flavio
Banned
Interesting read on the subject brought up in another thread
IT'S NOT ABOUT OIL OR IRAQ.
IT'S ABOUT THE US AND EUROPE
GOING HEAD-TO-HEAD ON WORLD ECONOMIC DOMINANCE.
By Geoffrey Heard
Melbourne, Australia
There are many things driving President Bush and his
administration to invade Iraq, unseat Saddam Hussein
and take over the country. But the biggest one is
hidden and very, very simple. It is about the currency
used to trade oil and consequently, who will dominate
the world economically, in the foreseeable future --
the USA or the European Union.
Iraq is a European Union beachhead in that
confrontation. America had a monopoly on tthe oil
trade, with the US dollar being the fiat currency, but
Iraq broke ranks in 1999, started to trade oil in the
EU's euros, and profited. If America invades Iraq and
takes over, it will hurl the EU and its euro back into
the sea and make America's position as the dominant
economic power in the world all but impregnable. It is
the biggest grab for world power in modern times.
America's allies in the invasion, Britain and
Australia, are betting America will win and that they
will get some trickle-down benefits for jumping on to
the US bandwagon.
France and Germany are the spearhead of the European
force -- Russia would like to go European but possibly
can still be bought off.
Presumably, China would like to see the Europeans
build a share of international trade currency
ownership at this point while it
continues to grow its international trading presence
to the point
where it, too, can share the leadership rewards.
DEBATE BUILDING ON THE INTERNET
Oddly, little or nothing is appearing in the general
media about this issue, although key people are
becoming aware of it -- note the recent slide in the
value of the US dollar. Are traders afraid of war?
They are more likely to be afraid there will not be
war.
But despite the silence in the general media, a major
world discussion is developing around this issue,
particularly on the internet. Among the many articles:
Henry Liu, in the 'Asia Times' last June, it has been
a hot topic on the Feasta forum, an Irish-based group
exploring sustainable economics, and W. Clark's "The
Real Reasons for the Upcoming War with Iraq: A
Macroeconomic and Geostrategic Analysis of the
Unspoken Truth" has been published by the 'Sierra
Times', 'Indymedia.org', and 'ratical.org'.
This debate is not about whether America would suffer
from losing the US dollar monopoly on oil trading --
that is a given -- rather it is about exactly how hard
the USA would be hit. The smart money seems to be
saying the impact would be in the range from severe to
catastrophic. The USA could collapse economically.
OIL DOLLARS
The key to it all is the fiat currency for trading
oil.
Under an OPEC agreement, all oil has been traded in US
dollars since 1971 (after the dropping of the gold
standard) which makes the US dollar the de facto major
international trading currency. If other nations have
to hoard dollars to buy oil, then they want to use
that hoard for other trading too. This fact gives
America a huge trading advantage and helps make it
the dominant economy in the world.
As an economic bloc, the European Union is the only
challenger to the USA's economic position, and it
created the euro to challenge the dollar in
international markets. However, the EU is not yet
united behind the euro -- there is a lot of jingoistic
national politics involved, not least in Britain --
and in any case, so long as nations throughout the
world must hoard dollars to buy oil, the euro can make
only very limited inroads into the dollar's dominance.
In 1999, Iraq, with the world's second largest oil
reserves, switched to trading its oil in euros.
American analysts fell about laughing; Iraq had just
made a mistake that was going to beggar the nation.
But two years on, alarm bells were sounding; the euro
was rising against the dollar, Iraq had given itself a
huge economic free kick by switching.
Iran started thinking about switching too; Venezuela,
the 4th largest oil producer, began looking at it and
has been cutting out the dollar
by bartering oil with several nations including
America's bete noir, Cuba. Russia is seeking to ramp
up oil production with Europe (trading in euros) an
obvious market.
The greenback's grip on oil trading and consequently
on world trade in general, was under serious threat.
If America did not stamp on this immediately, this
economic brushfire could rapidly be fanned into a
wildfire capable of consuming the US's economy and its
dominance of world trade.
HOW DOES THE US GET ITS DOLLAR ADVANTAGE?
Imagine this: you are deep in debt but every day you
write cheques for millions of dollars you don't have
-- another luxury car, a holiday home at the beach,
the world trip of a lifetime.
Your cheques should be worthless but they keep buying
stuff because those cheques you write never reach the
bank! You have an agreement with the owners of one
thing everyone wants, call it petrol/gas, that they
will accept only your cheques as payment. This means
everyone must hoard your cheques so they can buy
petrol/gas. Since they have to keep a stock of your
cheques, they use them to buy other stuff too. You
write a cheque to buy a TV, the TV shop owner swaps
your
cheque for petrol/gas, that seller buys some
vegetables at the fruit shop, the fruiterer passes it
on to buy bread, the baker buys some flour with it,
and on it goes, round and round -- but never back to
the bank.
You have a debt on your books, but so long as your
cheque never reaches the bank, you don't have to pay.
In effect, you have received your TV free.
