Why the Dollar Bubble Is About to Burst
The Iranian Oil Bourse
June 15, 2006
Steve
Masterson
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Beloveds, when the BEAST is cornered it becomes very
dangerous and unpredictable.
The writings on the wall for everyone to see indicate that the CABAL's Corp.
U.S. "BEAST" has been cornered, i.e., caught in its own "greed-net", and that
will fight for its life pretty soon.
The evolution of these planetary events is not only watched by the whole
world but is also carefully monitored from the on Highs.
Taken from:
http://www.indymedia.org.uk/en/2006/06/342746.html . Published in this
website on June 25, 2006.
The Voice
(issue 264 - 11th May, 2006) ran an article beginning,
"Iran
has really gone and done it now. No, they haven't sent their first nuclear sub
in to the
Persian
Gulf.
They are about to launch something much more deadly -- next week the Iran Bourse
will open to trade oil, not in dollars but in euros." This apparently
insignificant event has consequences far greater for the
US
people, indeed all for us all, than is imaginable.
Currently
almost all oil buying and selling is in US-dollars through exchanges in
London
and
New York.
It is not accidental they are both US-owned.
The Wall
Street crash in 1929 sparked off global depression and World War II. During that
war the
US
supplied provisions and munitions to all its allies, refusing currency and
demanding gold payments in exchange.
By 1945, 80%
of the world's gold was sitting in US vaults. The dollar became the one
undisputed global reserve currency -- it was treated world-wide as `safer than
gold'. The Bretton Woods agreement was established.
The
US
took full advantage over the next decades and printed dollars like there was no
tomorrow. The US exported many mountains of dollars, paying for ever-increasing
amounts of commodities, tax cuts for the rich, many wars abroad, me rcenaries,
spies and politicians the world over. You see, this did not affect inflation at
home! The
US
got it all for free! Well, maybe for a forest or two.
Over
subsequent decades the world's vaults bulged at the seams and more and more
vaults were built, just for US dollars. Each year, the
US
spends many more dollars abroad that at home. Analysts pretty much agree that
outside the
US,
of the savings, or reserves, of all other countries, in gold and all currencies
-- that a massive 66% of this total wealth is in US dollars!
In 1971
several countries simultaneously tried to sell a small portion of their dollars
to the
US
for gold. Krassimir Petrov, (Ph. D. in Economics at
Ohio
University)
recently wrote, "The US Government defaulted on its payment on
August 15,
1971.
While popular spin told the story of `severing the link between the dollar and
gold', in reality the denial to pay back in gold was an act of bankruptcy by the
US Government." (1) The 1945 Bretton Woods agreement was unilaterally smashed.
The dollar
and
US
economy were on a precipice resembling
Germany
in 1929. The
US
now had to find a way for the rest of the world to believe and have faith in the
paper dollar. The solution was in oil, in the petrodollar. The
US
viciously bullied first
Saudi Arabia
and then OPEC to sell oil for dollars only -- it worked, the dollar was saved.
Now countries had to keep dollars to buy much needed oil. And the
US
could buy oil all over the world, free of charge. What a Houdini for the
US!
Oil replaced gold as the new foundation to stop the paper dollar sinking.
Since 1971,
the
US
printed even more mountains of dollars to spend abroad. The trade deficit grew
and grew. The
US
sucked-in much of the world's products for next to nothing. More vaults were
built.
Expert
Cóilínn Nunan wrote in 2003, "The dollar is the de facto world reserve currency:
the
US
currency accounts for approximately two thirds of all official exchange
reserves. More than four-fifths of all foreign exchange transactions and half of
all world exports are denominated in dollars. In addition, all IMF loans are
denominated in dollars." (2)
Dr. Bulent
Gukay of
Keele
University
recently wrote, "This system of the US dollar acting as global reserve currency
in oil trade keeps the demand for the dollar `artificially' high. This enables
the
US
to carry out printing dollars at the price of next to nothing to fund increased
military spending and consumer spending on imports. There is no theoretical
limit to the amount of dollars that can be printed. As long as the
US
has no serious challengers, and the other states have confidence in the US
dollar, the system functions." (3)
Until
recently, the US-dollar has been safe. However, since 1990 western Europe has
been busy growing, swallowing up central and eastern Europe. French and German
bosses were jealous of the
US
ability to buy goods and people the world over for nothing. They wanted a slice
of the free cake too. Further, they now had the power and established the euro
in late 1999 against massive US-inspired opposition across
Europe,
especially from
Britain
- paid for in dollars of course. But the euro succeeded.
