Wow!! A lengthy but most informative article by William Clark

http://www.ratical.org/ratville/CAH/RRiraqWar.html#p4

You will want to print this and keep it to read over and over again. Maybe even mail a few copies to some fence sitters.

?? Wesley?? It is Wm Clark. I read it.

"Why of course the people don't want war. . . . That is understood. But, after all, it is the leaders of the country who determine the policy, and it's always a simple matter to drag the people along whether it's a democracy, a fascist dictatorship, a parliament or a communist dictatorship . . . the people can always be brought to the bidding of the leaders. . . . All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism, and exposing the country to greater danger.


--Hermann Goering, Nazi Reichsmarshal and Luftwaffe chief
at Nuremberg trials, 1945

He went by the handle of GoreN4

...ummm...I may not post very much these days, but I am not quite a "former DU'er"....but what happens after my book gets published could be interesting...(see below post for my latest diatribe ;-)

Good to see you are still here. :)

and it would be devastating if OPEC in its entirety switched currency. Reason for going to war??

WMDs was used because they knew the stupid public could be firghtened into supporting the invasion for this reason and no other.

Please take the time to read it.:bounce:

...and for those who are not ready for the full 50-page essay, below is a "shorter" version of the same info, along with the description of mu upcoming book. Sometimes I use an analogy from the 'Matrix' movie to explain this complex situation to others, as my research is certainly not "light" reading. Indeed, many people wish to remain in in the ignorant blue-pill world...but for better or worse, I have met some Morpheus type individuals...so here goes for those who wonder *how* and *why* we arrived at this deplorable point in US history...(from the movie)..

"Trinity arranges for Neo to finally meet Morpheus face to face. Morpheus gives Neo a choice between a red pill and blue pill. “Take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in Wonderland, and I show you how deep the rabbit hole goes"....As Neo is about to take the red pill, Morpheus pulls back his hand slightly and warns: "Remember, all I'm offering is the truth, nothing more...” Of course, Neo chooses the red pill and he is brought into the dizzying, dingy vortex of the real world....

So, what follows is the red pill reality of US geostrategy and the macroeconomics of the 2003 Iraq war, and the reasons why 800 US soldiers are now dead, as well as approx 11,000+ Iraqis..."Buckle your seat belt Dorothy, because Kansas is going bye-bye"....

###

'Petrodollar Warfare:
Macroeconomics and Geostrategy behind the Iraq War'

March 20, 2004
By William Clark

"If a nation expects to be ignorant and free, it expects what never was and never will be . . . The People cannot be safe without information. When the press is free, and every man is able to read, all is safe."

Thomas Jefferson’s words embody the unfortunate state of affairs overshadowing America today. It is a disturbing fact the US-led war against Iraq appears to have been waged under fraudulent premises. It is now obvious that Saddam did not possess an imminent or viable threat to the US, but like his illusionary ties to Al Qaeda and 9/11, the Bush administration did not let such facts get in their way. So, why did the US invade Iraq? Simple: Empire - the desire to maintain US economic hegemony.

One year ago the Iraq war began, and there is now much evidence to suggest the war was designed to accomplish three primary US geostrategic objectives. Perhaps one of the original factors driving this administration to war was long-standing US geostrategy to develop several permanent US military bases in the Persian Gulf. Given Saudi Arabia’s domestic problems with continued US basing, Iraq became an even better geographical option. This long-standing US geostrategy regarding the Persian Gulf can be traced back to Henry Kissinger’s tenure, with US control of the Persian Gulf oil as the stated goal. Robert Dreyfuss wrote an excellent essay on this history, entitled, “The Thirty Year Itch.” <1> On a related note, the French, Russian and Chinese oil exploration contracts that Saddam initiated during the late 1990s now appear to be void under the post-war US/UK occupation. The cancellation of these contracts worth a reported $1.1 trillion dollars is to be expected considering the neoconservative agenda is premised upon a US Global Power willing to thwart any nation that “even aspires” to challenge the US’s role in the world.