This is the position the USA has enjoyed for 30 years
-- it has been getting a free world trade ride for all
that time. It has been
receiving a huge subsidy from everyone else in the
world. As it debt has been growing, it has printed
more money (written more cheques) to keep trading. No
wonder it is an economic powerhouse!
Then one day, one petrol seller says he is going to
accept another person's cheques, a couple of others
think that might be a good idea.
If this spreads, people are going to stop hoarding
your cheques and they will come flying home to the
bank. Since you don't have enough in the bank to cover
all the cheques, very nasty stuff is going to hit the
fan!
But you are big, tough and very aggressive. You don't
scare the other guy who can write cheques, he's pretty
big too, but given a 'legitimate' excuse, you can beat
the tripes out of the lone gas seller and scare him
and his mates into submission.
And that, in a nutshell, is what the USA is doing
right now with Iraq.
AMERICA'S PRECARIOUS ECONOMIC POSITION
America is so eager to attack Iraq now because of the
speed with which the euro fire could spread. If Iran,
Venezuela and Russia join Iraq and sell large
quantities of oil for euros, the euro would have the
leverage it needs to become a powerful force in
general international trade. Other nations would have
to start swapping some of their dollars for euros.
The dollars the USA has printed, the 'cheques' it has
written, would start to fly home, stripping away the
illusion of value behind them. The USA's real economic
condition is about as bad as it could be; it is the
most debt-ridden nation on earth, owing about
US$12,000 for every single one of it's 280 million
men, women and children. It is worse than the position
of Indonesia when it imploded economically a few years
ago, or more recently, that of Argentina.
Even if OPEC did not switch to euros wholesale (and
that would make a very nice non-oil profit for the
OPEC countries, including minimising the various
contrived debts America has forced on some of them),
the US's difficulties would build. Even if only a
small part of the oil trade went euro, that would do
two things immediately:
* Increase the attractiveness to EU members of
joining the 'eurozone', which in turn would make the
euro stronger and make it more attractive to oil
nations as a trading currency and to other nations as
a general trading currency.
* Start the US dollars flying home demanding value
when there isn't enough in the bank to cover them.
* The markets would over-react as usual and in no
time, the US dollar's value would be spiralling down.
THE US SOLUTION
America's response to the euro threat was predictable.
It has come out fighting.
It aims to achieve four primary things by going to war
with Iraq:
* Safeguard the American economy by returning Iraq to
trading oil in US dollars, so the greenback is once
again the exclusive oil currency.
* Send a very clear message to any other oil
producers just what will happen to them if they do not
stay in the dollar circle. Iran has already received
one message -- remember how puzzled you were that in
the midst of moderation and secularization, Iran was
named as a member of the axis of evil?
* Place the second largest reserves of oil in the
world under direct American control.
* Provide a secular, subject state where the US can
maintain a huge force (perhaps with nominal elements
from allies such as Britain and Australia) to dominate
the Middle East and its vital oil. This would enable
the US to avoid using what it sees as the unreliable
Turkey, the politically impossible Israel and surely
the next state in its sights, Saudi Arabia, the
birthplace of al Qaeda and a hotbed of anti-American
sentiment.
* Severe setback the European Union and its euro, the
only trading bloc and currency strong enough to attack
the USA's dominance of world trade through the dollar.
* Provide cover for the US to run a covert operation
to overturn the democratically elected government of
Venezuela and replace it with an America-friendly
military supported junta -- and put Venezuala's oil
into American hands.
Locking the world back into dollar oil trading would
consolidate America's current position and make it all
but impregnable as the dominant world power --
economically and militarily. A splintered Europe (the
US is working hard to split Europe; Britain was easy,
but other Europeans have offered support in terms of
UN votes) and its
euro would suffer a serious setback and might take
decades to recover.
It is the boldest grab for absolute power the world
has seen in modern times. America is hardly likely to
allow the possible slaughter of a few hundred thousand
Iraqis stand between it and world domination.
President Bush did promise to protect the American way
of life. This is what he meant.
JUSTIFYING WAR
Obviously, the US could not simply invade Iraq, so it
began casting around for a 'legitimate' reason to
attack. That search has been one of increasing
desperation as each rationalization has crumbled.
First Iraq was a threat because of alleged links to al
Qaeda; then it was proposed Iraq might supply al Qaeda
with weapons; then Iraq's military threat to its
neighbours was raised; then the need to deliver Iraqis
from Saddam Hussein's horrendously inhumane rule;
finally there is the question of compliance with UN
weapons inspection.
The USA's justifications for invading Iraq are looking
less impressive by the day. The US's statements that
it would invade Iraq unilaterally without UN support
and in defiance of the UN make a total nonsense of any
American claim that it is concerned about the world
body's strength and standing.
The UN weapons inspectors have come up with minimal
infringements of the UN weapons limitations -- the
final one being low tech rockets which exceed the
range allowed by about 20 percent. But there is no
sign of the so-called weapons of mass destruction
(WMD) the US has so confidently asserted are to be
found. Colin Powell named a certain north Iraqi
village as a threat. It was not. He later admitted it
was the wrong village.