Only months
after the euro-launch, Saddam's
Iraq
announced it was switching from selling oil in dollars only, to euros only --
breaking the OPEC agreement.
Iran,
Russia,
Venezuela,
Libya,
all began talking openly of switching too -- were the floodgates about to be
opened?
Then
airplanes flew into the twin-towers in September 2001. Was this another Houdini
chance to save the US (petro) dollar and the biggest financial/economic crash in
history? War preparations began in the
US.
But first war-fever had to be created -- and truth was the first casualty. Other
oil producing countries watched-on. In 2000
Iraq
began selling oil in euros. In 2002,
Iraq
changed all their petro-dollars in their vaults into euros. A few months later,
the
US
began their invasion of
Iraq.
The whole
world was watching: very few aware that the
US
was engaging in the first oil currency, or petrodollar war. After the invasion
of
Iraq
in March 2003, remember, the
US
secured oil areas first. Their first sales in August were, of course, in
dollars, again. The only government building in
Baghdad
not bombed was the Oil Ministry! It does not matter how many people are murdered
-- for the
US,
the petrodollar must be saved as the only way to buy and sell oil -- otherwise
the
US
economy will crash, and much more besides.
In early
2003, Hugo Chavez, President of Venezuela, talked openly of selling half of its
oil in euros (the other half is bought by the
US).
On
12 April
2003,
the US-supported business leaders and some generals in
Venezuela
kidnapped Chavez and attempted a coup. The masses rose against this and the Army
followed suit. The coup failed. This was bad for the
US.
In November
2000 the euro/dollar was at $0.82 dollars, its lowest ever, and still diving,
but when
Iraq
started selling oil in euros, the euro dive was halted. In April 2002 senior
OPEC reps talked about trading in euros and the euro shot up. In June 2003 the
US
occupiers of
Iraq
switched trading back to dollars and the euro fell against the dollar again. In
August 2003
Iran
starts to sell oil in euros to some European countries and the euro rises
sharply. In the winter of 2003-4 Russian and OPEC politicians talked seriously
of switching oil/gas sales to the euro and the euro rose. In February 2004 OPEC
met and made no decision to turn to the euro -- and yes, the euro fell against
the dollar. In June 2004
Iran
announced it would build an oil bourse to rival
London
and
New York,
and again, the euro rose. The euro stands at $1.27 and has been climbing of
late. See the European Central Bank history of the euro/dollar:
http://www.ecb.int/stats/exchange/eurofxref/html/eurofxref-graph-usd.en.html#1999
But matters
this month became far, far worse for the US dollar. On 5th May
Iran
registered its own Oil Bourse, the IOB. Not only are they now selling oil in
euros from abroad -- they have established an actual Oil Bourse, a global
trading centre for all countries to buy and sell their oil!
In Chavez's
recent visit to
London
he talked openly about supporting the Iranian Oil Bourse, and selling oil in
euros. When asked in
London
about the new arms embargo imposed by the
US
against
Venezuela,
Chavez prophetically dismissed the
US
as "a paper tiger".
Currently,
almost all the world's oil is sold on either the NYMEX, New York Mercantile
Exchange, or the IPE,
London's
International Petroleum Exchange. Both are owned by US citizens and both sell
and buy only in US dollars. The success of the Iran Oil Bourse makes sense to
Europe,
which buys 70% of
Iran's
oil. It makes sense for
Russia,
which sells 66% of its oil to
Europe.
But worse for the
US,
China
and
India
have already stated they are very interested in the new Iranian Oil Bourse.
If there is
a tactical-nuclear strike on - deja-vu - `weapons of mass destruction'
in
Iran,
who would bet against a certain Oil Exchange and more being bombed too?
