; Dollars, Euros and the upcoming Iranian Oil Bourse", Clark outlines the problems the dollar faces if Iran proceeds with its plan to use a euro-based oil trading exchange. The new Iranian bourse would compete head-on with the New York Mercantile Exchange (NYMEX) and London's International Petroleum Exchange IPE) giving international buyers an option of "buying a barrel of oil $60 on the NYMEX or IPE or 45 to 50 euros via the Iranian bourse." Clark calls this the Federal Reserves "biggest nightmare" as it would precipitate a face-off between the dollar and the euro and would fundamentally change the dynamics in the world's largest market. "
In essence, the US will no longer be able to effortlessly expand credit via US Treasury Bills, and the dollars demand-liquidity will quickly fall." This will "challenge the hegemony currently enjoyed by the financial centers in both London and New York."
In other words; doomsday for the greenback.
Clark also notes that "both Russia and China significantly increased their central bank holdings of the euro, which appears to be a coordinated move to facilitate the anticipated ascendance of the euro as a second world reserve currency." This would effectively end the petrodollars hegemony as the "monopoly oil currency".
The world is preparing for a seismic shift in the global power-structure, but Washington believes it can forestall that change through military force. The prospect of a competing Iranian oil-exchange greatly increases the likelihood of a unilateral attack by the US. Clark anticipates that this may "provoke other industrial nations to strategically abandon the dollar en masse"..."While central bankers throughout the world community would be extremely reluctant to 'dump the dollar'"... "They would likely move in tandem on the currency exchange markets in an effort to thwart the neoconservatives from pursuing their desperate strategy of dominating the world's hydrocarbon energy supply."
A strategy to "dump the dollar"? Some variant of Clark's scenario will undoubtedly transpire pending an American attack on Iran. The world will not confront the empire militarily, but neither will they stand idly by while vital oil resources are put at risk. A coordinated assault on the dollar is an extreme, but probable consequence.
The vulnerability of the dollar, skittering atop an ocean of red ink, has become the Achilles heel of the empire. Washington may believe that its weakness is well-concealed behind a wall of high-tech weaponry and media propaganda, but potential adversaries will certainly know where to strike if they are forced to respond. America's future has grown increasingly uncertain due to the reckless militarism of its leaders. An attack on Iran is sure to incite an asymmetrical war that will target the greenback; dislodging it from its lofty perch.
When the dollar collapses, the baling-wire of economic coercion that keeps the empire sewn together will quickly unravel.
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