← Autodidact Archive · Original Dissent · Ed Toner
Thread ID: 5974 | Posts: 3 | Started: 2003-04-04
2003-04-04 20:15 | User Profile
[url=http://www.praesentia.us/archives/2003_01.html#000227]http://www.praesentia.us/archives/2003_01.html#000227[/url]
Dollar vs. Euro - Hegemoney. The Federal Reserve's greatest nightmare is that OPEC will switch its international transactions from a dollar standard to a euro standard. Iraq actually made this switch in Nov. 2000 (when the euro was worth around 80 cents), and has actually made off like a bandit considering the dollar's steady depreciation against the euro.
The real reason the Bush administration wants a puppet government in Iraq - or more importantly, the reason why the corporate-military-industrial network conglomerate wants a puppet government in Iraq - is so that it will revert back to a dollar standard and stay that way." (While also hoping to veto any wider OPEC momentum for the switch from Iran - which is seriously considering switching to euros as their oil transaction currency as of Sept 2002 - and other OPEC members including Saudi Arabia whose regime appears increasingly weak/threatened from an internal coup).
This administration is acutely aware of this and in preparation for invading Iraq we will create a huge and permanent military presence in the Persian Gulf region, just in case we need to grab Saudi's oil fields as well as Iraq 's.
Saddam sealed his fate when he decided to switch to the euro in late 2000 (and later converted his $10 billion reserve fund at the U.N. to euros) - at that point, another manufactured Gulf War become inevitable under Bush II. Only the most extreme circumstances could possibly stop that now and I strongly doubt anything can - short of Saddam getting replaced with a pliant regime.
Big Picture Perspective: Everything else aside from the reserve currency and the Saudi/Iran oil issues (i.e. domestic political issues and international criticism) is peripheral and of marginal consequence to this administration. Further, the dollar-euro threat is powerful enough that they'll rather risk much of the economic backlash in the short-term to stave off the long-term dollar crash of an OPEC transaction standard change from dollars to euros. All of this fits into the broader Great Game that encompasses Russia, India, China.
The effect of an OPEC switch to the euro would be that oil-consuming nations would have to flush dollars out of their reserve funds and replace these with euros. The dollar would crash anywhere from 20-40% in value and the consequences would be those one could expect from any currency collapse and massive inflation (think Argentina currency crisis, for example). You'd have foreign funds stream out of the U.S. stock markets and dollar denominated assets, there'd surely be a run on the banks much like the 1930s, the current account deficit would become unserviceable, the budget deficit would go into default, and so on. Your basic 3rd world economic crisis scenario.
The United States economy is intimately tied to the dollar's role as reserve currency. This doesn't mean that the U.S. couldn't function otherwise, but that the transition would have to be gradual to avoid such dislocations (and the ultimate result of this would probably be the U.S. and the E.U. switching roles in the global economy).
The following two recent articles discuss Iran's vacillating position about switching to the euro as their standard currency for oil exports, and this may help explain Bush's sudden urgency to topple Saddam. In the aftermath of toppling Saddam it is clear the U.S. will keep a large and permanent U.S. military force in the Persian Gulf. Indeed, the Bush administration has no "exit strategy" in a post-Saddam Iraq, as a permanent U.S. military force will be needed to "maintain order" (ie. to protect the newly installed puppet regime).
Paradoxically, if the war in Iraq goes poorly or becomes prolonged, it is possible that Iran and other OPEC members may do exactly what Saddam did, thus creating the very situation this administration is trying to prevent, an OPEC switch to the euros as their oil transaction currency standard.
2003-04-04 20:36 | User Profile
The European stock markets have been absolutely [color=red]ON FIRE [/color]the last week. I've invested in the major indices of Germany, Belgium, the Netherlands and Switzerland. Even France is on a tear. The ecomomic monster that is a unified Europe is only in its infancy and is a major buy at this point in history. see here [url=http://finance.yahoo.com/m2?u]World Indices[/url]
2003-04-05 00:17 | User Profile
Actually.................... If the Islamic nations of the world could ever get their godamn act togather, they would introduce an Islamic Dollar backed by gold and their natural resources. They could then demand payment for all the products exported from their countries to be paid in this currency and say f*ck you to all other forms of payment.
I have suggested this to a few Arab countries but the leaders in charge have of course been bought off by American bribes and or intimidation and continue on the path of determined economical and social destruction.
America has proven that we can dominate any country leaders by showering them with untold riches or by unlimited cluster bombs....take your pick.