by Krassimir Petrov, Ph.D. Austrian Macro Economist/Investment Strategist
This article is dated 16 Jan and discusses the impact of the bourse on dollar hegemony. I have long believed that the underlying rationale for invading Iraq had more to do with protecting the dollar rather than simply controlling the bulk of the world's remaining oil supply as such. Maintaining control of oil is intimately related to maintaining dollar hegemony in any case; makes sure oil is denominated in dollars and anyone who tries to do it differently gets into the US's bad books, just as Saddam did. The proposed bourse creates an identical scenario to the one which precipated the invasion of Iraq...the dollar is under threat as the world's
de facto reserve currency. If that assumption is correct the real reasons for the rhetoric over Iran become very clear. The dollar is under threat and if it plunges...think about what that means for you.
I read two papers on Mike Ruppert's web site (subscribers only for full version - summary available free) in which the possibility of an attack on Iran by the US is discussed; the articles suggest it is very unlikely. I had previously thought an attack was likely and have posted to that effect. Seems that people who know about the real issues think otherwise. In effect, the US is up shit creek if it invades Iran due to the interests of other oil consuming nations.
Now consider the implications to the US of a world where the dollar is no longer the
de facto reserve currency...this paper discusses the possible effects.
The underlying reason for invading Iraq...
<snip1>
Many have criticized Bush for staging the war in Iraq in order to seize Iraqi oil fields. However, those critics can’t explain why Bush would need to seize those fields—he could simply print dollars for nothing and use them to get all the oil in the world that he needs.
He must have had some other reason to invade Iraq.
History teaches that an empire goes to war for one of two reasons: (1) to defend itself or (2) benefit from war. Economically speaking, in order for an empire to initiate and conduct a war, its benefits must outweigh its military and social costs. Benefits from Iraqi oil fields are hardly worth the long-term, multi-year military cost.
Bush went into Iraq to defend the American Empire. Indeed, this is the case: two months after the United States invaded Iraq, the Oil for Food Program was ended, the country’s accounts were switched back to dollars, and oil began to be sold once again only for U.S. dollars. No longer could the world buy oil from Iraq with Euro. Global dollar supremacy was once again restored. Bush descended from a fighter jet and declared himself the victor: the mission was indeed accomplished—Bush successfully defended the U.S. dollar, and thus the American Empire.
</snip1>
Possible explanation for the UK's ambivalence over the euro...
<snip2>
Only the British will find themselves between a rock and a hard place. They have had a strategic partnership with the U.S. forever, but have also had their natural pull from Europe. So far, they have had many reasons to stick with the winner. However, when they see their century-old partner falling, will they firmly stand behind him or will they deliver the coup de grace? Still, we should not forget that currently the two leading oil exchanges are the New York’s NYMEX and the London’s International Petroleum Exchange (IPE), even though both of them are effectively owned by Americans. It seems more likely that the British will have to go down with the sinking ship, for otherwise they will be shooting themselves in the foot by hurting their own London IPE interests.
It is here noteworthy that for all the rhetoric about the reasons for the surviving British Pound, the British most likely did not adopt the Euro namely because the Americans must have pressured them not to: otherwise the London IPE would have had to switch to Euros, thus mortally wounding the dollar and their strategic partner.
</snip2>
http://64.233.179.104/search?q=cache:hXiebIy6ck8J:eldoradogold.net/pdf/January%25202006/proposed_iranian_oil_bourse_011706.pdf+bourse+%22Le+Metropole+Cafe%22&hl=en&gl=uk&ct=clnk&cd=4BTW there is more analysis of this article, and related commentary, to be found by Googling for bourse+"Le Metropole Cafe".