I recall that
we’ve discussed this off-the-media’s-radar-screen issue before, but here is a
current perspective, as the tension mounts and the battle of words to mold
public opinion is underway. kwc
Iran’s
Oil-exchange threatens the Greenback
By Mike Whitney, Information Clearinghouse, Jan. 23, 2006
The Bush administration will never allow the Iranian government to
open an oil exchange (bourse) that trades petroleum in euros. If that were to
happen, hundreds of billions of dollars would come flooding back to the United
States crushing the greenback and destroying the economy. This is why Bush and
Co. are planning to lead the nation to war against Iran. It is straightforward
defense of the current global system and the continuing dominance of the
reserve currency, the dollar.
The claim that Iran is developing nuclear weapons is a mere pretext for war.
The NIE (National Intelligence Estimate) predicts that Iran will not be able to
produce nukes for perhaps a decade. So too, IAEA chief Mohammed ElBaradei has
said repeatedly that his watchdog agency has found “no evidence” of a nuclear
weapons program.
There are no nuclear weapons or nuclear weapons programs, but Iran’s economic
plans do pose an existential threat to America, and not one that can be simply
brushed aside as the unavoidable workings of the free market.
America monopolizes the oil trade. Oil is denominated in dollars and sold on
either the NYMEX or London’s International Petroleum Exchange (IPE), both owned
by Americans. This forces the central banks around the world to maintain huge
stockpiles of dollars even though the greenback is currently underwritten by $8
trillion of debt and even though the Bush administration has said that it will
perpetuate the deficit-producing tax cuts.
America’s currency monopoly is the perfect pyramid-scheme. As long as nations
are forced to buy oil in dollars, the United States can continue its profligate
spending with impunity. (The dollar now accounts for 68% of global currency
reserves up from 51% just a decade ago) The only threat to this strategy is the
prospect of competition from an independent oil exchange; forcing the faltering
dollar to go nose-to-nose with a more stable (debt-free) currency such as the
euro. That would compel central banks to diversify their holdings, sending
billions of dollars back to America and ensuring a devastating cycle of
hyper-inflation.
The effort to keep information about Iran’s oil exchange out of the headlines
has been extremely successful. A simple Google search shows that NONE of the
major newspapers or networks has referred to the upcoming bourse. The media’s
aversion to controversial stories which serve the public interest has been
evident in many other cases, too, like the fraudulent 2004 presidential
elections, the Downing Street Memo, and the flattening of Falluja. Rather than
inform, the media serves as a bullhorn for government policy; manipulating
public opinion by reiterating the specious demagoguery of the Bush
administration. As a result, few people have any idea of the gravity of the
present threat facing the American economy.
This is not a “liberal vs. conservative” issue. Those who’ve analyzed the
problem draw the very same conclusions; if the Iran exchange flourishes the
dollar will plummet and the American economy will shatter.
This is what author Krassimir Petrov, Ph.D in economics, says in a recent
article, The Proposed Iranian Oil Bourse:
“From
a purely economic point of view, should the Iranian Oil Bourse gain momentum,
it will be eagerly embraced by major economic powers and will precipitate the
demise of the dollar. The collapsing dollar will dramatically accelerate U.S.
inflation and will pressure upward U.S. long-term interest rates. At this
point, the Fed will find itself between …between deflation and
hyperinflation-it will be forced fast either to take its "classical
medicine" by deflating, whereby it raises interest rates, thus inducing a
major economic depression, a collapse in real estate, and an implosion in bond,
stock, and derivative markets, with a total financial collapse, or
alternatively, to take the Weimar way out by inflating, whereby it pegs the
long-bond yield, raises the Helicopters and drowns the financial system in liquidity,
bailing out numerous LTCMs and hyperinflating the economy.
