Threat to the U.S.: Irans
"nukes" or the Euro?
AlJazeera.com
3/24/2005
Iran's nuclear projects, alleged WMD's, or its supposed
support of "terrorist organisations" as the Bush administration
claims does not pose a threat to Washington. What does pose as a
threat is Iran's attempt to re-shape the global economical system
by converting it from a petro-dollar to a petro-euro system.
Such a conversion is looked upon as a flagrant declaration of
economical war against the U.S. which would flatten the revenues
of the American corporations and could eventually cause an
economic collapse.
In June 2004, Iran declared its intention in setting up an
international oil exchange (a bourse) denominated in the Euro
currency. Many oil-producing as well as oil-consuming countries
had expressed their welcome to such petro-euro bourse.
According to Iranian reports this bourse is due to start
trading in early 2006. Naturally such an oil exchange would
compete against London's International Petroleum Exchange (IPE),
as well as against the New York Mercantile Exchange (NYMEX), both
owned by American corporations.
Oil consuming countries have no choice but to use the American
Dollar in order to purchase their oil, since the dollar has so
far been the global standard monetary fund for oil exchange. This
in turn requires these countries to keep the dollar in their
central banks as their reserve fund, therefore 'helping' in
strengthening the American economy.
However, if Iran, followed by other oil-producing countries,
begins to accept the Euro as another choice for oil exchange the
American economy would suffer greatly, what many would call 'a
real crisis'.
A 'crisis' such as this could be witnessed as early as the end
of 2005 and beginning of 2006 when oil investors would have the
choice to pay $57 a barrel of oil at the American (NYMEX) and at
London's (IPE), or pay 37 Euros a barrel at the Iranian oil
bourse.
Such a choice would reduce trade volumes at both the
Dollar-dependent NYMEX and the IPE.
Many countries have studied the conversion from the ever
weakening petro-dollar to the gradually strengthening petro-euro
system. The de-valuation of the dollar was caused by the American
economy shying away from manufacturing local products, except
those of the military, by outsourcing American jobs to cheaper
developing countries and depending only on the general service
sector, and by the huge cost of two major wars that are still
going on.
What's more, foreign investors have started to withdraw their
money from the shaky American market causing further devaluation
of the dollar.
Any keen follower of financial markets would not have failed
to notice that the devaluation of the U.S. dollar began since
November 2002, while the purchasing power of the Euro has slowly,
but surely crept upward. The U.S. dollar has also dropped in
value in comparison to the Japanese Yen while the British pound
climbed another notch.
Economic reports published early March pointed at the
nose-dive the American economy has taken and to the quick rise of
the deficit, up to $665.90 billion at the end of 2004. The worst
is still to come.
These numbers worried international banks, who'd warned the
Bush administration of something like this would happen.
Iran is treading the same economical war path Saddam Hussein
started when in 2000 he converted all of the Iraq's reserve from
the dollar to the Euro, and demanded payments in Euro for Iraqi
oil.
Many economists then mocked Saddam because he had lost a lot
of money in this conversion. Yet they were very surprised when he
recuperated his losses in less than a year due to the valuation
of the Euro.
The American administration became aware of the threat when
central banks of many countries started keeping Euros alongside
dollars as their monetary reserve and as an exchange fund for
oil.
In order to avoid an economical collapse the Bush
administration hastened to invade and destroy Iraq under false
excuses so as to set it as an example for any country who may
contemplate dropping the dollar. It was also an attempt to
manipulate OPEC's decisions by controlling the second largest oil
resource - sale of Iraqi oil has since been reverted back to the
petro-dollar standard.
There is only one technical obstacle concerning the use of a
euro-based oil exchange system, which is the lack of a
euro-denominated oil pricing standard, or oil 'marker' as it's
referred to in the industry. The three current oil markers
are U.S. dollar denominated, which include the West Texas
Intermediate crude (WTI), Norway Brent crude, and the UAE Dubai
crude. Yet this did not stop Iran from requiring payments in the
Euro currency for its European and Asian oil exports since spring
2003.
Iran's determination in using the petro-euro is inviting in
other countries such as Russia and Latin American countries, and
even some Saudi investors. This determination has led to the
aggressive American political campaign in using the same excuses
applied against Iraq: WMD in the form of nuclear bomb, support to
"terrorist" Lebanese Hezbollah organization, and threat to the
peace process in the Middle East.
The question now is what will the Bush administration do? Will
it invade Iran as it did Iraq?
The American military is already involved knee-deep in Iraq
and the global community, with the exception of Britain and
Italy, isn't offering any military relief to the U.S.
Hence an American strike against Iran is highly unlikely.
Iran is not Iraq; it has a more robust military power, has
anti-ship missiles based in the "Abu Mousa" island which sits in
the strait of Hermuz at the entrance of the Persian Gulf.
Iran could easily close the strait and block all naval
traffic carrying Gulf oil to the rest of the world causing a
global crisis ratcheting the price of an oil barrel to $100. The
U.S. cannot topple the regime by spreading chaos the same way it
did to Mussadaq's regime in 1953 since the Iranians are now more
aware of such a trick.
Besides Iranians have a patriotic pride of what they call
"their bomb".
What Washington has resorted to is the instigation and
encouragement of Israel, to strike Iran's nuclear reactors the
way it did to Iraq. Leaked reports have revealed that Israeli
forces are training for such an attack expected to take place
next June.
Israel is afraid of an Iranian bomb which would threaten its
military hegemony in the Middle East; would extract Israeli
concessions and create an arms race which would gobble a lot of
Israeli defense expenditure. Furthermore the bomb would force the
U.S. to enter into negotiations with Iran further limiting
Israeli expansion ambitions.
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