The Petrodollar

There are many who think that the geographic state of the United States attacked Iraq because Saddam Hussein's real weapon of mass destruction was his move to accepting Euros instead of Dollars for his oil payments.

It is odd that the single most traded commodity on earth is traded only in dollars.

Such a policy provides unique benefits to the country that can maintain such hegemony. And, a move away from the dollar in oil markets would have serious implications on the value of the dollar.

Now Iran is setting up its own Bourse to trade oil.

Note this article in the Guardian.

William Clark, in an article published by the Centre for Research on Globalisation notes:

"In 2005-2006 the Tehran government has a developed plan to begin competing with the New York Mercantile Exchange (NYMEX) and London's International Petroleum Exchange (IPE) with respect to international oil trades — using a euro-denominated international trading mechanism". (It should be noted that both the IPE and NYMEX are owned by US corporations).

The oil and gas trade is the biggest market in the world and the establishment of an Iranian oil and gas trading centre "means that without some form of US intervention, the euro is going to establish a firm foothold in the international oil trade."

It is now obvious that the invasion of Iraq had less to do with any threat from Saddam's long-gone weapons of mass destruction program and certainly less to do with fighting international terrorism than it has to do with gaining control over Iraq's hydrocarbon reserves and, in doing so, maintaining the US dollar as the monopoly currency for the critical international oil market", writes Clark.

In speculating on what the US leadership might do in the situation, Clark writes:

"Pentagon sources confirm the Bush administration could undertake a desperate military strategy to thwart Iran's nuclear ambitions while simultaneously attempting to prevent the Iranian oil Bourse from initiating a euro-based system for oil trades. The latter would require forced 'regime change' and the US occupation of Iran ... Objectively speaking, the post-war debacle in Iraq has clearly shows that such Imperial policies will be a catastrophic failure.

"Unlike Iraq, Iran has a robust military capability. A repeat of any 'shock and awe' tactics is not advisable given that Iran has installed sophisticated anti-ship missiles on the Island of Abu Musa and therefore controls the critical Strait of Hormuz. In the case of a US attack, a shut down of the Strait of Hormuz — where all of the Persian Gulf bound oil tankers must pass — could easily trigger a market panic with oil prices skyrocketing to $100 per barrel or more."

There are some people in Washington

Who think the US can win this war,

just like we did 60 years ago.

But 60 years ago, it was the other guy

who was telling his people that they were not safe,

and that they needed to defend themselves

by attacking.

I'm still hoping that the President will Speak.

And lay down the Sword.

And become a Hero.



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