global currency and oil politics - why Iraq and why now???

Discussion in 'Politics' started by andrasnm, Mar 20, 2003.

  1. It is often said the reasons behind war are oil. Those saying that often don't understand the true reasoning and so have no answer to critics who say (quite correctly) that the US could buy as much oil from Iraq as it wanted.

    Saddam was once happy to sell oil and would do so again if it avoided war. To understand the real reasons you have to look deeper; it's an oil currency war.

    OPEC prices are in US dollars due to a unique geo-political agreement made with Saudi Arabia in 1973. This has worked in favor of the US for the past 30 years. An arrangement which has eliminated US currency risk for oil, raised the entire asset value of all dollar denominated assets/properties,and allowed the Federal Reserve to create a truly massive debt and credit expansion (or `credit bubble' in the view of some economists). These structural imbalances in the U.S. economy are sustainable as long as:

    1. Nations continue to demand and purchase oil for their energy/survival needs, and
    2. The fiat reserve currency for global oil transactions remain the U.S. dollar (and dollar only).
    These underlying factors, along with the `safe harbor' reputation of U.S. investments afforded by the dollar's reserve currency status propelled the U.S. to economic and military hegemony in the post-World War II period. However, the introduction of the euro is a significant new factor, and appears to be the primary threat to U.S. economic hegemony.

    Moreover, in December 2002 ten additional countries were approved for full membership into the E.U. In 2004 this will result in an aggregate GDP of $9.6 trillion and 450 million people, directly competing with the U.S. economy ($10.5 trillion GDP, 280 million people).

    The Federal Reserve's greatest nightmare is that OPEC will switch its international transactions from a dollar standard to a euro standard. Iraq actually made this switch in Nov. 2000 (when the euro was worth around 82 cents), and has actually made off like a bandit considering the dollar's steady depreciation against the euro. (Note: the dollar declined 17% against the euro in 2002.)

    The real reason the Bush administration wants a puppet government in Iraq -- or more importantly, the reason why the corporate-military-industrial network conglomerate wants a puppet government in Iraq -- is so that it will revert back to a dollar standard and stay that way. (While also hoping to veto any wider OPEC momentum towards the euro, especially from Iran -- the 2nd largest OPEC producer who is actively discussing a switch to euros for its oil exports).

    Saddam sealed his fate when he decided to switch to the euro in late 2000

    The Trading Coach