'Newsweek' (24/2) has reported that while Bush
officials have been trumpeting the fact that key Iraqi
defector, Lt. Gen. Hussein Kamel, told the US in 1995
that Iraq had manufactured ton of nerve gas and
anthrax (Colin Powell's 5 February presentation to the
UN wasjust one example) they neglected to mention that
Kamel had also told the US that these weapons had been
destroyed.
Parts of the US and particularly the British secret
'evidence' have been shown to come from a student's
masters thesis. America's expressed concern about
the Iraqi people's human rights and the country's lack
of democracy are simply not supported by the USA's
history of intervention in other states nor by its
current actions. Think Guatemala, the Congo, Chile and
Nicaragua as examples of a much larger pool of US
actions to tear down legitimate, democratically
elected governments and replace them with war,
disruption, starvation, poverty, corruption,
dictatorships, torture, rape and murder for its own
economic ends. The most recent, Afghanistan, is not
looking good; in fact that reinstalled a murderous
group of warlords which America had earlier installed,
then deposed, in favour of the now hated Taliban.
Saddam Hussein was just as repressive, corrupt and
murderous 15 years ago when he used chemical weapons,
supplied by the US, against the Kurds. The current US
Secretary for Defence, Donald Rumsfeld, so vehement
against Iraq now, was on hand personally to turn aside
condemnation of Iraq and blame Iran. At that time, of
course, the US thought Saddam Hussein was their man --
they were using him against the perceived threat of
Iran's Islamic fundamentalism. Right now, as 'The
Independent' writer, Robert Fisk, has noted, the US's
efforts to buy Algeria's UN vote includes promises of
re-arming the military which has a decade long history
of repression, torture, rape and murder Saddam Hussein
himself would envy. It is estimated 200,000 people
have died, and countless others been left maimed by
the activities of these monsters. What price the US's
humanitarian concerns for Iraqis? (Of course, the
French are also wooing Algeria, their former north
African territory, for all they are worth, but at
least they are not pretending to be driven by
humanitarian concerns.)
Indonesia is another nation with a vote and influence
as the largest Muslim nation in the world. Its
repressive, murderous military is regaining strength
on the back of the US's so-called anti-terror campaign
and is receiving promises of open and covert support
-- including intelligence sharing.
AND VENEZUELA While the world's attention is focused
on Iraq, America is both openly and covertly
supporting the "coup of the rich" in Venezuela, which
grabbed power briefly in April last year before being
intimidated by massive public displays of support by
the poor for democratically-elected President Chavez
Frias. The coup leaders continue to use their control
of the private media, much of industry and the ear of
the American Government and its oily intimates to
cause disruption and disturbance.
Venezuela's state-owned oil resources would make rich
pickings for American oil companies and provide the US
with an important oil source in its own backyard.
Many writers have noted the contradiction between
America's alleged desire to establish democracy in
Iraq while at the same time, actively undermining the
democratically-elected government in Venezuela. Above
the line, America rushed to recognise the coup last
April; more recently, President Bush has called for
"early elections", ignoring the fact that President
Chavez Frias has won three elections and two
referendums and, in any case, early elections would be
unconstitutional.
One element of the USA's covert action against
Venezuela is the behaviour of American transnational
businesses, which have locked out employees in support
of "national strike" action. Imagine them doing that
in the USA! There is no question that a covert
operation is in process to overturn the legitimate
Venezuelan government. Uruguayan congressman, Jose
Nayardi, made it public when he revealed that the Bush
administration had asked for Uruguay's support for
Venezuelan white collar executives and trade union
activists "to break down levels of intransigence
within the Chavez Frias administration". The process,
he noted, was a shocking reminder of the CIA's 1973
intervention in Chile which saw General Pinochet lead
his military coup to take over President Allende's
democratically elected government in a bloodbath.
President Chavez Frias is desperately clinging to
government, but with the might of the USA aligned with
his opponents, how long can he last?
THE COST OF WAR
Some have claimed that an American invasion of Iraq
would cost so many billions of dollars that oil
returns would never justify such an action.
But when the invasion is placed in the context of the
protection of the entire US economy for now and into
the future, the balance of the argument changes.
Further, there are three other vital factors:
First, America will be asking others to help pay for
the war because it is protecting their interests.
Japan and Saudi Arabia made serious contributions to
the cost of the 1991 Gulf war.
Second -- in reality, war will cost the USA very
little -- or at least, very little over and above
normal expenditure. This war is already paid for! All
the munitions and equipment have been bought and paid
for. The USA would have to spend hardly a cent on new
hardware to prosecute this war -- the expenditure will
come later when munitions and equipment have to be
replaced after the war. But munitions, hardware and so
on are being replaced all the time -- contracts are
out. Some contracts will simply be brought forward and
some others will be ramped up a bit, but spread over a
few years, the cost will not be great. And what is the
real extra cost of an army at war compared with
maintaining the standing army around the world,
running exercises and so on? It is there, but it is a
relatively small sum.
Third -- lots of the extra costs involved in the war
are dollars spent outside America, not least in the
purchase of fuel. Guess how America will pay for
these? By printing dollars it is going to war to
protect. The same happens when production begins to
replace hardware. components, minerals, etc. are
bought in with dollars that go overseas and exploit
America's trading advantage.
