[Specop_007]

The easiest way to get Iran?
Isreal.
US and Russia have both recently suffered horrible terrorist attacks. I could see (possibly here, work with me) these two countries collaborating on the War on Terror (Or Oil, or Gold or whatever you want to call it). If Isreal knew it had America and Russia's full support on an Iranian war, they'd be all over it so fast the UN wouldnt know it happened till it was over.
Isreal has long had a First Strike policy as well as having no qualms about striking back. The global communities concerns of war and whatnot really dont seem to phase Isreal to any great extent.
So if you want to invade a country, but couldnt do it yourself because of the global communities backlash, why not make it worthwhile for your ally (Who wants to ANYWAYS) to go ahead and do the dirty work for you?

Interesting time we live in.

[savethehumans]

Uh, Specop, Russia AND China just signed some lucrative oil & gas deals with Iran. They aren't gonna be jumping on the America-Israel "let's invade" bandwagon anytime soon.

TSHIF in 2005, folks--welcome to the petro-economic war world!

[Fatherof4]

Anyone here have enough understanding of the concept of petrodollars and how a move to pricing oil in Euros would affect the U.S. economy. I've read that the threat of Iraq deciding to price oil in Euros instead of U.S. dollars was a major motivating factor in the invasion.

If you understand it please explain like you are talking to a 10 year old, so I might have a chance of understanding it too. Thank you.

[Fatherof4]

Ok... I'm reading the thread The Euro vs. The Petrodollar... I'll post there with my questions.

http://www.peakoil.com/fortopic1545.html

[savethehumans]

Father: the basic point can be understood by a FIVE year old, actually:

Currently, the only currency in which oil can be bought is the dollar, thus the term PETROdollar. Knowing they have the world by the tail, the US has totalled up more international debt than could ever be paid back if the bill comes due. Since the world needs dollars, the bill has never come due...until, perhaps, now.

Moves are being made by the EU, Russia, China, Japan, et al, suggesting that oil be bought by euros, yuan, yen, et al, as well as the dollar. If this happens, the dollar will not be so desperately needed by the whole world. Thus, the debt bills can be made due. Unpayable, the dollar, and the dollar economy, would totally collapse. It will affect the rest of the world, too, but not like it would have if oil had remained buyable only in dollars. The world, at this point, despises America so much, that they are likely willing to take this risk.

For the older set (10+): Saddam Hussein proclaimed in 2002 (or 2001, I forget which) that Iraq's oil could be bought in euros--breaking with a long-standing OPEC policy. And several other oil producing countries were toying with the same idea. Of course, the US government could not permit this. An Iraq invasion was planned from the start of the Bush administration; 9-11 and Saddam's move put it on the front burner.

Now, the rest of the world is talking alternative oil currencies. Not even the US can fight the whole world (and a lot of us don't WANT resource wars, anyway). Worse, OPEC is starting to listen to the demands. Both Iran and Saudi Arabia have been making deal after deal for their fossil fuels--with the EU, Russia, and China. Economies in these Middle East nations are the pits these days. What government WOULDN'T want lots of fresh, new currency coming in, to placate their restless people and keep them afloat?

The military is the US' playing card in the Middle East. Problems in Iraq notwithstanding, Saudi Arabia and Iran have two of the three largest oil supplies on the planet. Not enough troops? Well, our technology cuts out some of the needs for troops. The rest can be solved by reactivating the draft--which should happen next year. Then, the government reasons, we can just (literally) bloody well control the whole Middle East, and its oil and gas distribution. (That oil and gas are/will be depleting fast here makes this an exercise in futility--but no one's accusing the US government of having a brain between their two ears!)

Hope this helps. Any other questions, I, and even more informed posters than me on this site, will be happy to help. I, for one, am glad you are asking. More people need to...before time is up, and that time, I'm afraid, is near.

[Carlhole]

William Clark, a physician actually, but someone with an interest in the politics of currencies and events surrounding oil and the middle east, has just written a book entitled "Petrodollar Warfare", available on Amazon. It would probably be a pretty good read.