The second factor the Bush administration is undoubtedly and acutely aware of is the recent studies by oil geologists regarding Peak Oil. The most comprehensive analysis of global oil reserves is provided by the highly regarded firm, Petroconsultants, Inc. out of Zurich. In 1995 their ($35,000) annual report predicted world oil production would peak at the “end of the next decade,” or 2010. <2> This date coincides with the technical analysis provided by respected oil geologists such as Colin Campbell and Jean Laherrère. <3> However, some veteran oil geologists such as Kenneth Deffeyes have now concluded that Peak Oil may in fact occur earlier, perhaps between 2004 and 2008. The following illustrates his sentiments:

"My own opinion is that the peak in world oil production may even occur before 2004. What happens if I am wrong? I would be delighted to be proved wrong. It would mean that we have a few additional years to reduce our consumption of crude oil. However, it would take a lot of unexpectedly good news to postpone the peak to 2010. <4>

However, the third and critical coalescing factor that led to the Iraq war is the one least understood. It was the unexpected challenge to the dollar’s hegemonic status from the emergence of a “petroeuro” in Iraq which provided the final macroeconomic factor that necessitated Saddam’s overthrow, and the installment of a pro-US puppet government. The following is how an individual very well versed in the nuances of macroeconomics alluded to the unspoken truth for the unilateral invasion of Iraq:

"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 82 cents), and has actually made off like a bandit considering the dollar's steady depreciation against the euro. (Note: the dollar declined 17% against the euro in 2002.)

"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 towards the euro, especially from Iran -- the 2nd largest OPEC producer who is actively discussing a switch to euros for its oil exports)."

This essay will discuss the macroeconomics of the `petrodollar' and the unpublicized but real challenge to US economic hegemony from the euro as an alternative oil transaction currency. The Iraq war had less to do with any threat from Saddam’s old weapons of mass destruction program and certainly less to do to do with fighting terrorism than it has to do with the almighty dollar. Iraq was in large part an oil currency war – a war designed to keep the euro from becoming an alternative oil transaction currency.

Origins of the “Petroeuro” and the 2003 Iraq War

Saddam Hussein sealed his fate when he announced on September 24, 2000 that Iraq was no longer going to accept dollars for oil being sold under the UN’s oil for food program, and decided to switch to the euro as Iraq’s oil export currency. <5> (Later Iraq’s $10 billion UN reserve fund also transitioned to euros) At that point, another manufactured Gulf War become inevitable under President George W. Bush. As revealed in recent books by former US Treasury Secretary Paul O’Neill and former Counterterrorism czar, Richard Clarke, the Bush administration intended to overthrow Saddam from their first week in office. <6><7> From the ‘Big Picture’ perspective, everything else aside from the dollar’s role as the world’s reserve currency and the Saudi/Iran/Iraq oil issues (i.e. domestic political issues and international criticism) is peripheral and of marginal consequence to the Bush administration.

Furthermore, the dollar-euro threat is powerful enough the neoconservatives decided to jeopardize the transatlantic relationship, which has resulted in the subsequent EU economic backlash. The risks of war were undertaken in the short-term to stave off the long-term dollar crash of an OPEC transaction standard change from dollars to euros.

Regarding Iraq, WMD or no WMD, it is clear the Bush administration entered office in early 2001 seeking to replace Saddam with a pliant regime. This information about Iraq's oil currency was not discussed by the US media or the Bush administration as it would have exposed the US/UK war plans as purely imperialistic. This quasi `state secret' was briefly addressed in a Radio Free Europe article that discussed Saddam's switch for his oil sales from dollars to the euros, to be effective November 6, 2000:

"Baghdad's switch from the dollar to the euro for oil trading is intended to rebuke Washington's hard-line on sanctions and encourage Europeans to challenge it. But the political message will cost Iraq millions in lost revenue. RFE/RL correspondent Charles Recknagel looks at what Baghdad will gain and lose, and the impact of the decision to go with the European currency." <8>

At the time of the switch many analysts were surprised that Saddam was willing to give up approximately $270 million in annual oil revenue for what appeared to be a political statement. However, contrary to one of the main points of this November 2000 article, the steady depreciation of the dollar versus the euro since late 2001 means that Iraq actually profited handsomely from the switch in their reserve and transaction currencies to the euro. Indeed, The Observer divulged these facts in an article one month before the war: `Iraq nets handsome profit by dumping dollar for euro,' (February 16, 2003).