The cost of war is not nearly as big as it is made out
to be. The cost of not going to war would be
horrendous for the USA â “ unless there were another
way of protecting the greenback's world trade
dominance.
AMERICA'S TWO ACTIVE ALLIES
Why are Australia and Britain supporting America in
its transparent Iraqi war ploy?
Australia, of course, has significant US dollar
reserves and trades widely in dollars and extensively
with America. A fall in the US dollar would reduce
Australia's debt, perhaps, but would do nothing for
the Australian dollar's value against other
currencies. John Howard, the Prime Minister, has long
cherished the dream of a free trade agreement with the
USA in the hope that Australia can jump on the back of
the free ride America gets in trade through the
dollar's position as the major trading medium. That
would look much less attractive if the euro took over
a significant part of the oil trade.
Britain has yet to adopt the euro. If the US takes
over Iraq and blocks the euro's incursion into oil
trading, Tony Blair will have given his French and
German counterparts a bloody nose, and gained more
room to manouevre on the issue -- perhaps years more
room. Britain would be in a position to demand a
better deal from its EU partners for entering the
"eurozone" if the new currency could not make the
huge value gains guaranteed by a significant role in
world oil trading. It might even be in a position to
withdraw from Europe and link with America against
continental Europe.
On the other hand, if the US cannot maintain the oil
trade dollar monopoly, the euro will rapidly go from
strength to strength, and Britain could be left
begging to be allowed into the club.
THE OPPOSITION
Some of the reasons for opposition to the American
plan are obvious -- America is already the strongest
nation on earth and dominates world trade through its
dollar. If it had control of the Iraqi oil and a base
for its forces in the Middle East, it would not add
to, but would multiply its power.
The oil-producing nations, particularly the Arab ones,
can see the writing on the wall and are quaking in
their boots.
France and Germany are the EU leaders with the vision
of a resurgent, united Europe taking its rightful
place in the world and using its euro currency as a
world trading reserve currency and thus gaining some
of the free ride the United States enjoys now. They
are the ones who initiated the euro oil trade with
Iraq.
Russia is in deep economic trouble and knows it will
get worse the day America starts exploiting its
take-over of Afghanistan by running a pipeline
southwards via Afghanistan from the giant southern
Caspian oil fields. Currently, that oil is piped
northwards -- where Russia has control.
Russia is in the process of ramping up oil production
with the possibility of trading some of it for euros
and selling some to the US itself. Russia already has
enough problems with the fact that oil is traded in US
dollars; if the US has control of Iraqi oil, it could
distort the market to Russia's enormous disadvantage.
In addition, Russia has interests in Iraqi oil; an
American take over could see them lost. Already on its
knees, Russia could be beggared before a mile of the
Afghanistan pipeline is laid.
ANOTHER SOLUTION?
The scenario clarifies the seriousness of America's
position and explains its frantic drive for war. It
also suggests that solutions other than war are
possible.
Could America agree to share the trading goodies by
allowing Europe to have a negotiated part of it? Not
very likely, but it is just possible Europe can stare
down the USA and force such an outcome. Time will
tell. What about Europe taking the statesmanlike,
humanitarian and long view, and withdrawing, leaving
the oil to the US, with appropriate safeguards for
ordinary Iraqis and democracy in Venezuela?
Europe might then be forced to adopt a smarter
approach â “ perhaps accelerating the development of
alternative energy technologies which would reduce the
EU's reliance on oil for energy and produce goods it
could trade for euros -- shifting the world trade
balance. Now that would be a very positive outcome
for everyone.
.Geoffrey Heard is a Melbourne, Australia, writer on
the environment, sustainability and human rights.
. . . .
Geoffrey Heard C 2003. Anyone is free to circulate
this document provided it is complete and in its
current form with attribution and no payment is asked.
It is prohibited to reproduce this document or any
part of it for commercial gain without the prior
permission of the author. For such permission, contact
the author at
[email protected].
'The Real Reasons for the Upcoming War With Iraq: A
Macroeconomic and Geostrategic Analysis of the
Unspoken Truth' by W. Clark, January 2003 (revised 20
February), Independent Media Center,
www.indymedia.org
http://www.indymedia.ie/cgi-bin/newswire.cgi?id=28334â
This war is about more than oil. OIL DOLLARS!!!!
DOLLARS, THE EURO AND WAR IN IRAQ. This story is
based on material posted by Richard Douthwaite on the
FEASTA list in Ireland.
http://sf.indymedia.org/news/2002/12/1550023_comment.php#1551138
USA intelligence agencies revealed in plot to oust
Venezuela's President
Washington Post Split Screen In Strike-Torn Venezuela
By Mark Weisbrot Sunday, January 12, 2003; Page B04
http://www.atimes.com/global-econ/DD11Dj01.html Asia
Times online: Global Economy US dollar hegemony has
got to go By Henry C K Liu
http://www.feasta.org/energy.htm
http://www.ratical.org/ratville/CAH/EnemyWithin.html
The Observer
The Enemy Within
by Gore Vidal London, Sunday 27 October 2002
IT'S NOT ABOUT OIL OR IRAQ.
