FEATURES
 Defending the dollar
Writing in the
Sunday Times on March 30, Judge Richard Goldstone stated that there were
only two lawful ways in which the U.S. could use military force against
Iraq. One was if the UN Security Council sanctioned it; the other was in
the case of "dire self-defence". The U.S. war against Iraq is in dire
defence of dollar imperialism against the threat of the euro.
Put
another way, the war is about world economic dominance. That, according to
Australian analyst Geoffrey Heard, is the reason for the Bush
Administration's determination to oust Saddam Hussein's regime, because
his policy of selling oil in euros is threatening U.S. global hegemony.
The origin of Establishment America's problem with Iraq goes back
to 1999 when Iraq broke ranks among the oil producers and began to trade
its oil in euros instead of U.S. dollars. As Heard notes, under an Opec
agreement all oil has been traded in greenbacks since 1971. America's
monopoly of the oil business has premised the U.S. dollar's supremacy
among world currencies. Initially the U.S. scoffed at Iraq's move to the
euro but by 2001 disdain had turned to alarm. Iran indicated an interest
in changing to euros while Russia has been seeking to increase its oil
production aimed at European sales - in euros, of course. Venezuela, the
world's fourth largest producer, has been cutting out the dollar in its
dealings and bartering with various countries, including Cuba.
The
net result of these developments meant that the dollar's stranglehold on
oil was slipping and with it America's dominance of world trade. With Iraq
having the world's second largest oil reserves, the American
Establishment, which is sodden in oil investments, simply had to act
against Saddam - even if it meant going to war. The alternative was the
meltdown of the U.S. economy.
America was in serious trouble long
before the Al-Qaeda attacks of September 11, 2001. Its real threat came
not from the Middle East so much as from the EU with its new currency, the
euro. Commanding 40% of world trade, the EU poses a major challenge to
continued U.S. dominance. If only a few Opec members switched to euros,
argues Heard, that would hurt the U.S. in two critical ways: it would
result in a stronger euro and an increase in the "eurozone" and it would
trigger dollar dumping and depress the greenback's value.
With the
dollar facing bleak times, the only thing left for the Bush administration
as the proxy of Establishment America (Al Gore would have had to have done
the same) was to come out fighting. In one respect, Bush has been very
frank about the purpose of this war. He has said it is to protect the
American way of life. Indeed. And that means ensuring the reign of dollar
imperialism.
The war against Iraq is, therefore, a war both to
defend and to assert dollar dominance. Heard sees four objectives for the
U.S. in this war:
return Iraq's oil reserves to the dollar circle;
send a clear message to other oil producers as to what will happen to
them if they try to leave the dollar zone;
deal a setback to the EU and its euro;
use the war as a cover to get Venezuela's oil back into the dollar
circle by means of covert CIA action.
The cost of the war is not
measured in terms of the images shown on our television screens. In fact,
in Uncle Sam's view the cost of going to war is negligible compared to the
cost of not going to war. The possible loss of U.S. power and the end of
dollar imperialism, as far as Washington is concerned, far exceeds all
other considerations.
The final aspects of Heard's analysis provide
insight as to the positions of Australia and the UK. Having significant
U.S. dollar reserves and strong trade links with the U.S., it is in
Australia's interests to support the U.S. and to see to it that the
ascendancy of the euro is checked. Britain, which has yet to adopt the
euro as its currency, stands to gain time and room to manoeuvre by siding
with the U.S. A U.S. victory would also, in effect, give the EU
principals, France and Germany, bloody noses and place the UK in a
position either to demand a better deal from the EU for adopting the euro
or to distance itself from Europe and to align with America. A weakened
and divided EU is a U.S. policy strategy.
Whose side should South
Africa be on? It's really a case of Hobson's choice. When the U.S. economy
went concave in 1929, the whole world was sucked in to its depression.
Only the mad mullahs would want a repetition of that. Which is why the
anti-U.S. rhetoric of the ANC government, compounded by Nelson Mandela's
virulent anti-Bush remarks, is shortsighted. It would have been far better
to have adopted a neutral stance, particularly since an election is due in
a year's time. In 1999 the ANC's election expenses enjoyed considerable
American and Middle Eastern funding. Given the physical and political
costs of the war, the chances of a repeat of such funding in 2004 must
range from uncertain to unlikely. Nonetheless, the aftershocks of the war
on Iraq may cost the ANC dearly.
Duncan du Bois is a DA Durban Metro ward councillor. He writes in his
personal capacity.
Publish Date: 4 April
2003
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