http://english.pravda.ru/opinion/columnists/20-04-2006/79385-greed-0
The price of gold has climbed to over US$ 600 an ounce. Many are saying
this is because of the pending war with Iran. However, this leap in gold prices
has little to do with a real or imagined war with Iran, it has to do with greed.
Remember the Bruce Willis movie, DIE HARD 3, where 'terrorists' stole
dump-trucks full of gold from the N.Y. Federal Reserve Bank that belonged
to different foreign countries? Think what that gold was doing there in the first
place: in 1973 all the OPEC member countries agreed with the USA to sell
OPEC oil only for U.S. dollars. This forced every nation in the world to buy
U.S. federal reserve 'dollars' in order to purchase OPEC oil for import.
They have been exchanging their gold for our otherwise worthless 'dollars' for years,
having no other choice in order to import critical oil.
In March of 2006, Iran broke the OPEC oil-for-U.S. dollars-only agreement
by offering oil on the Paris stock market for EUROdollars. Other OPEC countries
fed up with U.S. hegemony are sure to follow. China and Japan, with their wallets
stuffed with yuan and yen, are cheerfully holding Iran's coat while waiting for the dust to settle.
Since our "federal reserve notes" have no value unless all countries are forced to
buy them at economic gunpoint, Iran is the leak in the dike. If the USA
doesn't stick its finger in it, it will definitely grow. Once other nations see
Iran getting away with selling her oil for real money, they will stop buying
U.S. dollars and the USA will be flooded with inflation because of her
idiocy in having federal reserve notes backed by nothing.
Inevitably, a major OPEC producer, Iran, just said NO!, and is selling
its oil for more viable currency, with the benefit of wrecking the US
economy far more than a thousand attacks on U.S. buildings could yield.
Even our allies are rubbing their hands in glee as they eagerly await us to
go down in economic flames.
Saddam Hussein attempted to sell his oil for other than U.S. dollars, and look
what happened to him under the false excuse that he had "WMD's." Now Iran
is attempting the same thing, so it looks like we might attack Iran under the false
excuse that they may be thinking of developing breeder reactors in a few years
that will take another 3-7 years to produce fissionable uranium and then develop
a viable delivery system.
But just THINKING of it years in the future is an excuse for war today, because
when all is done, we gotta protect American dollar-based oil companies and
their shareholders which comprise all the movers, shakers and campaign donors
in the USA. And if it takes killing another 50,000 of your teenage children to
protect their estates and trust funds, hey, it's worth it.
All across the U.S. patriotic Americans are being appointed to manage local
draft boards by Duuhbya & Rummy who "...have no plans for a Draft."
Yet Martha Stewart they send to prison for lying.
So, please pass this info along and tell people to get ready for:
inflation, another war ( Iran has a pact with China ....Armageddon?), and
the unconstitutional and unconscionable Draft that wants to kill your children for profit.
The government says to the people, "Just say NO to drugs."
When will the people finally learn that they are less free than 40 other countries
and 'Just say NO to government'?
Mere Her - og grunden til at guld er steget fra 300$ i 2001 til 600$ i 2006
http://www.energybulletin.net/12125.html
The Proposed Iranian Oil Bourse
.. Economics of Empires
A nation-state taxes its own citizens, while an empire taxes other nation-states. The history of empires, from Greek and Roman, to
Ottoman and British, teaches that the economic foundation of every single empire is the taxation of other nations. The imperial
ability to tax has always rested on a better and stronger economy, and as a consequence, a better and stronger military. One part of
the subject taxes went to improve the living standards of the empire; the other part went to strengthen the military dominance
necessary to enforce the collection of those taxes.
Historically, taxing the subject state has been in various forms-usually gold and silver, where those were considered money, but
also slaves, soldiers, crops, cattle, or other agricultural and natural resources, whatever economic goods the empire demanded and
the subject-state could deliver. Historically, imperial taxation has always been direct: the subject state handed over the economic
goods directly to the empire.
For the first time in history, in the twentieth century, America was able to tax the world indirectly, through inflation. It did not
enforce the direct payment of taxes like all of its predecessor empires did, but distributed instead its own fiat currency, the U.S.