"A bizarre political statement by Saddam Hussein has earned Iraq a windfall of hundreds of millions of euros. In October 2000 Iraq insisted upon dumping the US Dollar -- `the currency of the enemy' -- for the more multilateral euro." <9>

Although Iraq's oil currency switch still remains effectively censored by the five US media conglomerates, the above UK article illustrates the euro has gained about 25% against the dollar since late 2001, which also applied to the $10 billion in Iraq's UN `oil for food' fund that was previously held in US dollars. In February 2003 it was reported Iraq's oil for food reserve fund had swollen from $10 billion dollars to about € 26 billion euros. According to a former government analyst, the following scenario would occur if OPEC made an unlikely, but sudden (collective) switch to euros, as opposed to a gradual transition.

"Otherwise, the effect of an OPEC switch to the euro would be that oil-consuming nations would have to flush dollars out of their (central bank) 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 US 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 US 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 US and the EU switching roles in the global economy)."

Although a collective switch by OPEC would be extremely unlikely barring a major panic on the US dollar, it would appear that a gradual transition to a “basket of currencies” or a dual-OPEC currency transaction standard including the dollar and euro is quite plausible. Unfortunately the current Bush administration chose a military option instead of a multilateral conference regarding monetary reform. In the aftermath of toppling Saddam it is now clear the US wants to establish four large and permanent military bases in Iraq, thereby able to project force anywhere in the Persian Gulf region. <10> Indeed, there is no `exit strategy,' as the US military will be needed to protect the newly installed regime, and to send a message to other OPEC producers that they too might receive `regime change' if they convert their oil payments to euros.

Below are excerpts from an article on www.prudentbear.com that candidly address the importance of petrodollars. Despite several logical flaws in this article such as equating a change in the oil export currency to an “Arab oil embargo,” the author does acknowledge one of the key issues about the Iraq war:

“. . . the one factor underpinning American prosperity is keeping the dollar the World Reserve Currency. This can only be done if the oil producing states keep oil priced in dollars, and all their currency reserves in dollar assets. If anything put the final nail in Saddam Hussein's coffin, it was his move to start selling oil for Euros.

The US is the sole super power and we control and dictate to the Middle East oil producers. America has the power to change rulers if they can't follow the "straight line" the US dictates. America's prosperity depends on this.

Governments have secrets. If politicians always told the truth, there wouldn't be any secrets. So, if governments are to keep secrets, how can you fault a politician for not telling the whole truth? We would assert that the President failed to present the real case for Iraq, which is: 1) prosperity for America based on controlling Middle East oil, and on maintaining the Dollar as the World Reserve Currency, and 2) peace and stability, which the guaranteed access to oil brings to the world...” <11>

The last sentence illustrates how the US government uniquely defines “access” to oil as *control* of oil. Indeed, this definition of “access to oil” is not free market economics, but rather a military command economy. Additionally, I find the statement about the "need" for government secrecy to be rather tautological, circular in logic, and certainly not in the spirit of what the Founding Fathers stated was imperative to a functioning democracy -- an informed citizenry. In any event, the author is quite correct that much of our prosperity has been created by artificial geopolitical arrangements, some of which are under strain from the euro and geopolitical tensions arising from overt neoconservative geostrategy.

Overview of structural imbalances within the US economy

The US economy has acquired significant structural imbalances, including our record-high $486 billion trade account deficit (5 % of GDP), a $7 trillion dollar deficit (65% of GDP), and the recent return to annual budget deficits in the hundreds of billions over the last three years. These imbalances are being exacerbated by the Bush administration’s ideologically driven tax cut and massive spending policies, which are creating enormous deficits for the rest of this decade. Why is the dollar still predominant despite these significant structural imbalances? While many Americans assume the strength of the US dollar merely rests on our economic output (i.e. GDP), the ruling elites understand that the dollar’s strength is founded on its two fundamentally unique advantages relative to all other hard currencies.