IT'S ABOUT THE US AND EUROPE
GOING HEAD-TO-HEAD ON WORLD ECONOMIC DOMINANCE.
By Geoffrey Heard
Melbourne, Australia
There are many things driving President Bush and his
administration to invade Iraq, unseat Saddam Hussein
and take over the country. But the biggest one is
hidden and very, very simple. It is about the currency
used to trade oil and consequently, who will dominate
the world economically, in the foreseeable future --
the USA or the European Union.
Iraq is a European Union beachhead in that
confrontation. America had a monopoly on tthe oil
trade, with the US dollar being the fiat currency, but
Iraq broke ranks in 1999, started to trade oil in the
EU's euros, and profited. If America invades Iraq and
takes over, it will hurl the EU and its euro back into
the sea and make America's position as the dominant
economic power in the world all but impregnable. It is
the biggest grab for world power in modern times.
America's allies in the invasion, Britain and
Australia, are betting America will win and that they
will get some trickle-down benefits for jumping on to
the US bandwagon.
France and Germany are the spearhead of the European
force -- Russia would like to go European but possibly
can still be bought off.
Presumably, China would like to see the Europeans
build a share of international trade currency
ownership at this point while it
continues to grow its international trading presence
to the point
where it, too, can share the leadership rewards.
DEBATE BUILDING ON THE INTERNET
Oddly, little or nothing is appearing in the general
media about this issue, although key people are
becoming aware of it -- note the recent slide in the
value of the US dollar. Are traders afraid of war?
They are more likely to be afraid there will not be
war.
But despite the silence in the general media, a major
world discussion is developing around this issue,
particularly on the internet. Among the many articles:
Henry Liu, in the 'Asia Times' last June, it has been
a hot topic on the Feasta forum, an Irish-based group
exploring sustainable economics, and W. Clark's "The
Real Reasons for the Upcoming War with Iraq: A
Macroeconomic and Geostrategic Analysis of the
Unspoken Truth" has been published by the 'Sierra
Times', 'Indymedia.org', and 'ratical.org'.
This debate is not about whether America would suffer
from losing the US dollar monopoly on oil trading --
that is a given -- rather it is about exactly how hard
the USA would be hit. The smart money seems to be
saying the impact would be in the range from severe to
catastrophic. The USA could collapse economically.
OIL DOLLARS
The key to it all is the fiat currency for trading
oil.
Under an OPEC agreement, all oil has been traded in US
dollars since 1971 (after the dropping of the gold
standard) which makes the US dollar the de facto major
international trading currency. If other nations have
to hoard dollars to buy oil, then they want to use
that hoard for other trading too. This fact gives
America a huge trading advantage and helps make it
the dominant economy in the world.
As an economic bloc, the European Union is the only
challenger to the USA's economic position, and it
created the euro to challenge the dollar in
international markets. However, the EU is not yet
united behind the euro -- there is a lot of jingoistic
national politics involved, not least in Britain --
and in any case, so long as nations throughout the
world must hoard dollars to buy oil, the euro can make
only very limited inroads into the dollar's dominance.
In 1999, Iraq, with the world's second largest oil
reserves, switched to trading its oil in euros.
American analysts fell about laughing; Iraq had just
made a mistake that was going to beggar the nation.
But two years on, alarm bells were sounding; the euro
was rising against the dollar, Iraq had given itself a
huge economic free kick by switching.
Iran started thinking about switching too; Venezuela,
the 4th largest oil producer, began looking at it and
has been cutting out the dollar
by bartering oil with several nations including
America's bete noir, Cuba. Russia is seeking to ramp
up oil production with Europe (trading in euros) an
obvious market.
The greenback's grip on oil trading and consequently
on world trade in general, was under serious threat.
If America did not stamp on this immediately, this
economic brushfire could rapidly be fanned into a
wildfire capable of consuming the US's economy and its
dominance of world trade.
HOW DOES THE US GET ITS DOLLAR ADVANTAGE?
Imagine this: you are deep in debt but every day you
write cheques for millions of dollars you don't have
-- another luxury car, a holiday home at the beach,
the world trip of a lifetime.
Your cheques should be worthless but they keep buying
stuff because those cheques you write never reach the
bank! You have an agreement with the owners of one
thing everyone wants, call it petrol/gas, that they
will accept only your cheques as payment. This means
everyone must hoard your cheques so they can buy
petrol/gas. Since they have to keep a stock of your
cheques, they use them to buy other stuff too. You
write a cheque to buy a TV, the TV shop owner swaps
your
cheque for petrol/gas, that seller buys some
vegetables at the fruit shop, the fruiterer passes it
on to buy bread, the baker buys some flour with it,
and on it goes, round and round -- but never back to
the bank.
You have a debt on your books, but so long as your
cheque never reaches the bank, you don't have to pay.
In effect, you have received your TV free.
This is the position the USA has enjoyed for 30 years
-- it has been getting a free world trade ride for all
that time. It has been
receiving a huge subsidy from everyone else in the
world. As it debt has been growing, it has printed
more money (written more cheques) to keep trading. No
wonder it is an economic powerhouse!