Dollar, to other nations in exchange for goods with the intended consequence of inflating and devaluing those dollars and paying
back later each dollar with less economic goods-the difference capturing the U.S. imperial tax. Here is how this happened.
Early in the 20th century, the U.S. economy began to dominate the world economy. The U.S. dollar was tied to gold, so that the value
of the dollar neither increased, nor decreased, but remained the same amount of gold. The Great Depression, with its preceding
inflation from 1921 to 1929 and its subsequent ballooning government deficits, had substantially increased the amount of currency in
circulation, and thus rendered the backing of U.S. dollars by gold impossible. This led Roosevelt to decouple the dollar from gold
in 1932. Up to this point, the U.S. may have well dominated the world economy, but from an economic point of view, it was not an
empire. The fixed value of the dollar did not allow the Americans to extract economic benefits from other countries by supplying
them with dollars convertible to gold.
Economically, the American Empire was born with Bretton Woods in 1945. The U.S. dollar was not fully convertible to gold, but was
made convertible to gold only to foreign governments. This established the dollar as the reserve currency of the world. It was
possible, because during WWII, the United States had supplied its allies with provisions, demanding gold as payment, thus
accumulating significant portion of the world's gold. An Empire would not have been possible if, following the Bretton Woods
arrangement, the dollar supply was kept limited and within the availability of gold, so as to fully exchange back dollars for gold.
However, the guns-and-butter policy of the 1960's was an imperial one: the dollar supply was relentlessly increased to finance
Vietnam and LBJ's Great Society. Most of those dollars were handed over to foreigners in exchange for economic goods, without the
prospect of buying them back at the same value. The increase in dollar holdings of foreigners via persistent U.S. trade deficits was
tantamount to a tax-the classical inflation tax that a country imposes on its own citizens, this time around an inflation tax that
U.S. imposed on rest of the world.
When in 1970-1971 foreigners demanded payment for their dollars in gold, The U.S. Government defaulted on its payment on August 15,
1971. While the popular spin told the story of "severing the link between the dollar and gold", in reality the denial to pay back in
gold was an act of bankruptcy by the U.S. Government. Essentially, the U.S. declared itself an Empire. It had extracted an enormous
amount of economic goods from the rest of the world, with no intention or ability to return those goods, and the world was powerless
to respond- the world was taxed and it could not do anything about it.
From that point on, to sustain the American Empire and to continue to tax the rest of the world, the United States had to force the
world to continue to accept ever-depreciating dollars in exchange for economic goods and to have the world hold more and more of
those depreciating dollars. It had to give the world an economic reason to hold them, and that reason was oil.
In 1971, as it became clearer and clearer that the U.S Government would not be able to buy back its dollars in gold, it made in
1972-73 an iron-clad arrangement with Saudi Arabia to support the power of the House of Saud in exchange for accepting only U.S.
dollars for its oil. The rest of OPEC was to follow suit and also accept only dollars. Because the world had to buy oil from the
Arab oil countries, it had the reason to hold dollars as payment for oil. Because the world needed ever increasing quantities of oil
at ever increasing oil prices, the world's demand for dollars could only increase. Even though dollars could no longer be exchanged
for gold, they were now exchangeable for oil.
The economic essence of this arrangement was that the dollar was now backed by oil. As long as that was the case, the world had to
accumulate increasing amounts of dollars, because they needed those dollars to buy oil. As long as the dollar was the only
acceptable payment for oil, its dominance in the world was assured, and the American Empire could continue to tax the rest of the
world. If, for any reason, the dollar lost its oil backing, the American Empire would cease to exist. Thus, Imperial survival
dictated that oil be sold only for dollars. It also dictated that oil reserves were spread around various sovereign states that
weren't strong enough, politically or militarily, to demand payment for oil in something else. If someone demanded a different
payment, he had to be convinced, either by political pressure or military means, to change his mind.