The majority of Americans are not cognizant to the fact that the ‘strength’ of our current economy is founded on the dollar’s two pivotal advantages following the Bretton Woods Conference of 1944-1945. First is the dollars role as the dominant international reserve currency, which affords the US market with its “safe harbor” international status. The second crucial factor is the dollar’s role as the monopoly currency for global oil transactions. While the dollar’s role as the world’s international reserve currency is well understood, the effects of “petrodollar” recycling for international oil transactions is rarely discussed.

Origins of the Petrodollar

The valuation of the US dollar was rather shaky after August 1971 when the Nixon had to de-link the dollar from the $35 per oz. “gold standard.” According to Dr. David Spiro’s research on this issue, in 1973-74 the Nixon administration sought to alleviate this situation by negotiating assurances from Prince Fahd of Saudi Arabia to price oil in dollars only, and to invest Saudi’s surplus oil proceeds in US Treasury Bills. <12> In return the US would arm and protect the Saudi regime. These agreements created the phenomenon known as “petrodollar recycling.” The US prints hundreds of billions of fiat dollars, which US consumers provide to other nations via trade when we purchase their imported goods. Hundreds of billions of these dollars then become petrodollars when used by nations to purchase oil/energy from OPEC producers. Depending upon the price of oil, approximately $600 to $800 billion petrodollars are annually ‘re-cycled’ from OPEC sales and invested back into the US via Treasury Bills or other dollar-denominated assets.

The fact that all buyers of oil must first buy dollars to pay for the oil supports the US dollar as the world’s reserve currency, and eliminates our currency risk for oil. Oil priced in “petrodollars” and the dollar as the world’s reserve currency has supported the value of our currency which by normal economic logic, given America’s trillions of dollars in trade deficits over the past decade, should have much less purchasing power than it currently possesses. An enlarged EU and a strong euro are challenging this arrangement.

However, as long as the dollar remains the monopoly oil transaction currency, its “storage of wealth” is theoretically derived from the simple fact that it purchases between 1.5 and 1.9 gallons of crude oil. (Using OPEC price range of $22-$28 per barrel, and 42 gallons in a production barrel). No other hard currency in the world can be used to directly purchase the most valuable commodity in the world – oil. This unique geo-political agreement with Saudi Arabia has worked to our favor for the past 30 years by eliminating any fluctuation (currency risk) in our oil purchases in relation to the dollar’s valuation, raising the entire asset value of all dollar denominated assets/properties, and facilitating the Federal Reserve in creating a truly massive debt and credit expansion (or `credit bubble' in the view of some economists). In effect, global oil consumption via OPEC “petrodollar recycling” provides a subsidy to the US economy.

OPEC, the Euro, and EU enlargement

It is no secret that the Europeans created the EU in an effort to create a huge trading bloc and common currency that could directly compete with the large US economy. Hence, the goals of the EU include the euro becoming an alternative international reserve currency. To facilitate that goal, the euro would have to become an alternative “storage of wealth” for oil transactions. Obviously the EU would like their oil purchases to be priced in the euro, as that would minimize their currency risk, and stabilize their oil bill. Moreover, in May 2004 ten additional member states are scheduled to join the European Union, which will result in an aggregate GDP of $9.6 trillion - essentially comparable to the US s’ $10.5 trillion GDP.

Indeed, in a visit to Spain in April 2002, Mr Javad Yarjani, the Head of OPEC's Market Analysis Department, illustrated the new dynamics of the EU and the euro currency in an important speech:

“In the short-term, OPEC Member Countries (MCs), with possibly a few exceptions, are expected to continue to accept payment in dollars. Nevertheless, I believe that OPEC will not discount entirely the possibility of adopting euro pricing and payments in the future.” <13>

Based on the details of this candid speech, momentum for OPEC to consider switching to the euro will grow once the EU expands in May 2004 to 450 million people with the inclusion of 10 additional member states. At that point, the majority of OPEC oil exports will be purchased by the EU. Undoubtedly, the euro currency is a significant new competitor, and appears to be the primary challenge to US dollar hegemony. The Bush administration is attempting to artificially divide the EU with verbal hand grenades such as “Old Europe” vs. ‘New Europe.” This divisive strategy needlessly damages the transatlantic US/EU relations.