I always liked the article below by F. William Engdahl:

http://www.currentconcerns.ch/archive/2 ... 030409.php

Engdahl is German and a Princeton-trained economist. He wrote "A Century of War: Anglo-American Oil Politics and the New World Order" in which hed discusses currencies at length also.

[Euric]

Forbes is betting that within 12 months the price of oil will return to 35~40 $/barrel level. A bigger crash then the dot com crash of the late '90s. If this is in fact true, then what happens to future petrodollar earnings needed to fund US deficits?

US increase in deficits have been securely funded by increasing oil prices. The more oil costs the more dollars there are to buy treasuries. A crash in oil pricing will see less of a need for dollars in the future and a severe, not a secure, funding crisis for the US deficits.

All this at a time when Iran will be selling its oil, and others as well who want to tag along, in euros beginning next spring.



http://www.finance24.com/articles/compa ... 85_1761935

[Snowrunner]

$this->bbcode_second_pass_quote('Euric', 'A')ll this at a time when Iran will be selling its oil, and others as well who want to tag along, in euros beginning next spring.

[azreal60]

Perhaps i read this wrong, but this doesn't seem like something we WANT happening.

$this->bbcode_second_pass_quote('', 'U')S increase in deficits have been securely funded by increasing oil prices

[davzee]

$this->bbcode_second_pass_quote('Snowrunner', '')$this->bbcode_second_pass_quote('Euric', 'A')ll this at a time when Iran will be selling its oil, and others as well who want to tag along, in euros beginning next spring.

[Snowrunner]

$this->bbcode_second_pass_quote('davzee', '
')Notice that the countries doing that are (a)communist and/or (b)decidedly anti -american (western)

[Euric]

$this->bbcode_second_pass_quote('azreal60', 'P')erhaps i read this wrong, but this doesn't seem like something we WANT happening.

$this->bbcode_second_pass_quote('', 'U')S increase in deficits have been securely funded by increasing oil prices

[DantesPeak]

Forbes' basic assumption is wrong, the current account deficit (trade deficit plus net international dividends/interest) can not increase much further. The US can not pay for additional oil or higher prices, unless it cuts back something else.

This is for two reasons. The current account is financed by foreign central banks and private investors. Actually the FCBs also get their money from private investors in their countries. The FCBs are probably unwilling to lend more, and private investors are unable to lend more. The latter fact is almost never discussed in the financial media.

[Euric]

$this->bbcode_second_pass_quote('davzee', '
')
Notice that the countries doing that are (a)communist and/or (b)decidedly anti -american (western).

[Euric]

$this->bbcode_second_pass_quote('DantesPeak', 'F')orbes' basic assumption is wrong, the current account deficit (trade deficit plus net international dividends/interest) can not increase much further. The US can not pay for additional oil or higher prices, unless it cuts back something else.

This is for two reasons. The current account is financed by foreign central banks and private investors. Actually the FCBs also get their money from private investors in their countries. The FCBs are probably unwilling to lend more, and private investors are unable to lend more. The latter fact is almost never discussed in the financial media.

[DantesPeak]

The budget deficit is effectively financed by the current account, directly and indirectly. Without the current account, the budget deficit would have already forced interest rates much higher.

New petrodollars don't necessarily find their way back to the US.
What is to stop Iran from converting dollars to euros? Nothing. The petrodollar theory assumes that the new dollars are maintained in some type of dollar investment or account by those investors outside the US, a proposition that may become unreliable.

The end effects of a bubble are a crash, but I think Forbes is wrong by focusing on oil. A bubble means there is an unreasonable accumulation or inventory of something, and I don't see much of that in regards to oil. The housing bubble is a much better example.

He is right there will be a crash, but it may be an generally inflationary crash where oil prices keep going higher, and the dollar lower.

[Euric]

$this->bbcode_second_pass_quote('DantesPeak', '
')
New petrodollars don't necessarily find their way back to the US.

[deconstructionist]

My most recent rant on the topic--comments/critique welcome. can be seen with links to relevant info included at the following url: http://tinyurl.com/9qsha
------------------------------------

The mass media would have you believe that we are at war because Iraq is a hotbed for breeding terrorists and we are protecting our national interests by bringing democracy there. Common liberal thinking would have you believe that we are there simply for "oil" and that the war is wrong and it only serves the interests of the rich and greedy. While the war certainly does help the rich and greedy, that characterization is not entirely true... The answer is--and it is a simple one--we are at war with Iraq to protect our currency, and to protect our way of life. While the answer is simple, understanding why that is the answer takes a bit of explaining.