And worse
for Bush. It makes sense for
Europe,
China,
India
and
Japan
-- as well as all the other countries mentioned above -- to buy and sell oil in
euros. They will certainly have to stock-up on euros now, and they will sell
dollars to do so. The euro is far more stable than the debt-ridden dollar. The
IMF has recently highlighted US economic difficulties and the trade deficit
strangling the
US
-- there is no way out.
The problem
for so many countries now is, how to get rid of their vaults full of dollars,
before it crashes? And the
US
has bullied so many countries for so many decades around the world, that many
will see a chance to kick the bully back. The
US
cannot accept even 5% of the world's dollars -- it would crash the
US
economy dragging much of the world with it, especially
Britain.
To survive,
as the Scottish Socialist Voice article stated, "the
US,
needs to generate a trade surplus to get out of this one. Problem is it can't."
This is spot on. To do that they must force US workers into near slavery, to get
paid less than Chinese or Indian workers. We all know that this will not happen.
What will
happen in the
US?
Chaos for sure. Maybe a workers’ revolution, but looking at the situation as it
is now, it is more likely to be a re-run of
Germany
post-1929, and some form of extreme-right mass movement will emerge.
Does
Europe
and China/Asia have the economic independence and strength to stop the whole
world's economies collapsing with the
US?
Their vaults are full to the brim with dollars.
The
US
has to find a way to pay for its dollar-imperialist exploitation of the world
since 1945. Somehow, eventually, it has to account for every dollar in every
vault in the world.
Bombing
Iran
could backfire tremendously. It would bring
Iran
openly into the war in
Iraq,
behind the Shiite majority. The
US
cannot cope even now with the much smaller Iraqi insurgency. Perhaps the
US
will feed into the Sunni v Shiite conflict and turn it into a wider Middle-East
civil-war. However, this is so dangerous for global oil supplies. Further, they
know that this would be temporary, as some country somewhere else, will
establish a euro-oil-exchange. Perhaps in
Brussels.
There is one
`solution' -- scrap the dollar and print a whole new currency for the
US.
This will destroy 66% of the rest of the world's savings/reserves in one swoop.
Imagine the implications? Such are the desperate things now swimming around
heads in the White House, Wall Street and Pentagon.
Another is
to do as
Germany
did, just before invading
Poland
in 1938. The Nazis filmed a mock Polish Army attack on
Germany,
to win hearts and minds at home. But again, this is a finger in the dam. So, how
is the
US
going to escape this time? The only global arena of total superiority left is
military. Who knows what horrors lie ahead. A new world war is one tool by which
the
US
could discipline its `allies' into keeping the dollar in their vaults.
The task of
socialists today is to explain to as many as possible, especially our class,
that the coming crisis belongs purely to capitalism and (dollar) imperialism.
Not [from] people of other cultures, not Islam, not the axis of evil or their
so-called WMDs. Their system alone is to blame.
The new
Iranian Oil Bourse, the IOB, is situated in a new building on the
free-trade-zone
island
of
Kish,
in the
Persian Gulf.
Its computers and software are all set to go. The IOB was supposed to be up and
running last March, but many pressures forced a postponement. Where the pressure
came from is obvious. It was internationally registered on 5th May and supposed
to open mid-May, but its opening was put off, some saying the oil-mafia was
involved, along with much international pressure. Just Google '
pertroeuro', and the story lies before you.
From now on,
anyone in the know will wake up every morning and, even before coffee, will
check out the latest exchange rate between the euro and dollar.
/////////////////////////////////////////////////////////////////
(1) The Proposed Iranian Oil Bourse (Krassimir Petrov, Jan 2006) http://www.countercurrents.org/us-petrov200106.htm
(2) Oil, Currency and the War on
Iraq
(Cóilínn
Nunan,
Scotland,
Dec 2003) http://www.feasta.org/documents/papers/oil1.htm
(3) Petrodollar Became the Essential Basis for the US Economic Hegemoney in the
1970s. (Bulent Gokay,
Keele
University,
May 2006) http://english.pravda.ru/topic/petrodollar-138/