Post-war Iraq

Just as I hypothesized in December 2002, after toppling Saddam regime the Bush administration quickly reverted Iraq’s oil currency transactions back to the dollar. I suspect their goals also included quickly rebuilding Iraq’s oil production capability, initiate vast Iraqi oil production in far excess of OPEC quotas, to reduce global oil prices, and thereby dissolve the OPEC cartel’s price controls. Not surprisingly, this administration was not successful in pursuing such bold polices. While the neoconservatives succeeded in their initial tactical objectives, we are in the early stages of the US occupation, and the increasing volume of attacks by Iraqi nationalists does not inspire confidence. Removing Saddam was more of a victory for dollar hegemony and Bush’s re-election campaign than a victory in the fight against terrorism

On April 28, 2003 msnbc.com published the first article in the mainstream US media since the autumn of 2000 that addressed some of the issues regarding Iraqi oil exports in the euro. Apparently until the U.N. sanctions were lifted; Iraq's oil was to remain under UN control in the "oil for food" program. To reiterate, the following excerpts from this forthright msnbc.com article is the *only* mainstream US media reference that I could locate from 2001-2003 that discussed the Iraq war and the underlying petrodollar issues. It was entitled "In Round 2, It's the Dollar versus the Euro" (implying the Iraq war was `Round 1').

“...A new world is being created. Ironically, the most troublesome clash of civilizations in it may not be the one the academics expected: not Islamic fundamentalists vs. the West in the first instance, but the United States against Europe.

To oversimplify, but only slightly, it's the dollar vs. the euro.

. . . The Europeans and the United Nations want the inspections regime to resume because as long as it is in place, the U.N. "oil-for-food" program remains in effect. Not only does France benefit directly-its banks hold the deposits and its companies have been involved in the oil sales-the entire EU does as well, if for no other reason than many of the recent sales were counted not in dollars but in euros. The United Nations benefits because it has collected more than a billion dollars in fees for administering the program. As long as the 1990 sanctions remain in effect, Iraq can't "legally" sell its oil on the world market. At least, to this point, tankers won't load it without U.N. permission, because they can't get insurance for doing so.

Sometime in the next few weeks, push will come to shove. There are storage tanks full of Iraqi crude waiting in Turkish ports…. There may come a time when the smart thing to do is turn the whole Iraq situation over to the U.N. This is not that time." Meanwhile, if the rest of the world tries to block any and all Iraq oil sales, it's possible that American companies will find a way to become the customer of first and last resort.

And we'll pay in dollars...” <14>

Although the author addressed this subject somewhat obliquely, his final sentence is quite candid. Indeed, my original hypothesis from December 2002 was validated in a Financial Times article dated June 5th 2003 which confirmed Iraqi oil sales returning to the international markets were once again denominated in US dollars, not euros. Not surprisingly, this detail was never mentioned in the US imperialist, corporate-controlled, six major media conglomerates, but confirmation of this vital fact provides insight into one of the crucial -- yet overlooked -- rationales for 2003 the Iraq war.

"...The tender, for which bids are due by June 10, switches the transaction back to dollars -- the international currency of oil sales -- despite the greenback's recent fall in value. Saddam Hussein in 2000 insisted Iraq's oil be sold for euros, a political move, but one that improved Iraq's recent earnings thanks to the rise in the value of the euro against the dollar..." <15>

Before the war some commentators attempted to dismiss my macroeconomic analysis of the war as a “conspiracy theory,” arguing the upcoming war had nothing to do with petroeuros, and everything to do with Iraq’s “vast WMD program” and “fighting terrorism.” In retrospect, the facts speak for themselves. One of the first executive orders of the Bush administration was to push through UN Resolution 1483, which passed on May 22, 2003, establishing a joint US/UK administered ‘Iraqi Assistance Fund.’ This provided the mechanism to quietly and quickly reconvert Iraq’s oil export sales back to the dollar. Indeed, an argument can be made the emergence of a ‘petroeuro’ was perceived by the Bush administration as a Weapon of Mass Destruction that necessitated the Iraq war.

