by Petrodollar » Tue 14 Mar 2006, 16:18:31
Thanks for the heads-up. I admire Engdahl's work a lot, and he wrote a nice endorsement of my book.
$this->bbcode_second_pass_quote('', '[')i]Petrodollar Warfare by William Clark is an important contribution to the question what the Iraq war was and is all about. Clark links the emerging Euro currency to Iraq’s pricing of its oil as one significant factor leading to Washington’s decision to topple Saddam Hussein. It might be open for argument whether a ‘Petroeuro’ as a replacement for the ‘Petrodollar’ is likely or not, given the many divisions within the European Union. But Clark’s thorough documentation of the discussion, notably plans for an Iranian Oil Bourse to counter NYMEX and the London IPE, provides a useful basis for further thinking about one of the vital strategic issues of today. Clark also extensively treats the issue of Peak Oil, or global depletion, as a major unspoken factor in the US oil agenda. This book is definitely worth careful reading.
— F. William Engdahl, author of A Century of War: Anglo-American Oil Politics and the New World Order
Engdahl's latest writing does not contradict my research, but he does mention an issue that warrants some elaboration. (He and I agree on the China/Russia/Iran energy issues, etc.) The question about the total supply of euros by the ECB is legitimate, but with a important caveat. The decision to increase the euro's money supply is also merely a
political decision - just as Japan's decision to prop up the US dollar.
It is true that the ECB has a staunch anti-inflationary bias, but international oil transactions do not result in inflation pressures
if those euros are being used outside the eurozone for oil sales. That is percisely what the US does - it exports its inflation, but unlike the EU, the US runs huge trade deficits. To suggest that the euro money supply can not be raised therefore the Kish International oil bourse can not function sets up a false dilemma.
On edit: Here's clarification about the ECB's position on petroeuros. In Oct 2003 the former/late head of the ECB, and person often regarded as one of the euro currency's "founding fathers" - William Duisenberg said that pricing oil in euro's is "
sensible" for certain EU customers. As far as I know, both the EU Parliament and ECB have stated their desires for petroeuro-based pricing -
especially from Russia (fyi: Moscow's central bank has conducted feasibility studies and determined a switch would be a net benefit to Russia - so it is indeed "sensible" from a monetary& economic perspective - but not from a geopolitical perspective)
http://www.gasandoil.com/goc/news/nte34420.htm$this->bbcode_second_pass_quote('', '[')b]European Central Bank believes pricing oil in euros is sensible
14-10-03 European Central Bank (ECB)President William Duisenberg said that it
might make sense for Russia to sell oil in euros to certain EU customers, entering a debate sparked that has big implications for currency markets. Asked to comment on remarks by President Vladimir Putin that he did not rule out switching Russia's oil pricing from dollars to euros, Duisenberg said this could particularly suit the nations currently lining up to join the common currency block.
"
It would be in their interest to pay for imports in their future domestic currencies," he told. "We are worried about the situation in countries that depend on imports of oil from Russia," he was quoted as saying. The agency also cited him as saying, however, that if Russia made a move to the euro it would be a unilateral decision.
Russia is the world's second-largest exporter of oil after Saudi Arabia and the world's top gas exporter. A switch would be a powerful symbolic victory for the euro and might accelerate its growing role as an international reserve currency to challenge the dominance of the dollar.
$this->bbcode_second_pass_quote('', '[')b]European leaders have campaigned since the single currency's 1999 launch for more of the world's most traded commodity to be priced in euros. Putin made his remarks during an official visit by German Chancellor Gerhard Schroeder. The talk prompted by Putin's statement further, saying Schroeder had actually "secured" an agreement with Putin on making the switch.
But economists warn that it would also press the euro higher against the dollar and make exports more expensive on world markets, potentially thwarting the block's economic recovery.