Then one day, one petrol seller says he is going to
accept another person's cheques, a couple of others
think that might be a good idea.
If this spreads, people are going to stop hoarding
your cheques and they will come flying home to the
bank. Since you don't have enough in the bank to cover
all the cheques, very nasty stuff is going to hit the
fan!
But you are big, tough and very aggressive. You don't
scare the other guy who can write cheques, he's pretty
big too, but given a 'legitimate' excuse, you can beat
the tripes out of the lone gas seller and scare him
and his mates into submission.
And that, in a nutshell, is what the USA is doing
right now with Iraq.
AMERICA'S PRECARIOUS ECONOMIC POSITION
America is so eager to attack Iraq now because of the
speed with which the euro fire could spread. If Iran,
Venezuela and Russia join Iraq and sell large
quantities of oil for euros, the euro would have the
leverage it needs to become a powerful force in
general international trade. Other nations would have
to start swapping some of their dollars for euros.
The dollars the USA has printed, the 'cheques' it has
written, would start to fly home, stripping away the
illusion of value behind them. The USA's real economic
condition is about as bad as it could be; it is the
most debt-ridden nation on earth, owing about
US$12,000 for every single one of it's 280 million
men, women and children. It is worse than the position
of Indonesia when it imploded economically a few years
ago, or more recently, that of Argentina.
Even if OPEC did not switch to euros wholesale (and
that would make a very nice non-oil profit for the
OPEC countries, including minimising the various
contrived debts America has forced on some of them),
the US's difficulties would build. Even if only a
small part of the oil trade went euro, that would do
two things immediately:
* Increase the attractiveness to EU members of
joining the 'eurozone', which in turn would make the
euro stronger and make it more attractive to oil
nations as a trading currency and to other nations as
a general trading currency.
* Start the US dollars flying home demanding value
when there isn't enough in the bank to cover them.
* The markets would over-react as usual and in no
time, the US dollar's value would be spiralling down.
THE US SOLUTION
America's response to the euro threat was predictable.
It has come out fighting.
It aims to achieve four primary things by going to war
with Iraq:
* Safeguard the American economy by returning Iraq to
trading oil in US dollars, so the greenback is once
again the exclusive oil currency.
* Send a very clear message to any other oil
producers just what will happen to them if they do not
stay in the dollar circle. Iran has already received
one message -- remember how puzzled you were that in
the midst of moderation and secularization, Iran was
named as a member of the axis of evil?
* Place the second largest reserves of oil in the
world under direct American control.
* Provide a secular, subject state where the US can
maintain a huge force (perhaps with nominal elements
from allies such as Britain and Australia) to dominate
the Middle East and its vital oil. This would enable
the US to avoid using what it sees as the unreliable
Turkey, the politically impossible Israel and surely
the next state in its sights, Saudi Arabia, the
birthplace of al Qaeda and a hotbed of anti-American
sentiment.
* Severe setback the European Union and its euro, the
only trading bloc and currency strong enough to attack
the USA's dominance of world trade through the dollar.
* Provide cover for the US to run a covert operation
to overturn the democratically elected government of
Venezuela and replace it with an America-friendly
military supported junta -- and put Venezuala's oil
into American hands.
Locking the world back into dollar oil trading would
consolidate America's current position and make it all
but impregnable as the dominant world power --
economically and militarily. A splintered Europe (the
US is working hard to split Europe; Britain was easy,
but other Europeans have offered support in terms of
UN votes) and its
euro would suffer a serious setback and might take
decades to recover.
It is the boldest grab for absolute power the world
has seen in modern times. America is hardly likely to
allow the possible slaughter of a few hundred thousand
Iraqis stand between it and world domination.
President Bush did promise to protect the American way
of life. This is what he meant.
JUSTIFYING WAR
Obviously, the US could not simply invade Iraq, so it
began casting around for a 'legitimate' reason to
attack. That search has been one of increasing
desperation as each rationalization has crumbled.
First Iraq was a threat because of alleged links to al
Qaeda; then it was proposed Iraq might supply al Qaeda
with weapons; then Iraq's military threat to its
neighbours was raised; then the need to deliver Iraqis
from Saddam Hussein's horrendously inhumane rule;
finally there is the question of compliance with UN
weapons inspection.
The USA's justifications for invading Iraq are looking
less impressive by the day. The US's statements that
it would invade Iraq unilaterally without UN support
and in defiance of the UN make a total nonsense of any
American claim that it is concerned about the world
body's strength and standing.
The UN weapons inspectors have come up with minimal
infringements of the UN weapons limitations -- the
final one being low tech rockets which exceed the
range allowed by about 20 percent. But there is no
sign of the so-called weapons of mass destruction
(WMD) the US has so confidently asserted are to be
found. Colin Powell named a certain north Iraqi
village as a threat. It was not. He later admitted it
was the wrong village.