Furthermore, despite Saudi Arabia being our `client state,' the Saudi regime appears increasingly threatened from civil unrest. Undoubtedly, the Bush administration is aware of these risks. Hence, the neoconservative framework entails permanent US military basing in Iraq. Four military bases have been proposed, thereby allowing the US to project power into the oil-rich eastern region of Saudi Arabia in the event of a Saudi coup by an anti-western group.

The Paradox

The Bush administration probably believes the occupation of Iraq and the installation of large and permanent US military presence in the Persian Gulf region will stop other OPEC producers from even considering switching the denomination of their oil sales from dollars to euros. However, using the military to enforce dollar hegemony for oil transactions strikes me as a rather unwieldy and inappropriate strategy.

Paradoxically, for a variety of economic and political reasons, it appears that a growing number of OPEC producers in the Middle East and South America may wish to transition their oil pricing from dollars to euros. Furthermore, we may be witnessing the regrettable emergence of a European-Russian-Sino geopolitical alliance in an effort to counter American Imperialism in the Persian Gulf region. Hence, it is increasingly plausible Russia may re-denominate its oil exports in euros. These issues and the continued devaluation of the dollar expose why the neoconservative strategy is fundamentally flawed. One of the dirty little secrets of today's international order is that the rest of the globe could topple the United States from its hegemonic status whenever they so choose with a concerted abandonment of the dollar standard. This is America's preeminent, inescapable Achilles Heel for now and the foreseeable future.

That such a course hasn't been pursued to date bears more relation to the fact that other westernized, highly developed nations haven't any interest to undergo the great disruptions which would follow -- but it could assuredly take place in the event that the consensus view coalesces of the United States as any sort of `rogue' nation. In other words, *if* the dangers of American global hegemony are ever perceived as a greater liability than the dangers of toppling the international order, the industrialized nations will react with a broad movement away from the dollar. The Bush administration and the neo-conservative movement has set out on a multiple-front course attempting to ensure this cannot take place, in brief by a graduated assertion of military hegemony atop the existent economic hegemony.

In conclusion, the structural imbalances in the US economy, along with the Bush administration's flawed tax, economic and most principally their overtly Imperialist foreign polices could result in the dollar's world reserve currency status and/or oil transaction currency status being placed in jeopardy or at the very least notably diminished over the next few years. In the event that such a hypothesis materializes, the US economy would require major restructuring in some manner to account for the reduction of either of these two pivotal advantages. This would be an exceedingly painful process if it occurs in a disorderly manner, perhaps reminiscent of 1930’s Great Depression. The next US administration will be greatly burdened in its attempts to mitigate these issues given the unfortunate deterioration of US international stature.

What is needed is a multilateral meeting of the G8 nations to reform the international monetary system. Given that future wars will become more likely over oil and the currency of oil, the author advocates that the global monetary system be reformed without delay. This would include the dollar and euro designated as equal international reserve currencies at parity, and placed within an exchange band along with a dual-OPEC oil transaction currency standard. Additionally, the G8 nations should also explore a future third reserve currency option regarding a yen/yuan bloc for East Asia.

A compromise on the euro/oil issues via a multilateral treaty with a gradual phase-in of a dual-OPEC transaction currency standard could minimize economic dislocations within the US. While these multilateral reforms may lower our over-consumption of energy and reduce our ability to project a massive global military presence, the benefits would include improving the quality of our lives and that of our children by reducing animosity towards the US while we rebuild our alliances with the EU and the world community. Creating balanced domestic fiscal polices along with global monetary reform is in the long-term national security interests of the United States.

