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"Fiscal Madness" And Why Iraq Was Invaded

From: Dick McManus |

rkets have become hostage "to the willingness of foreign investors and lenders to finance its spending excesses." The new national debt limit is $7.38 trillion.

In the year of the Bush coup in Florida, Europeans invested over $600 billion in the USA. Today, European purchases of U.S. businesses have plummeted to just $7 billion. [The Looming Dollar Disaster].

Since countries must acquire dollars to buy the fuel that runs their economies – and since only the U.S. can print dollars – Washington has retained an unearned lock on global trade. Today, fully two-thirds of world commerce is dollar-denominated. Recycling some $2 trillion in "petrodollars" has enabled a war-obsessed United States to run perpetual trade deficits. [The Observer 2/23/03]

But now just about everyone is ditching the diving dollar.

WHY IRAQ WAS INVADED

Washington laughed when Saddam took the world's second biggest oilfields off the dollar standard and began demanding payment in euros in Oct. 2000. The seemingly dimbulb dictator also converted his $10 billion UN reserve funds to euros – just as that fledgling currency hit an historic low of 82 cents.

The laughter stopped abruptly when the euro's value crouched, then leaped 30%.

According to Aussie analyst Geoffrey Heard, the second brutal war against Iraq was intended to return Iraq's oil reserves to the dollar, intimidate other oil producers considering passing on the buck, and sabotage other potential Middle East players.

Explained Michel Chossudovsky from the Centre for Research on Globalization last March: "The war is not only being carried out with a view to taking over Iraq's oil reserves. It is intended to cancel the contracts of rival Russian and European oil companies, as well as exclude France, Russia and China" from a Middle East-Central Asian region containing more than 70% of the world's reserves of oil and natural gas.

A $40 billion Iraq-Russia contract to hunt oil in Iraq's western desert is now scrap paper. Ditto the rights of the French oil company TotalFinaElf rights to develop the huge Majnoon field, near the Iranian border, which may contain up to 30 billion barrels of greenhouse-goosing carbon. [Washington Post 9/15/02]

Awash in 50 billion petrodollars, Russia's parliamentary duma has discussed adopting the euro for oil sales to its main trading partners in Europe. The Bank of China, another major European trader, and Russia's Central Bank are also set to sell dollars for the euro, which has supplanted the dollar as the global "currency of refuge" after the invasion of a shattered country that had nothing to do with 911 or al Qaeda derailed the dollar and sparked al Qaeda retaliation worldwide. [AP 1/24/03]

Last year the former American Ambassador to Saudi Arabia reminded Congress, "One of the major things the Saudis have historically done, in part out of friendship with the United States, is to insist that oil continues to be priced in dollars. I wonder whether there will not again be, as there have been in the past, people in Saudi Arabia who raise the question of why they should be so kind to the United States."

The instant OPEC embraces the euro, the dollar will lose up to 40% of its value, investors will jump from Wall Street windows, U.S. money markets will collapse, and the entire dollar-dependent world will undergo economic convulsions at the same time.

Seeking profits, security and a chance to retaliate against Bush's "axis of evil" rhetoric, Tehran last year shifted most of its central bank reserves to euros. The move to euros as Iran's oil standard is imminent.

North Korea. Last December, in response to Bush's cruel mid-winter oil embargo, that nervously nuclear "Axis of Evil" dropped the dollar and began using euros for all foreign exchange.

Venezuela. In another tectonic shift away from the blood-soaked greenback, 13 developing countries are following Caracas' lead and bartering services and commodities directly with each other in computerized swaps.

The biggest Asian central banks are holding most of the planet's dollar reserves. They were considering decreasing their Treasury holdings – before the U.S. attack on Iraq accelerated that trend. As Chossudovsky comments, Japan, which imports over 80% of its oil from the Middle East, must consider converting many of its dollar assets to euros. With gigantic consequences for the bankrupt Superpower it largely subsidizes.

WILL THE USA AND EUROPE SWITCH ROLES?

Commanding nearly half of world trade, the European Union represents a growing challenge to continued U.S. dominance of a world that lies almost entirely beyond its borders.

At a financial summit in Spain in April 2002, the head of OPEC's Petroleum Market Analysis Department, Javad Yarjani, wondered if "the euro will establish itself in world financial markets, thus challenging the supremacy of the U.S. dollar, and consequently trigger a change in the dollar's dominance in oil markets."

By the late '90s, Yarjani reminded his listeners, "more than four-fifths of all foreign exchange transactions, and half of all world exports, were denominated in dollars. In addition, the US currency accounts for about two thirds of all official exchange reserves."

Next year, 450 million oil-burning European consumers will enjoy combined wealth of $9.6 trillion – versus 280 million Americans and their heavily indentured $10.5 trillion economy.

Europe is the world's biggest oil importer. Its factories export nearly half of all Middle East imports. Add this up, subtract the dollar's declining value, and it makes real "cents" for European manufacturers, oil companies, and OPEC to trade in euros.

OPEC's switch to the euro will happen. The big question is when? With Britain, Norway, Denmark and Sweden set to join a single euro currency as soon as next autumn, Yarjani believes "this might create a momentum to shift the oil pricing system to euros." [Speech on The International Role of the Euro 4/14/2002, Oviedo, Spain]

Anyone alert to omens and portents will notice that over the past two months the dollar has fallen nearly 10% against the euro.

Chossudovsky states, "without lots of eager foreigners prepared to mop them up (buy US dollars), a serious inflation would result which, in turn, would make foreigners even more reluctant to hold the U.S. currency and thus heighten the crisis."

As the world's biggest oil importer, the U.S. will have to run a trade surplus to acquire euro-backed oil.

With the oil production peaks passed, and the era of cheap oil ending sometime this decade, European oil addicts are slashing their energy consumption and turning to wind power and hydrogen. America's ability to compete or cooperate with sustainable energy sources is being squandered. The US's permanent war economy is turning the American dream into a nightmare of ruined cities and national insolvency.

MOVING TO GOLD

Malaysia will start replacing U.S. currency with the new Islamic gold dinar. Bahrain, Libya, Morocco and Iran may soon follow, using gold-backed Muslim money to strengthen ties among Islamic nations and "end American hegemony". [IslamOnline 1/8/03]

Several countries are now using some 100,000 Islamic gold dinars and 250,000 silver dirhams in place of the U.S. dollar. If the 1.3 billion citizens of Islamic countries opt for gold dinars and e-dinars in inter-Islamic trade, and euros for oil and imports, greenbacks will become slightly less valuable than Kleenex. And the world's most debt-ridden nation will implode as suddenly and dramatically as Indonesia, Argentina, or the ex-Soviet Union.

(excerpted from the Source: THE BUCKS STOP HERE by William Thomas May 26, 2003,

http://www3.bc.sympatico.ca/Willthomas/homepage.html

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