'Newsweek' (24/2) has reported that while Bush
officials have been trumpeting the fact that key Iraqi
defector, Lt. Gen. Hussein Kamel, told the US in 1995
that Iraq had manufactured ton of nerve gas and
anthrax (Colin Powell's 5 February presentation to the
UN wasjust one example) they neglected to mention that
Kamel had also told the US that these weapons had been
destroyed.
Parts of the US and particularly the British secret
'evidence' have been shown to come from a student's
masters thesis. America's expressed concern about
the Iraqi people's human rights and the country's lack
of democracy are simply not supported by the USA's
history of intervention in other states nor by its
current actions. Think Guatemala, the Congo, Chile and
Nicaragua as examples of a much larger pool of US
actions to tear down legitimate, democratically
elected governments and replace them with war,
disruption, starvation, poverty, corruption,
dictatorships, torture, rape and murder for its own
economic ends. The most recent, Afghanistan, is not
looking good; in fact that reinstalled a murderous
group of warlords which America had earlier installed,
then deposed, in favour of the now hated Taliban.
Saddam Hussein was just as repressive, corrupt and
murderous 15 years ago when he used chemical weapons,
supplied by the US, against the Kurds. The current US
Secretary for Defence, Donald Rumsfeld, so vehement
against Iraq now, was on hand personally to turn aside
condemnation of Iraq and blame Iran. At that time, of
course, the US thought Saddam Hussein was their man --
they were using him against the perceived threat of
Iran's Islamic fundamentalism. Right now, as 'The
Independent' writer, Robert Fisk, has noted, the US's
efforts to buy Algeria's UN vote includes promises of
re-arming the military which has a decade long history
of repression, torture, rape and murder Saddam Hussein
himself would envy. It is estimated 200,000 people
have died, and countless others been left maimed by
the activities of these monsters. What price the US's
humanitarian concerns for Iraqis? (Of course, the
French are also wooing Algeria, their former north
African territory, for all they are worth, but at
least they are not pretending to be driven by
humanitarian concerns.)
Indonesia is another nation with a vote and influence
as the largest Muslim nation in the world. Its
repressive, murderous military is regaining strength
on the back of the US's so-called anti-terror campaign
and is receiving promises of open and covert support
-- including intelligence sharing.
AND VENEZUELA While the world's attention is focused
on Iraq, America is both openly and covertly
supporting the "coup of the rich" in Venezuela, which
grabbed power briefly in April last year before being
intimidated by massive public displays of support by
the poor for democratically-elected President Chavez
Frias. The coup leaders continue to use their control
of the private media, much of industry and the ear of
the American Government and its oily intimates to
cause disruption and disturbance.
Venezuela's state-owned oil resources would make rich
pickings for American oil companies and provide the US
with an important oil source in its own backyard.
Many writers have noted the contradiction between
America's alleged desire to establish democracy in
Iraq while at the same time, actively undermining the
democratically-elected government in Venezuela. Above
the line, America rushed to recognise the coup last
April; more recently, President Bush has called for
"early elections", ignoring the fact that President
Chavez Frias has won three elections and two
referendums and, in any case, early elections would be
unconstitutional.
One element of the USA's covert action against
Venezuela is the behaviour of American transnational
businesses, which have locked out employees in support
of "national strike" action. Imagine them doing that
in the USA! There is no question that a covert
operation is in process to overturn the legitimate
Venezuelan government. Uruguayan congressman, Jose
Nayardi, made it public when he revealed that the Bush
administration had asked for Uruguay's support for
Venezuelan white collar executives and trade union
activists "to break down levels of intransigence
within the Chavez Frias administration". The process,
he noted, was a shocking reminder of the CIA's 1973
intervention in Chile which saw General Pinochet lead
his military coup to take over President Allende's
democratically elected government in a bloodbath.
President Chavez Frias is desperately clinging to
government, but with the might of the USA aligned with
his opponents, how long can he last?
THE COST OF WAR
Some have claimed that an American invasion of Iraq
would cost so many billions of dollars that oil
returns would never justify such an action.
But when the invasion is placed in the context of the
protection of the entire US economy for now and into
the future, the balance of the argument changes.
Further, there are three other vital factors:
First, America will be asking others to help pay for
the war because it is protecting their interests.
Japan and Saudi Arabia made serious contributions to
the cost of the 1991 Gulf war.
Second -- in reality, war will cost the USA very
little -- or at least, very little over and above
normal expenditure. This war is already paid for! All
the munitions and equipment have been bought and paid
for. The USA would have to spend hardly a cent on new
hardware to prosecute this war -- the expenditure will
come later when munitions and equipment have to be
replaced after the war. But munitions, hardware and so
on are being replaced all the time -- contracts are
out. Some contracts will simply be brought forward and
some others will be ramped up a bit, but spread over a
few years, the cost will not be great. And what is the
real extra cost of an army at war compared with
maintaining the standing army around the world,
running exercises and so on? It is there, but it is a
relatively small sum.
Third -- lots of the extra costs involved in the war
are dollars spent outside America, not least in the
purchase of fuel. Guess how America will pay for
these? By printing dollars it is going to war to
protect. The same happens when production begins to
replace hardware. components, minerals, etc. are
bought in with dollars that go overseas and exploit
America's trading advantage.
