Although completely unreported by the U.S. media and government, the answer to the Iraq enigma is simple yet shocking — it is in large part an oil currency war. One of the core reasons for this upcoming war is this administrations goal of preventing further Organization of the Petroleum Exporting Countries (OPEC) momentum towards the euro as an oil transaction currency standard. However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves. The second coalescing factor that is driving the Iraq war is the quiet acknowledgement by respected oil geologists and possibly this administration is the impending phenomenon known as Global “Peak Oil.” This is projected to occur around 2010, with Iraq and Saudi Arabia being the final two nations to reach peak oil production. The issue of Peak Oil has been added to the scope of this essay, along with the macroeconomics of petrodollar recycling and the unpublicized but genuine challenge to U.S. dollar hegemony from the euro as an alternative oil transaction currency. The author advocates graduated reform of the global monetary system including a dollar/euro currency trading band with reserve status parity, a dual OPEC oil transaction standard, and multilateral treaties via the UN regarding energy reform. Such reforms could potentially reduce future oil currency and oil warfare. The essay ends with a reflection and critique of current US economic and foreign policies. What happens in the 2004 US elections will have a large impact on the 21st century.
Revisited — The Real Reasons for the Upcoming War With Iraq:A Macroeconomic and Geostrategic Analysis of the Unspoken Truth“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.”
Those words by Thomas Jefferson embody the unfortunate state of affairs that have beset our nation. As our government prepares to go to war with Iraq, our country seems unable to answer even the most basic questions about this upcoming conflict. First, why is there a lack of a broad international coalition for toppling Saddam? If Iraqs old weapons of mass destruction (WMD) program truly possessed the threat level that President Bush has repeatedly purported, why are our historic allies not joining a coalition to militarily disarm Saddam? Secondly, despite over 400 unfettered U.N inspections, there has been no evidence reported that Iraq has reconstituted its WMD program. Indeed, the Bush administrations claims about Iraqs WMD capability appear demonstrably false. [1] [2] Third, and despite President Bushs repeated claims, the CIA has not found any links between Saddam Hussein and Al Qaeda. To the contrary, some intelligence analysts believe it is more likely Al Qaeda might acquire an unsecured former Soviet Union Weapon(s) of Mass Destruction, or potentially from sympathizers within a destabilized Pakistan.
Moreover, immediately following Congresss vote on the Iraq Resolution, we suddenly became informed of North Koreas nuclear program violations. Kim Jong Il is processing uranium in order to produce nuclear weapons this year. (It should be noted that just after coming into office President Bush was informed in January 2001of North Koreas suspected nuclear program). Despite the obvious contradictions, President Bush has not provided a rationale answer as to why Saddams seemingly dormant WMD program possesses a more imminent threat that North Koreas active nuclear weapons program. Millions of people in the U.S. and around the world are asking the simple question: “Why attack Iraq now?” Well, behind all the propaganda is a simple truth — one of the core drivers for toppling Saddam is actually the euro currency, the — .
Although apparently suppressed in the U.S. media, one of the answers to the Iraq enigma is simple yet shocking. The upcoming war in Iraq war is mostly about how the CIA, the Federal Reserve and the Bush/Cheney administration view hydrocarbons at the geo-strategic level, and the unspoken but overarching macroeconomic threats to the U.S. dollar from the euro. The Real Reasons for this upcoming war is this administrations goal of preventing further OPEC momentum towards the euro as an oil transaction currency standard, and to secure control of Iraqs oil before the onset of Peak Oil (predicted to occur around 2010). However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves. This essay will discuss the macroeconomics of the petrodollar
The Dollar: The Role of The Global Currency
The most important question for a policy-maker who is interested in oil geopolitics is how do we effectively use currency.
The recent US Dollar devaluation has taken the form of a rise in the price of the dollar, which is now below $0.15 via its $30. As the global central bank moves towards the euro, this devaluation raises potential for a rise in oil prices, as well as a significant increase in the dollar’s value, as oil prices are falling. If the dollar were to hit $30 at the end of 2009, the value of the dollar would be much higher, with a very serious risk of major oil-oil conflicts in a region that has already received several oil crises. Since U.S. dollar has a limited impact on the global economy, there are a number of reasons why the dollar should be the best currency to use to communicate the economic problems that the U.S. would face.
One of the most central of these reasons, which is the impact of the dollar, would not be of much importance if the global central bank continued to attempt to artificially lower the dollar. If the global central bank continued to maintain low interest rates and then sell its fiat, the U.S. dollar would become vulnerable to any further downward pressure on world oil prices. Indeed, the dollar is becoming the preferred “currency” by the US dollar traders, who continue to pursue more complex trading strategies, particularly in the emerging world. For this reason, investors have developed a method of hedging against price volatility associated with the dollar during the price of the euro.
However, the current US dollar is not the only physical currency to be affected by this devaluation. The dollar is now the primary means of exchange for most commodities, such as oil, crude oil, or other mineral oils, which represent 2.1% of all petroleum produced globally, but are not used in the United States. Furthermore, due to the lack of real export markets, most of America’s mineral oils are not imported to America, so when they are imported, they are taken to Japan and South America, where they are sold on the global market.
The World Petroleum Market
Oil is a very important source of income for most Americans if not all of us eat or drink. As the world oil market expands, the world market for refined petroleum products by volume will expand and the price of refined refined oil will rise in tandem. As refined refined oil prices rise, demand rises. That process requires the substitution of oil products for those of other fuels. The main problem with the substitution of oil at the end of the petroleum cycle is the increased use of petroleum in general in a new way, especially in U.S. refining, as it has been used in the petroleum industry. Many petroleum customers and users don’t like using the crude as much as others, as they simply get more or less reliable and will need more and more refined crude as their fuel. Moreover, many of those customers and users would prefer to use their gasoline without that oil. Therefore, they are choosing to avoid using a