The man that actually did demand Euro for his oil was Saddam Hussein in 2000. At first, his demand was met with ridicule, later with
neglect, but as it became clearer that he meant business, political pressure was exerted to change his mind. When other countries,
like Iran, wanted payment in other currencies, most notably Euro and Yen, the danger to the dollar was clear and present, and a
punitive action was in order. Bush's Shock-and-Awe in Iraq was not about Saddam's nuclear capabilities, about defending human
rights, about spreading democracy, or even about seizing oil fields; it was about defending the dollar, ergo the American Empire. It
was about setting an example that anyone who demanded payment in currencies other than U.S. Dollars would be likewise punished.
Many have criticized Bush for staging the war in Iraq in order to seize Iraqi oil fields. However, those critics can't explain why
Bush would want to seize those fields-he could simply print dollars for nothing and use them to get all the oil in the world that he
needs. He must have had some other reason to invade Iraq.
History teaches that an empire should go to war for one of two reasons: (1) to defend itself or (2) benefit from war; if not, as
Paul Kennedy illustrates in his magisterial The Rise and Fall of the Great Powers, a military overstretch will drain its economic
resources and precipitate its collapse. Economically speaking, in order for an empire to initiate and conduct a war, its benefits
must outweigh its military and social costs. Benefits from Iraqi oil fields are hardly worth the long-term, multi-year military
cost. Instead, Bush must have went into Iraq to defend his Empire. Indeed, this is the case: two months after the United States
invaded Iraq, the Oil for Food Program was terminated, the Iraqi Euro accounts were switched back to dollars, and oil was sold once
again only for U.S. dollars. No longer could the world buy oil from Iraq with Euro. Global dollar supremacy was once again restored.
Bush descended victoriously from a fighter jet and declared the mission accomplished-he had successfully defended the U.S. dollar,
and thus the American Empire.
II. Iranian Oil Bourse
The Iranian government has finally developed the ultimate "nuclear" weapon that can swiftly destroy the financial system
underpinning the American Empire. That weapon is the Iranian Oil Bourse slated to open in March 2006. It will be based on a
euro-oil-trading mechanism that naturally implies payment for oil in Euro. In economic terms, this represents a much greater threat
to the hegemony of the dollar than Saddam's, because it will allow anyone willing either to buy or to sell oil for Euro to transact
on the exchange, thus circumventing the U.S. dollar altogether. If so, then it is likely that almost everyone will eagerly adopt
this euro oil system:
· The Europeans will not have to buy and hold dollars in order to secure their payment for oil, but would instead pay with their own
currencies. The adoption of the euro for oil transactions will provide the European currency with a reserve status that will benefit
the European at the expense of the Americans.
· The Chinese and the Japanese will be especially eager to adopt the new exchange, because it will allow them to drastically lower
their enormous dollar reserves and diversify with Euros, thus protecting themselves against the depreciation of the dollar. One
portion of their dollars they will still want to hold onto; a second portion of their dollar holdings they may decide to dump
outright; a third portion of their dollars they will decide to use up for future payments without replenishing those dollar
holdings, but building up instead their euro reserves.
· The Russians have inherent economic interest in adopting the Euro - the bulk of their trade is with European countries, with
oil-exporting countries, with China, and with Japan. Adoption of the Euro will immediately take care of the first two blocs, and
will over time facilitate trade with China and Japan. Also, the Russians seemingly detest holding depreciating dollars, for they
have recently found a new religion with gold. Russians have also revived their nationalism, and if embracing the Euro will stab the
Americans, they will gladly do it and smugly watch the Americans bleed.
· The Arab oil-exporting countries will eagerly adopt the Euro as a means of diversifying against rising mountains of depreciating
dollars. Just like the Russians, their trade is mostly with European countries, and therefore will prefer the European currency both
for its stability and for avoiding currency risk, not to mention their jihad against the Infidel Enemy.
Only the British will find themselves between a rock and a hard place. They have had a strategic partnership with the U.S. forever,
but have also had their natural pull from Europe. So far, they have had many reasons to stick with the winner. However, when they
see their century-old partner falling, will they firmly stand behind him or will they deliver the coup de grace? Still, we should
not forget that currently the two leading oil exchanges are the New York's NYMEX and the London's International Petroleum Exchange
(IPE), even though both of them are effectively owned by the Americans. It seems more likely that the British will have to go down
with the sinking ship, for otherwise they will be shooting themselves in the foot by hurting their own London IPE interests. It is
here noteworthy that for all the rhetoric about the reasons for the surviving British Pound, the British most likely did not adopt
the Euro namely because the Americans must have pressured them not to: otherwise the London IPE would have had to switch to Euros,
thus mortally wounding the dollar and their strategic partner.