The cost of war is not nearly as big as it is made out
to be. The cost of not going to war would be
horrendous for the USA â “ unless there were another
way of protecting the greenback's world trade
dominance.
AMERICA'S TWO ACTIVE ALLIES
Why are Australia and Britain supporting America in
its transparent Iraqi war ploy?
Australia, of course, has significant US dollar
reserves and trades widely in dollars and extensively
with America. A fall in the US dollar would reduce
Australia's debt, perhaps, but would do nothing for
the Australian dollar's value against other
currencies. John Howard, the Prime Minister, has long
cherished the dream of a free trade agreement with the
USA in the hope that Australia can jump on the back of
the free ride America gets in trade through the
dollar's position as the major trading medium. That
would look much less attractive if the euro took over
a significant part of the oil trade.
Britain has yet to adopt the euro. If the US takes
over Iraq and blocks the euro's incursion into oil
trading, Tony Blair will have given his French and
German counterparts a bloody nose, and gained more
room to manouevre on the issue -- perhaps years more
room. Britain would be in a position to demand a
better deal from its EU partners for entering the
"eurozone" if the new currency could not make the
huge value gains guaranteed by a significant role in
world oil trading. It might even be in a position to
withdraw from Europe and link with America against
continental Europe.
On the other hand, if the US cannot maintain the oil
trade dollar monopoly, the euro will rapidly go from
strength to strength, and Britain could be left
begging to be allowed into the club.
THE OPPOSITION
Some of the reasons for opposition to the American
plan are obvious -- America is already the strongest
nation on earth and dominates world trade through its
dollar. If it had control of the Iraqi oil and a base
for its forces in the Middle East, it would not add
to, but would multiply its power.
The oil-producing nations, particularly the Arab ones,
can see the writing on the wall and are quaking in
their boots.
France and Germany are the EU leaders with the vision
of a resurgent, united Europe taking its rightful
place in the world and using its euro currency as a
world trading reserve currency and thus gaining some
of the free ride the United States enjoys now. They
are the ones who initiated the euro oil trade with
Iraq.
Russia is in deep economic trouble and knows it will
get worse the day America starts exploiting its
take-over of Afghanistan by running a pipeline
southwards via Afghanistan from the giant southern
Caspian oil fields. Currently, that oil is piped
northwards -- where Russia has control.
Russia is in the process of ramping up oil production
with the possibility of trading some of it for euros
and selling some to the US itself. Russia already has
enough problems with the fact that oil is traded in US
dollars; if the US has control of Iraqi oil, it could
distort the market to Russia's enormous disadvantage.
In addition, Russia has interests in Iraqi oil; an
American take over could see them lost. Already on its
knees, Russia could be beggared before a mile of the
Afghanistan pipeline is laid.
ANOTHER SOLUTION?
The scenario clarifies the seriousness of America's
position and explains its frantic drive for war. It
also suggests that solutions other than war are
possible.
Could America agree to share the trading goodies by
allowing Europe to have a negotiated part of it? Not
very likely, but it is just possible Europe can stare
down the USA and force such an outcome. Time will
tell. What about Europe taking the statesmanlike,
humanitarian and long view, and withdrawing, leaving
the oil to the US, with appropriate safeguards for
ordinary Iraqis and democracy in Venezuela?
Europe might then be forced to adopt a smarter
approach â “ perhaps accelerating the development of
alternative energy technologies which would reduce the
EU's reliance on oil for energy and produce goods it
could trade for euros -- shifting the world trade
balance. Now that would be a very positive outcome
for everyone.
.Geoffrey Heard is a Melbourne, Australia, writer on
the environment, sustainability and human rights.
. . . .
Geoffrey Heard C 2003. Anyone is free to circulate
this document provided it is complete and in its
current form with attribution and no payment is asked.
It is prohibited to reproduce this document or any
part of it for commercial gain without the prior
permission of the author. For such permission, contact
the author at
[email protected].
'The Real Reasons for the Upcoming War With Iraq: A
Macroeconomic and Geostrategic Analysis of the
Unspoken Truth' by W. Clark, January 2003 (revised 20
February), Independent Media Center,
www.indymedia.org
http://www.indymedia.ie/cgi-bin/newswire.cgi?id=28334â
This war is about more than oil. OIL DOLLARS!!!!
DOLLARS, THE EURO AND WAR IN IRAQ. This story is
based on material posted by Richard Douthwaite on the
FEASTA list in Ireland.
http://sf.indymedia.org/news/2002/12/1550023_comment.php#1551138
USA intelligence agencies revealed in plot to oust
Venezuela's President
Washington Post Split Screen In Strike-Torn Venezuela
By Mark Weisbrot Sunday, January 12, 2003; Page B04
http://www.atimes.com/global-econ/DD11Dj01.html Asia
Times online: Global Economy US dollar hegemony has
got to go By Henry C K Liu
http://www.feasta.org/energy.htm
http://www.ratical.org/ratville/CAH/EnemyWithin.html
The Observer
The Enemy Within
by Gore Vidal London, Sunday 27 October 2002
