War, Oil, Euro v. US Economy...Does This Make Sense to You?

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Many of you may have already seen this and commented on it. I just found it. Though long, it appears to make sense as to the urgency of an Iraq War. I am not an economist, so I cannot endorse or refute its accuracy. Anyone want to discuss? Is it possible that this person is on track?

If so, what has been correct to date and what do we have to look forward to as far as US economy?

http://www.ratical.com/ratville/CAH/RRiraqWar.html

"It would appear that any attempt by OPEC member states in the Middle East or Latin America to transition to the euro as their oil transaction currency standard shall be met with either overt U.S. military actions or covert U.S. intelligence agency interventions. Under the guise of the perpetual `war on terror' the Bush administration is manipulating the American people about the unspoken but very real macroeconomic reasons for this upcoming war with Iraq. This war in Iraq will not be based on any threat from Saddam's old WMD program, or from terrorism. This war will be over the global currency of oil. A war intended to prevent oil from being priced in euros. "

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It now costs $1.22 for a euro dollar. If OPEC goes to the more valuable currency, then we should all brace for a gallon of gasoline costing $2.50 to $3.00 a gallon, and this price will be permanent.

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Here's a shorter version, though it misses alot of good points, such as the Chavez coup details.
http://socrates.berkeley.edu/~pdscott/iraq.html

Mornin' Gustav.

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http://www.peakoil.net/

The analysis of the Iraq war being fundamentally about oil and the need to preserve the oil price in dollars makes more sense to me than anything else I've read.

In november (I think) 2000 Saddam switched Iraqi crude oil exports from dollars to euros. That sealed his fate. America is terrified of OPEC charging in euros, because it would completely undermine the dollar as the worlds reserve currency.

And what was the first thing the coalition government in Iraq did? Reverted to selling oil in dollars.

If oil was priced in euros, America would have to EARN euros through exports in order to buy it. At the moment America effectively gets its (imported) oil for free by simply printing dollars. No wonder they want to keep it that way.

The peak oil website above gives more information on this phenomenum and how it will affect us all.

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hi Steve- Sure it does. Just read about PNAC and their agenda for the 21st century. There's no doubt that the Iraq war was about finding a huge source for oil for the USA, Israel and Britain.

You'd have to be a lemming to think it had anything remotely to do with democracy. Just ask the prisoners at Abu Ghraib.

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Dee - I think steve is agreeing with us that it was about oil. The "news" to me was that it was not JUST oil, but the dollar v. Euro oil.

I know A2Ker's are a well read bunch, and I'm emarrassed to admit my late knowledge of this. I just never made the currency connection, nor understood until now the implications. I knew of the Chavez coup attempt, but not the true reasoning behind it.

Am I correct in thinking the US could fall in a day if this were to happen with OPEC switching to Euro? And, does this help explain the "protection" and coddling of Saudi Arabia by the US? Does this explain the assisted exodus from the US of Bin Laden family and Saudi Princes a few hours after 9/11?

IF this is accurate, does it change your view on the war? Does it now become financial self-preservation?

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Good morning (as I presume it still is where you are) ms deepcups.

Colin Campbell at Peak Oil, gives some very interesting lectures. My problem is that I can't get more than 1 minute before the real player packs in...

The really terrible thing about Iraq is that its so important, America and Britain are going to be there no matter how threadbare their excuse, and no matter the cost to US/UK and Iraqi lives for the indefinite future.

In my opinion America is pulling together all the worlds oil resources in the knowledge that peak oil is now or just around the corner, thus buying time for a relatively pain-free transition to the new economy.

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no, no, no, folks;

why isn't the U.S. "gimme liberty or gimme death", the stalwart home of 'free' enterprise; the 'free' market; the defender of the 'free' world!

how could they possibly get involved in 'controlling' the 'freedom' of the rest of the world??

my, my, my,................. Shocked

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I don't think we want to control the freedom of the whole world. We only want to control it's oil, commerce, and people.

Oh, wait... Nevermind.

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The DOW has fallen nearly 150 points today and is well below 10,000.

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squinney, Here's my .02c worth: I don't believe for a minute that basing oil on the Euro is any better than the US dollar. The problem with the Euro is basically the same problem with the US dollar; there's nothing to back up the inflated currency. Germany is the third strongest economy in the world, but the rest of the Euro countries are economic baby-weights. If the oil started trading for the Euro, they're going to see inflation take over all of their economy, because they'll have more Euros chasing their products and services.

The economy of China is growing at the fatest rate in the world today, and most of their trade is with the US. The ability of the Chinese economy is somewhat tied to the strength of the dollar. What we have seen in the past is that the Bank of China and Japanese government buying US bonds to support the US dollar. The Euro countries will not be able to compete at that level.

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Hi, cicerone.

Yes, and as the article points out, if / when the oil is switched by OPEC to Euro rather than dollar backing, all of the current trade deficit with Japan and China will plummit our economy because our dollar trade deficit with them is what they use to buy their own oil.

(I think I explained tht right)

They use our dollars to buy their oil because OPEC bases oil on the dollar. In switching to Euro, our dollar isn't needed... And the whore of Babylon falls in a day?

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ci you wrote

Quote:

I don't believe for a minute that basing oil on the Euro is any better than the US dollar.

Globally I'm sure you're right. But but individual holders of euros or dollars might be pleased or very ****** off as the value of their particular currency rose or fell. Don't get me wrong ci I don't claim any great insight into international finance, but it seems to me pretty obvious that if oil were to be traded in euros, it would result in more demand for euros and its increase in value against the dollar. The European central bank could print more euros without risking inflation. Conversely the huge amount of dollars in circulation, unsupported by its tie to price of oil would lead to dollar inflation and the drop in its value.

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This is getting more play now. Came across this article today. Perhaps it will become more publicized so people know what is really going on.

http://www.guardian.co.uk/comment/story/0,3604,1270414,00.html

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Thanks for posting that link Squinney

The more I puzzled over the real reasons for the war (not even Bush goes to war for the fun of it) I came to the similar conclusions as John Chapman, but he puts it all together much better than I could.

I was therefore delighted to read his article in the Guardian last week. (We all like having our own suspicions confirmed!)

The one factor he misses out is Israel. I would sum up by saying the war was fought to

secure oil supply
secure the dollar
secure Israel.

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Two quick thoughts.

The US Dollar and the Euro can be freely converted between each other. I don't see how it makes any difference which one oil is priced in.

As for the urgency of the war - we had somewhere around 200,000 allied soldiers living in tents in the Kuwaiti desert waiting for the word to go. IMHO you can't leave your troops just sitting there as the weather heats up in late Spring. It's either do it now, or bring them home now.

Offshore these days it's a little over 100 F and 100% relative humidity every day. I'm just plain wiped out after making an hour round in the Plant. I could never condemn our troops to sitting outside in this, indefinitely, while our politicians get their act together.

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It doesnt make much difference if you are an individual buying oil. But it makes a great deal of difference if you are a government with legal access to the printing presses to run off a few more squillion dollars.

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Steve - we're in complete agreement about the printing press. The US is running $50 billion a month trade deficits, and our Federal Government is running nearly a $500 billion annual deficit. I don't claim to be an economist, but basic common sense tells me this connot continue indefinitely.

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Your basic common sense is right, Jim. It is an abuse of our power position.

Cycloptichorn

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War, Oil, Euro v. US Economy...Does This Make Sense to You?

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