Poverty
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WOULD IRAN'S OIL PLAN TO KILL THE U.S. DOLLAR START ANOTHER WAR IN THE REGION?
On the 20th of this month, Iran will commit a far greater "offense" than what the toppled Iraqi leader Saddam Hussein did in the fall of 2002 when he announced shifting Iraqs oil exports to the euro.
Numerous analyst and U.S. officials have repeatedly stated that the Pentagon has prepared plans for a military strike against Iran, partially to force Iran scrap its nuclear activities and partially due to Irans decision to shift to the Euro which will have a devastating impact on the U.S. currencys hegemony and the once strong economy.
Irans plan is to begin competing with New York's NYMEX and London's IPE with respect to international oil trades - using a euro-denominated international oil-trading mechanism. Which will, if the U.S. failed to scruple this plan, allow the euro establish a firm foothold in the international oil trade. And bearing in minds the U.S. debt levels, Iran's upcoming euro-based oil Bourse will be an obvious encroachment on U.S. dollar supremacy in global oil market
So in less than three weeks, well see many countries buying and selling oil and gas not only for dollars but also for euros.
The new oil bourse, which will establish a new oil marker (oil pricing standard) based on Iranian crude, in open rivalry to the existing West Texas Intermediate, Norway Brent and UAE Dubai markers, all calculated in U.S. dollars, will provide a golden opportunity to countries and companies concerned about having to hold huge amounts of U.S. dollars to finance their oil transactions, stated an editorial on Arab News.
Worried about the huge deficits its economy already suffers, the U.S. knows, and is deeply alarmed by the danger Irans new oil bourse means, as it might result in the dollar losing its status as the worlds only reserve currency.
So to prevent the Euro from emerging as an alternative reserve currency, the U.S. government is determined to stop the Iranian experiment.
But some of the U.S. scenario-mongers would resort to a preemptive strike against Iran before it even opens the bourse, the Arab News editorial further states, adding that an alternative scenario could be pushing Israel do the dirty work of for Washington, launching a devastating air strike targeting the Islamic republics nuclear sites, recalling what happened with the former Iraqi leader.
A similar initiative taken by Saddam Hussein in 2002 resulted in the quagmire still going in Iraq up till this day, the March 2003 war, although, as analysts stated, no solid evidence had ever linked Husseins demand to be paid in euros for Iraqs oil with the U.S. invasion of Iraq.
However, some analysts suggest that the Bush administration might not be planning to attack Iran to stop it from establishing its euro-based oil bourse which stands as a real challenge to the dollar, arguing that the current U.S. government doesnt worry much about such things.
But in case Washington attacks Iran, whether directly or by having Israel doing it, Iran is definitely ready for a heavy retaliation.
Iran has promised a crushing response to any U.S. or Israeli attack. Ironically, Iran doesnt have the nuclear weapons to scare off attackers, but it does have other options, with ground forces estimated at 800,000 personnel, as well as long-range missiles capable of hitting Israel and Europe.
Also much of the worlds oil supply is transported through the Strait of Hormuz, a narrow stretch of ocean which Iran borders to the north.
Moreover, attacking Iran will plant the seeds of tension in the already troubled Middle East nation, especially provoking the Shia Community in Iraq.
Source AlJazeera
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In simple words:
The reason the U.S. dollar is threatened is because high demand for the U.S. dollar and Treasury Bills exist because foreigners need dollars to purchase resources in the primary markets for commodities, specifically oil. Because the U.S. and England, its subsidiary/sponsor, have controlled the major markets and denominated them in dollars, large numbers of dollars have been required to purchase oil and other commodities.
If Iran establishes a successful foreign exchange system in euros, dollars will no longer be needed for international oil and presumably later commodities purchases, because these purchases could now be made in euros. These dollars would be repatriated into the U.S. economy causing massive inflation.
The Chinese and Japanese who have kept high dollar reserves and intervened in the free market for their own currencies in order to support the dollar system would likely watch their exports market dry up or face unimaginable levels of currency intervention to save the trade system they have erected. In any case, they would be unable to create enough yuan and yen to do so without going bankrupt themselves. At some point they will have to give up their heroic efforts to save their American trade empire. World could be facing a disastrous total global economic failure.
Americans will face massive hyperinflation, total economic collapse lead by housing and the stock market, which have been largely supported by inflows of these foreign dollars back into our banking system, allowing for the creation of the massive number of loans because of increased dollar reserves. Unemployment will skyrocket, and poverty will become endemic within a few years of the collapse due to foreclosures and layoffs.
To save their political futures, the Republican leadership and Neocons will possibly try to start a war with Iran if they can and seize their oil assets and destroy the idea of this market. If they don't, their political futures are nill. If they do, their political future is very likely also nil. In any case, the oil wars are about to begin in earnest it seems or perhaps some last minute negotiations can stave off disaster.
It is clear that we are in a very precarious situation at best, and the best diplomacy would be to negotiate with Iran, though they appear to be non negotiable about WMD or oil bourses. If no negotiations can succeed, it would appear that the given the current administration and the current political situation in Washington, combined with Wall Street and the vast oil industrial government machine complex, that war is unavoidable unless the people decide to change their way of life.
Source: Blogcritics
PS:
Venezuela is supporting Iran's plans
Now Iran and Venezuela have joined together to gain independence from the U.S. Dollar. Venezuela's president Chavez supports the opening of the Iran Oil Bourse on March 20, 2006. The Iran Oil Bourse will challenge U.S. dollar supremacy in global oil market transactions executed on the New York Mercantile Exchange and London's International Petroleum Exchange by creating the opportunity for countries to shift foreign-exchange holdings out of dollars and into euros or other currencies.
Iran And Venezuela are world's 4th and 5th biggest net oil exporting countries.
Lifted off another site. Discuss!
