(please give it a read, or at least give it a scan of sorts. it's a really interesting read and it makes a ton of sense.)
America's Bush administration has been caught in outright lies, gross
exaggerations and incredible inaccuracies as it trotted out its
litany of paper thin excuses for making war on Iraq. Along with its two
supporters, Britain and Australia, it has shifted its ground and
reversed its position with a barefaced contempt for its audience. It has
manipulated information, deceived by commission and omission and
frantically bought UN votes with billion dollar bribes.
Faced with the failure of gaining UN Security Council support for
invading Iraq, the USA has threatened to invade without
authorisation. It would act in breach of the UNs very constitution to
allegedly enforced UN resolutions. It is plain bizarre. Where does this
desperation for war come from?
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 the 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,
andratical.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 dollars
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. Ifthis
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 minimizing
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 Venezuela'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 tonnes of nerve gas
and anthrax (Colin Powell's 5 February presentation to the UN was just
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, Donal 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 Chive 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 - 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
oiltrade 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- 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
America's Bush administration has been caught in outright lies, gross
exaggerations and incredible inaccuracies as it trotted out its
litany of paper thin excuses for making war on Iraq. Along with its two
supporters, Britain and Australia, it has shifted its ground and
reversed its position with a barefaced contempt for its audience. It has
manipulated information, deceived by commission and omission and
frantically bought UN votes with billion dollar bribes.
Faced with the failure of gaining UN Security Council support for
invading Iraq, the USA has threatened to invade without
authorisation. It would act in breach of the UNs very constitution to
allegedly enforced UN resolutions. It is plain bizarre. Where does this
desperation for war come from?
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 the 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,
andratical.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 dollars
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. Ifthis
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 minimizing
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 Venezuela'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 tonnes of nerve gas
and anthrax (Colin Powell's 5 February presentation to the UN was just
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, Donal 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 Chive 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 - 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
oiltrade 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- 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