If you've read my blog or you read www.museletter.com, you know that oil is traded in dollars. That means if anyone wants to purchase oil, be it a corporation or a nation, they must exchange whatever currency they use for US dollars. This policy was instituted in a deal with the US and OPEC shortly after the oil shocks of the 70s. During the late 20th century, The World Bank, under the direction of Robert Mcnamara from 1968-1981, "helped" 3rd world nations industrialize by floating them HUGE loans--in US dollars--so they could buy oil. Of course there was no way these countries could pay back these loans, but the investment in dollars created by this practice allowed the dollar to grow stronger and stronger and allowed us to carry a RE-GODDAMNED-DICOLOUS amount of debt. But as long as countries are buying dollars to buy oil, things were right and good--as there is demand for dollars.

Our currency remains strong not because we produce any exports of intrinsic value (aside from weapons), but because foreign investors were buying dollars left and right. In fact we started the practice of mass-outsourcing of physical goods production and jobs at about the same time as the "petrodollar" was created.

Basic economic theory says that the more something is demanded, the more it is worth. In the simplest terms, currencies work in the same fashion. Dollars are vaulable because there is a demand for them in the global marketplace. Once that demand is taken away, the value of our currency plummets, and we are stuck being with no choise but to devalue it. Trust me, while they are a bunch of fuckwads, the Bush administration has our best interests in mind in not wanting this to happen.

We invaded Iraq in 1991 shortly after they annexed Kuwait. They had just gained control of over another 1.5 million barrels of oil per day and Sadam Hussein wanted to trade this oil for currencies other than the dollar. So we blasted them into the stone age and slapped some sanctions on their ass for 12 years, granting contracts to US corporations to rebuild the country that we had destroyed. This not only kept the dollar strong and the rich happy, but it sent a message to all other oil-exporting nations--fuck with the petrodollar and we will blow you up a whole bunch. Problem solved... sort of. In 2003, those sanctions were lifted, and Hussein began trading oil for EUROs. So we made the of course false claim that Iraq is connected to Al Queda and that they were responsible for the 9/11 attacks and we had to kick their muslim asses.

The reason we attacked Iraq again? THEY WERE TRADING OIL FOR EUROs! This war was not a pre-emptive strike on our part. Hussein struck first--economically. This war is definitely about oil--but not for consumption--for profit. Without "people" buying dollars to buy oil, our country would sink into a MASSIVE depression. And ain't no prozac gunna help us outta that one. Haliburton would not stand for their shareholders' investments becoming worthless in a matter of a few months as the dollar lost value and inflated by hundreds upon hundreds of percents. I was in Russia during 1993 as their currency was devaluing. When I got there, the Rubel was trading 700:1 against the dollar. ($1 = 700 rubels). When i left--8 days later-- it was trading at 800:1.

I will be the first to tell you that this war is bullshit, we should not be there, war in general is wrong, violence is wrong. But trust me the devaluation of currency as I described in Russia above will happen in the US as well if we don't defend the "petrodollar."

The last thing we are interested in doing in Iraq is building democracy. It is not in their best interest to trade oil for dollars and they know it. So why would they continue to do so if they had free-will over their own government and fiscal policy?

So the real reason we are in Iraq--to defend our nation's economic security. To defend our national security. To defend our standard of living. To defend our god-given right as Americans (god bless america...) to consume. It's not so easy to be anti-war when you understand that we were attacked first--economically. We really are fighting for our lives.

[I_Like_Plants]

Beautiful post. Very good explanation of the system, we hate the game of dodgeball but we are required to play, and we don't get to choose our side....

[Specop_007]

$this->bbcode_second_pass_quote('deconstructionist', '
')I will be the first to tell you that this war is bullshit, we should not be there, war in general is wrong, violence is wrong. But trust me the devaluation of currency as I described in Russia above will happen in the US as well if we don't defend the "petrodollar."