At any rate, no matter what the British decide, should the Iranian Oil Bourse accelerate, the interests that matter-those of
Europeans, Chinese, Japanese, Russians, and Arabs-will eagerly adopt the Euro, thus sealing the fate of the dollar. Americans cannot
allow this to happen, and if necessary, will use a vast array of strategies to halt or hobble the operation's exchange:
· Sabotaging the Exchange-this could be a computer virus, network, communications, or server attack, various server security
breaches, or a 9-11-type attack on main and backup facilities.
· Coup d'état-this is by far the best long-term strategy available to the Americans.
· Negotiating Acceptable Terms & Limitations-this is another excellent solution to the Americans. Of course, a government coup is
clearly the preferred strategy, for it will ensure that the exchange does not operate at all and does not threaten American
interests. However, if an attempted sabotage or coup d'etat fails, then negotiation is clearly the second-best available option.
· Joint U.N. War Resolution-this will be, no doubt, hard to secure given the interests of all other member-states of the Security
Council. Feverish rhetoric about Iranians developing nuclear weapons undoubtedly serves to prepare this course of action.
· Unilateral Nuclear Strike-this is a terrible strategic choice for all the reasons associated with the next strategy, the
Unilateral Total War. The Americans will likely use Israel to do their dirty nuclear job.
· Unilateral Total War-this is obviously the worst strategic choice. First, the U.S. military resources have been already depleted
with two wars. Secondly, the Americans will further alienate other powerful nations. Third, major dollar-holding countries may
decide to quietly retaliate by dumping their own mountains of dollars, thus preventing the U.S. from further financing its militant
ambitions. Finally, Iran has strategic alliances with other powerful nations that may trigger their involvement in war; Iran
reputedly has such alliance with China, India, and Russia, known as the Shanghai Cooperative Group, a.k.a. Shanghai Coop and a
separate pact with Syria.
Whatever the strategic choice, from a purely economic point of view, should the Iranian Oil Bourse gain momentum, it will be eagerly
embraced by major economic powers and will precipitate the demise of the dollar. The collapsing dollar will dramatically accelerate
U.S. inflation and will pressure upward U.S. long-term interest rates. At this point, the Fed will find itself between Scylla and
Charybdis-between deflation and hyperinflation-it will be forced fast either to take its "classical medicine" by deflating, whereby
it raises interest rates, thus inducing a major economic depression, a collapse in real estate, and an implosion in bond, stock, and
derivative markets, with a total financial collapse, or alternatively, to take the Weimar way out by inflating, whereby it pegs the
long-bond yield, raises the Helicopters and drowns the financial system in liquidity, bailing out numerous LTCMs and hyperinflating
the economy.
The Austrian theory of money, credit, and business cycles teaches us that there is no in-between Scylla and Charybdis. Sooner or
later, the monetary system must swing one way or the other, forcing the Fed to make its choice. No doubt, Commander-in-Chief Ben
Bernanke, a renowned scholar of the Great Depression and an adept Black Hawk pilot, will choose inflation. Helicopter Ben, oblivious
to Rothbard's America's Great Depression, has nonetheless mastered the lessons of the Great Depression and the annihilating power of
deflations. The Maestro has taught him the panacea of every single financial problem-to inflate, come hell or high water. He has
even taught the Japanese his own ingenious unconventional ways to battle the deflationary liquidity trap. Like his mentor, he has
dreamed of battling a Kondratieff Winter. To avoid deflation, he will resort to the printing presses; he will recall all helicopters
from the 800 overseas U.S. military bases; and, if necessary, he will monetize everything in sight. His ultimate accomplishment will
be the hyperinflationary destruction of the American currency and from its ashes will rise the next reserve currency of the
world-that barbarous relic called gold.
Jan Rasmussen