Despite the media reporting otherwise, the current wave of ‘global anti-Americanism’ is not against the American people or against American values - but against the hypocrisy of militant American Imperialism. I respectfully submit the current polices of the neoconservative movement as expressed through PNAC policy papers, their manipulation of the citizenry through fear, and the application of unilateral military force is treasonous to both American Public and to the *fundamental principles that founded our nation.* Regrettably, President Bush and his neo-conservative advisors have chosen to apply a military option to an economic problem that requires a multilateral treaty. History may not look kindly upon their actions.

Saving the American Experiment

Only time will tell what will happen in the aftermath of the Iraq war and US occupation, but I am confident my research will contribute to the historical record and help others understand one of the important but hidden reasons for why we conquered Iraq. Until the US agrees to negotiate a more balanced Global Monetary system and embarks on a viable National Energy Strategy, our nation will continue to pursue a hypocritical foreign policy that is incompatible with the ideas of the founding fathers regarding freedom and liberty. The current neoconservative foreign policies are creating “blowback” and “anti-American” sentiments around the world, and deep divisions within nations that are traditionally strong US allies.

In conclusion, the Iraq war was designed to 1) secure US/UK oil supplies before and after global Peak Oil with the installation of US military bases, and 2) to use this large military presence to "dissuade" other oil-producers from moving towards the euro as an oil transaction currency. These are the two crucial elements for maintaining US hegemony over the world economy. Reconverting Iraq back to the petrodollar was not the critical issue, but preventing any further momentum towards a ‘petroeuro’ is a critical component of current US Geostrategy. While deceiving the American people into war, this administration sent a message to other OPEC producers -- "You are either with us or against us."

However, in the end I predict the rules of economics and the laws of physics will prevail over the dreams of Global Empire. It will be increasingly logical for OPEC to re-denominate oil sales in euros once the EU expands in May 2004. Additionally, Peak Oil will usher in an era in which demand for oil will forever outstrip supply. The neoconservatives understand what this means -- the end of US Hyperpower, and thus the end of their dreams of a US Global Empire.

The true test of US leadership and the citizenry will be acknowledging that our nation will soon endure economic hardship and the need to restructure our energy consumption based on reality. Everyone on earth will be impacted by Peak Oil, and given that reality -- multilaterialism rather than unilateralism is the only way to create a peaceful outcome.

Quite frankly, in order to save the American Experiment and stop our slide towards an isolated and authoritarian state, we must elect an enlightened administration in 2004. It would appear that four difficult challenges await the next US administration, including; 1) negotiating global monetary reform, 2) broadly re-organizing US fiscal policies, 3) developing a National Energy Strategy, and 4) attempting to repair our damaged foreign relationships with the UN, EU, Russia, and the Middle East. Sadly, the next US President will have to undertake these challenges from a weakened position both economically and diplomatically. I do not envy the arduous journey that awaits the 44th President of the United States.

“I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man.” – Thomas Jefferson

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References:

1. Dreyfuss, Robert, ‘The Thirty Year Itch,’ Mother Jones, March/April 2003

2. Heinberg, Richard, ‘The Party’s Over: Oil, War, and the Fate of Industrialized Society,’ New Society Publishers, 2003

3 Laherrere, Jean, “’Can we identify limits to worldwide energy resources’ Oil & Gas Journal, June 30, 2003

4. Dreffeyes, Kenneth H., ‘Hubbert’s Peak: The Impending World Oil Shortage,’ Princeton University Press (2001) Sample chapter can be found here: http://pup.princeton.edu/chapters/s7121.html

5. Block, Robert, ‘Some Muslim nations advocate dumping the dollar for the euro,’ The Wall Street Journal, April 15, 2003

6. Suskind, Ron, ‘The Price of Loyalty: George W. Bush, the White House, and the Education of Paul O’Neill,’ Simon & Schuster, 2004

7. Clarke, Richard, “Against All Enemies: America’s War on Terrorism.” Free Press, 2004

8. Recknagel, Charles, "Iraq: Baghdad Moves to Euro," Radio Free Europe (November 1, 2000)
http://www.rferl.org/nca/features/2000/11/01112000160846.asp