No doubt,
Commander-in-Chief Ben Bernanke, a renowned scholar of the Great Depression…,
will choose inflation. …The Maestro has taught him the panacea of every single
financial problem-to inflate, come hell or high water. …To avoid deflation, he
will resort to the printing presses…and, if necessary, he will monetize
everything in sight. His ultimate accomplishment will be the hyperinflationary
destruction of the American currency …”
So, raise interest rates and bring on “total financial collapse” or take the
“Weimar way out” and cause the “hyperinflationary destruction of the American
economy.”
These are not good choices, and yet, we’re hearing the same pronouncements from
right-wing analysts. Alan Peter’s article, “Mullah’s Threat not Sinking In”,
which appeared in FrontPage Magazine.com, offers these equally sobering
thoughts about the dangers of an Iran oil-exchange:
“A glut of dollar holdings by Central Banks and among Asian lenders, plus
the current low interest rate offered to investor/lenders by the USA has been
putting the dollar in jeopardy for some time… A twitching finger on currency's
hair-trigger can shoot down the dollar without any purposeful ill intent. Most
estimates place the likely drop to "floor levels" at a rapid 50% loss
in value for a presently 40% overvalued Dollar.”
The erosion of the
greenback’s value was predicted by former Fed-chief Paul Volcker who said that
there is a “75% chance of a dollar crash in the next 5 years”.
Such a crash
would result in soaring interest rates, hyperinflation, skyrocketing energy
costs, massive unemployment and, perhaps, depression. This is the troubling
scenario if an Iran bourse gets established and knocks the dollar from its lofty
perch. And this is what makes the prospect of war, even nuclear war, so very
likely.
Peter’s continues: “With economies
so interdependent and interwoven, a global, not just American Depression would
occur with a domino effect throwing the rest of world economies into poverty.
Markets for acutely less expensive US exports would never materialize.
The result, some SME's estimate, might be as many as 200 million Americans out
of work and starving on the streets with nobody and nothing able to rescue or
aid them, contrary to the 1920/30 Great Depression through soup kitchens and
charitable support efforts.”
Liberal or conservative, the analysis is the same. If America does not address
the catastrophic potential of the Iran bourse, Americans can expect to face
dire circumstances.
Now we can understand why the corporate-friendly media has omitted any mention
of new oil exchange in their coverage. This is one secret that the boardroom
kingpins would rather keep to themselves. It’s easier to convince the public of
nuclear hobgoblins and Islamic fanatics than to justify fighting a war for the
anemic greenback. Never the less, it is the dollar we are defending in Iraq
and, presumably, in Iran as well in the very near future. (Saddam converted to
the euro in 2000. The bombing began in 2001)
There are peaceful
solutions to this dilemma, but not if the Bush administration insists on hiding
behind the moronic deception of terrorism or imaginary nuclear weapons
programs. Bush needs
to come clean with the American people about the real nature of the global
energy crisis and stop invoking Bin Laden and WMD to defend American
aggression. We need a comprehensive energy strategy, (including government
funding for conservation projects, alternative energy-sources, and the
development of a new line of “American-made” hybrid vehicles) candid
negotiations with Iran to regulate the amount of oil they will sell in euros
per year (easing away from the dollar in an orderly way) and a collective
“international” approach to energy consumption and distribution (under the
auspices of the UN General Assembly)
Greater parity among currencies should
be encouraged as a way of strengthening democracies and invigorating markets. It promises to breathe new life into free
trade by allowing other political models to flourish without fear of being
subsumed into the capitalist prototype. The current dominance of the greenback has created a
global empire that is largely dependent on debt, torture, and war to maintain
its supremacy.
Iran’s oil bourse poses the greatest challenge yet to the dollar-monopoly and
its proponents at the Federal Reserve. If the Bush administration goes ahead
with a preemptive “nuclear” strike on alleged weapons sites, allies will be
further alienated and others will be forced to respond. As Dr. Petrov says, “Major dollar-holding countries may decide to quietly
retaliate by dumping their own mountains of dollars, thus preventing the U.S.
from further financing its militant ambitions.”
There is increasing likelihood that the foremost champions of the present
system will be the very one’s to bring about its downfall.
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http://www.informationclearinghouse.info/article11654.htm
