Economic perspective on the war
Geoffrey Heard, Australia
*** It's not about oil or Iraq. It's about the US and Europe going
head-to-head on world economic dominance. ***
Summary: Why is George Bush so hell bent on war with Iraq? Why does his
administration reject every positive Iraqi move? It all makes sense when
you consider the economic implications for the USA of not going to war
with Iraq. The war in Iraq is actually the US and Europe going head to
head on economic leadership of the world.
America's Bush administration has been caught in outright lies, gross
exaggerations and incredible inaccuracies as it trotted out its litany
of paper thin excuses for making war on Iraq. Along with its two
supporters, Britain and Australia, it has shifted its ground and
reversed its position with a barefaced contempt for its audience. It has
manipulated information, deceived by commission and omission and
frantically "bought" UN votes with billion dollar bribes.
Faced with the failure of gaining UN Security Council support for
invading Iraq, the USA has threatened to invade without authorisation.
It would act in breach of the UN's very constitution to allegedly
enforced UN resolutions.
It is plain bizarre. Where does this desperation for war come from?
There are many things driving President Bush and his administration to
invade Iraq, unseat Saddam Hussein and take over the country. But the
biggest one is hidden and very, very simple. It is about the currency
used to trade oil and consequently, who will dominate the world
economically, in the foreseeable future -- the USA or the European
Union.
Iraq is a European Union beachhead in that confrontation. America had a
monopoly on the oil trade, with the US dollar being the fiat currency,
but Iraq broke ranks in 1999, started to trade oil in the EU's euros,
and profited. If America invades Iraq and takes over, it will hurl the
EU and its euro back into the sea and make America's position as the
dominant economic power in the world all but impregnable.
It is the biggest grab for world power in modern times.
America's allies in the invasion, Britain and Australia, are betting
America will win and that they will get some trickle-down benefits for
jumping on to the US bandwagon.
France and Germany are the spearhead of the European force -- Russia
would like to go European but possibly can still be bought off.
Presumably, China would like to see the Europeans build a share of
international trade currency ownership at this point while it continues
to grow its international trading presence to the point where it, too,
can share the leadership rewards.
DEBATE BUILDING ON THE INTERNET
Oddly, little or nothing is appearing in the general media about this
issue, although key people are becoming aware of it -- note the recent
slide in the value of the US dollar. Are traders afraid of war? They are
more likely to be afraid there will not be war.
But despite the silence in the general media, a major world discussion
is developing around this issue, particularly on the internet. Among the
many articles: Henry Liu, in the 'Asia Times' last June, it has been a
hot topic on the Feasta forum, an Irish-based group exploring
sustainable economics, and W. Clark's "The Real Reasons for the Upcoming
War with Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken
Truth" has been published by the 'Sierra Times', 'Indymedia.org', and
'ratical.org'.
This debate is not about whether America would suffer from losing the US
dollar monopoly on oil trading -- that is a given -- rather it is about
exactly how hard the USA would be hit. The smart money seems to be
saying the impact would be in the range from severe to catastrophic. The
USA could collapse economically.
OIL DOLLARS
The key to it all is the fiat currency for trading oil.
Under an OPEC agreement, all oil has been traded in US dollars since
1971 (after the dropping of the gold standard) which makes the US dollar
the de facto major international trading currency. If other nations have
to hoard dollars to buy oil, then they want to use that hoard for other
trading too. This fact gives America a huge trading advantage and helps
make it the dominant economy in the world.
As an economic bloc, the European Union is the only challenger to the
USA's economic position, and it created the euro to challenge the dollar
in international markets. However, the EU is not yet united behind the
euro -- there is a lot of jingoistic national politics involved, not
least in Britain -- and in any case, so long as nations throughout the
world must hoard dollars to buy oil, the euro can make only very limited
inroads into the dollar's dominance |