9. Faisal Islam, Iraq nets handsome profit by dumping dollar for euro,’ Guardian, February 16, 2003
http://observer.guardian.co.uk/iraq/story/0,12239,896344,00.html

10. Lobe, Jim, “Iraq-US: Is it the Bases?” Inter Press Service News Agency (IPS), November 28, 2003 http://www.ipsnews.net/interna.asp?idnews=21331

11. Benson, Richard, ‘Oil, the Dollar, and US Prosperity,’ prudentbear.com, August 11, 2003 http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=25491

12. Spiro, David E., “The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets,’ Cornell University Press, 1999

13. The Choice of Currency for the Denomination of the Oil Bill," Speech given by Javad Yarjani, Head of OPEC's Petroleum Market Analysis Dept, on The International Role of the Euro (Invited by the Spanish Minister of Economic Affairs during Spain's Presidency of the EU) (April 14, 2002, Oviedo, Spain)
http://www.opec.org/NewsInfo/Speeches/sp2002/spAraqueSpainApr14.htm

14. ‘In Round 2, It’s the Dollar vs. Euro: US will make Europeans pay for failing to back war on Iraq,” msnbc.com, April 23, 2003 http://www.msnbc.msn.com/id/3068336/

15. Hoyos, Carol & Morrison, Kevin, ‘Iraq returns to the International oil market,” Financial Times, June 5, 2003 http://www.thedossier.ukonline.co.uk/Web%20Pages/FINANCIAL%20TIMES_Iraq%20returns%20to%20international%20oil%20market.htm

Copyright © 2003-2004 William Clark

Reprinted for Fair Use Only

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Note: Publishers catalog description – Available 1st Qtr 2005

Reveals the background -- and blowback from -- the first oil currency war

'PETRODOLLAR WARFARE'
Oil, Iraq and the Future of the Dollar
by William Clark

The invasion of Iraq may well be remembered as the first oil currency war. Far from being a response to 9-11 terrorism or Iraq's alleged weapons of mass destruction, Petrodollar Warfare argues that the invasion was precipitated by two converging phenomena: the imminent peak in global oil production, and the ascendance of the euro currency.

Energy analysts agree that world oil supplies are about to peak, after which there will be a steady decline in supplies of oil. Iraq, possessing the world's second largest oil reserves, was therefore already a target of US geostrategic interests. Together with the fact that Iraq had switched to paying for oil in euros -- rather than US dollars -- the Bush administration's unreported aim was to prevent further OPEC momentum in favor of the euro as an alternative oil transaction currency standard.

Meticulously researched, Petrodollar Warfare examines US dollar hegemony and the unsustainable macroeconomics of 'petrodollar recycling,' pointing out that the issues underlying the Iraq war also apply to geostrategic tensions between the US and other countries including the European Union (EU), Iran, Venezuela, and Russia. The author warns that without changing course, the American Experiment will end the way all empires end - with military over-extension and subsequent economic decline. He recommends the multilateral pursuit of both energy and monetary reforms within a United Nations framework to create a more balanced global energy and monetary system thereby reducing the possibility of future oil depletion and oil currency-related warfare.

A sober call for an end to aggressive US unilateralism, Petrodollar Warfare is a unique contribution to the debate about the future global political economy.

About the author:
William Clark is XXXXXXXXXXXXXXXX at XXXXXXX University, School of XXXXXXXX. His research on oil depletion, oil currency issues and US geostrategy received a 2003 Project Censored award, published in 'Censored 2004.' While at XXXXXXX University he earned a Master of Business Administration (MBA); and a Master of Science/Information Technology Systems (MS/ITS). He lives in XXXXX, XXXXX.

nice work :toast:

still reading... but it hasn't dissapointed at all and seems to be very comprehensive. i hope you let us know when you get AIR TIME to tell your story :hi:

peace

another Clark/Clarke.

I'm sooo confused...:cry: