The Proposed Iranian Oil Bourse: Krassimir Petrov

[teryang]

Interesting thesis on the role of the dollar on international finance and how it influences our imperial foreign policy. It sounds like a gold bug article, but the author refers to gold as a barbaric relic. The primary value of the oceans of US currency abroad is in their uniform use to purchase energy. Iraq threatened that system and was toppled. If you accept the thesis, the march to war with Iran, may be unstoppable. Will alternative marketplaces and currencies have to be stopped by interminable crises and invasions? Whither the economy, hyperinflation or painful deflation and soaring interest rates?

The article is worthwhile reading for a coherent, if somewhat one dimensional view.



http://www.globalresearch.ca/index.php?context=viewArticle&code=PET20060120&articleId=1758

The Proposed Iranian Oil Bourse


by Dr. Krassimir Petrov

<A nation-state taxes its own citizens, while an empire taxes other nation-states. The history of empires, from Greek and Roman, to Ottoman and British, teaches that the economic foundation of every single empire is the taxation of other nations. The imperial ability to tax has always rested on a better and stronger economy, and as a consequence, a better and stronger military. One part of the subject taxes went to improve the living standards of the empire; the other part went to strengthen the military dominance necessary to enforce the collection of those taxes.

Historically, taxing the subject state has been in various forms-usually gold and silver, where those were considered money, but also slaves, soldiers, crops, cattle, or other agricultural and natural resources, whatever economic goods the empire demanded and the subject-state could deliver. Historically, imperial taxation has always been direct: the subject state handed over the economic goods directly to the empire.

For the first time in history, in the twentieth century, America was able to tax the world indirectly, through inflation. It did not enforce the direct payment of taxes like all of its predecessor empires did, but distributed instead its own fiat currency, the U.S. Dollar, to other nations in exchange for goods with the intended consequence of inflating and devaluing those dollars and paying back later each dollar with less economic goods-the difference capturing the U.S. imperial tax. Here is how this happened...>

[bemildred]

1. Nice piece.

I especially like that he gets the political attitude towards, and use of, currency inflation right. The only possible political solution to our debt situation - short of civil disorder and regime change - is inflation.

I disagree about gold, and I suspect that he overestimates the eagerness of the rest of the world for the collapse of the US economy, politicians are naturally conservative about change, most of them. Nevertheless, he is looking in the right direction, and I would bet that he has Bernanke dead on.

[teryang]

2. What is your view on gold?

I didn't understand what his attitude about gold really was.

I agree that the rest of world isn't eager for a collapse of our economy.

On edit:

Good to hear from you!

[bemildred]

3. Well, it's not a bad investment these days ...

:hi:

I am doubtful that it will emerge as the new currency, there just is not enough of it. For it to be adequate would require economic collapse of an order that would raise more fundamental questions, especially when considered in the context of the approaching ecological singularity.

[teryang]

4. Thanks

Gold is taking off. If the Iranian government were toppled somehow without war, the dollar would seem to subject only to gradual diminishment in value and importance. If they were to hold fast and succeed with their bourse idea, dollar decline might accelerate. If there is conflict with Iran, the decline will be faster. Gold is looking fairly promising. The Russian plan for enriching nuclear fuel for the Iranians looks like a reasonable path. If this author is right, that potential solution will be ignored.

I am obsessed with Canadian oil companies and energy.

Some conventional pundits predict collapse of energy prices. I am not convinced, yet. If the Iranian crisis is avoided I will get out for the correction.

[bemildred]

5. Energy might get touchy soon, I agree.

Although in the longer term it's as good as Four of a kind.

Canada is one of my bets, and likely to remain so.

I am doubtful that reason will prevail in the Middle East,
and history supports me in that.