Re. Iranian Oil Bourse

From an economic standpoint, the American empire was born in 1943 when the U.S. dollar was made convertible to gold only to foreign governments. This established the dollar as the reserve currency of the world. At that time, the dollar was not fully backed by gold.

In World War II, the U.S. supplied its allies with provisions and demanded gold in payment, thus accumulating a large portion of the world's gold. A conference in 1944 at Bretton Woods NH between the U.S., Canada, and Britain created a system of international financial rules and led to establishment of the World Bank.

In the early 1960's, the dollar supply was increased to finance the Vietnam war and LBJ's Great Society. This gave U.S. dollars to foreign nations without the prospect of buying them back at the same value. Persistent U.S. trade deficits resulted in foreign nations holding increased amounts of dollars, which was tantamount to a tax on U.S. citizens -- or inflation.

About 1970, foreign countries began demanding gold for their dollars from the U.S. On August 15, 1971, the U.S. defaulted on its payments. Reports given to the public said this was to sever the link between gold and the dollar. In reality, this was an act of bankruptcy by the U.S. government. In essence, the U.S. declared itself an empire.

America had extracted enormous amounts of goods from the rest of the world with no intention or ability to return those goods in kind, and the world was powerless to do much about it. From that point on, the American empire sustained itself by forcing the world to continue to accept depreciating dollars in exchange for goods, and it had to give the world an economic reason to hold those dollars. The reason was OIL.

It was becoming clear that the U.S. could not buy back its dollars in gold. About 1973, the U.S. made an iron-clad agreement with Saudi Arabia that it would support the House of Saudi in exchange for that country accepting only dollars for its oil and persuading OPEC to follow suit. Even though dollars could no longer be exchanged for gold, they were now exchangable for oil.

The world needed ever-increasing quantities of oil at ever-increasing prices. This meant the demand for dollars could only increase. The dollar was now backed by oil in place of gold, and foreign countries had to accumulate an increasing amount of dollars.

As long as dollars were the only acceptable payment for oil, the American empire was able to continue to tax the rest of the world and dominate it. If the dollar ever lost its oil backing, the American empire would cease to exist. It was necessary that oil reserves be spread around various sovereign states that were not strong enough, politically or militarily, to demand payment for oil in a commodity other than dollars. If one of them made that demand, that entity had to be convinced to change its mind by military or political pressure.

That happened in the year 2000. The entity was Saddam Hussein, who demanded Euro dollars in payment for his oil. His demand was met with ridicule and neglect. As it became clearer that he was serious, political pressure was exerted to change his mind. Iran and other countries began to demand payment in currency other than the dollar, notably the Euro and the Yen. The danger to the dollar dominance was very clear.

The punitive action for Iraq was to order U.S. troops to invade the country. This sent a message that anyone demanding payment for oil in currency other than dollars would be severely punished.

Two months later, the program of oil-for-food was terminated, and Iraq's Euro accounts were switched to dollars. Oil was once again sold only for dollars, and U.S. supremacy was restored. President Bush was photographed on a carrier descending from a fighter jet and declared that the U.S. had accomplished its mission. He had successfully defended the American empire.

On March 1, 2006, a major event happened when the Iranian Oil Bourse opened {bourse, n.- central point of business; a stock exchange}. This allows anyone to buy oil with their own currency on the exchange, circumventing the U.S. dollar. In economic terms, this represents a much greater threat to the dollar than Saddam.

Asians particularly welcome the new exchange. It will allow them to diversify with Euros and drastically lower their enormous dollar reserves, protecting them against the depreciating dollar. Russia has a strong economic interest in adopting the Euro. The Russians dislike holding the depreciating dollars and have revived their nationalism using gold. The bulk of Russian trade is with Europe, China, Japan, and oil-exporting countries. They will gladly embrace the Euro and watch the Americans bleed.

Arab oil-exporting countries will also eagerly adopt the Euro as a means of diversifying their holdings against the rising mountain of depreciating dollars. Like Russia, their trade is mostly with European countries. They prefer the European currency for its stability. It will also greatly facilitate their jihad against the Infidel Enemy, the United States.