Petroeuros and The War on Terror
By Grady Hawkins
President George W. Bush and his close cabal of neo-con advisors have long been explaining their ‘real reasons’ for fighting the global War on terror. And these reasons are of noble intent, to make it easier for an American population with a limited attention span to accept and swallow. The first reason was of course, the infamous and equally ubiquitous ‘Weapons of Mass Destruction’. No phrase in the history of American literature, language and journalism has been more abused than this has. Adolph Hitler observed that all one had to do was repeat a concept, idea, or just plain lie long enough and loud enough and it will become the truth. WMD’s are now an inseparable part of our daily life and language, and they have become for many Americans, the accepted truth.
Most Americans are certain that the next terrorist attack (not if, but when) will be another military style type attack more lethal than September 11th.
Terrorist of every sex, color and creed need, want, have, want to have, want to buy, want to make, want to rent, Russian, Chinese, Pakistani, North Korean, European, Iranian nuclear, biological, and chemical Weapons of Mass Destruction to deliver a lethal gas, virus or mushroom cloud within forty-five minutes to the Homeland via frogman, airman, submarine, or drone. Every talking head on the right is predicting your being blown to bits or attacked by some 21st century version of the Andromeda Strain every chance they get. All designed to frighten and stampede the general population into accepting whatever nonsense the administration is spewing forth this week or the next.
But does it all have to be so complicated? What would happen if all of those freedom hating terrorists just passed the buck, literally?
As always, here at Alt Press, it’s a matter of following the money. In the case of this article, the money we will be following happens to be the Euro. More specifically, we will look at how a little ol’ oil producing country in the Mideast named Iraq, is considering starting their own oil market. They’re also considering trading their “Texas tea” in Euros as opposed to the once almighty American buck. This move, if it happens, could have some not-so-nice consequences, folks.
Saddam’s Worst Sin
The image is now permanently burned into every American’s mind. Saddam had WMD’s or wanted them, Saddam was a threat to the region, he gassed his own people, He was an evil dictator who had to go, he had ties to terrorists, and he masterminded the attacks on 9-11.
But Saddam Hussein did something far worse than any of these things. In the fall of 2000, he converted from the U.S. dollar to the Euro for Iraq’s oil exports. If you wanted his oil, you had to pay in Euros, not greenbacks. For this, he paid dearly. Few Americans know that shortly after the Fall of Baghdad, Iraq quietly converted back to the dollar. A June 5th, 2003, article in the Financial Times, confirmed that Iraqi oil sales were, indeed, returning to the international markets in dollars, not Euros.
The Iranian Bourse
Tehran now appears poised to commit this ultimate sin. And the conversion to the Euro is not the worst sin of all. The Iranians want to set-up their own oil trading market or “bourse” (the word bourse comes from the French stock exchange in Paris; the Federation Internationale des Bourses de Valeurs) and compete directly with the United States. They would then be competing with the well-established New York Mercantile exchange (NYMEX) and the London based International Petroleum Exchange (IPE). It should be understood that though based in the United Kingdom, the IPE is an American concern. In 2001, it was bought out by a group including Goldman Sachs and Morgan Stanley. These two financial giants could lose millions if the Iranian bourse comes on line.
The IPE has not, thus far, made any public comment on this situation.
The Iranian bourse was expected to be up and running on March 21st of this year, but reports now indicate that it will be postponed for at least six months.
Iran’s largest single trading partner is the European Union, so it does make sense for them to want to make the switch to the Euro.
The idea of a Mideast rival Persian Gulf blend contract is not a new one. Dubai recently tried to develop an oil trading market, but it failed. Iran should fare much better as it exports 2.7 million barrels of oil per day.
Israel is still Iran’s number one enemy, and a close second is Israel’s biggest sponsor, the United States. Iranian paranoia might be behind the move to the Euro. All Tehran would have to do to hit the American dollar hard would be to ask the world, would you want to buy oil at $57.00 a barrel in U.S. dollars or buy them at 40 or 50 Euros?
Russia to Follow?
The March 18th issue of the Asia Times featured a rather long article in which it is alleged that Russian President Valdimir Putin is considering the move to the petroeuro. Like Iran, Russia’s largest trading partner is also the European Union. The year 2005 will be significant For the Russians. Moscow will become the world’s number one petroleum exporter, finally outpacing Saudi Arabia. Inasmuch as Europe is Russia’s number one trading partner, switching to the Euro may seem long overdue. But the ex-KGB Putin may also be relishing a chance to hit back at the United States. He is consolidating power back to Moscow, and desperately wants to become a major player on the world stage. His conversion to the Euro would hurt the dollar even more. And there is absolutely nothing the United States can do about it. President Bush’s soul mate in the war on terror is about to give back the ring. Fighting the ‘war on terror’ is good, but giving the Americans a bloody nose and making some money at the same time may be better.
Venezuela as Well??
Hugo Chavez recently purchased 100,000 AK-47’s and 50 brand new Mig-29 fighter aircraft. Members of the Chavez government have told Washington directly that if anything at all should happen to Chavez, Caracas will stop selling its oil to the United States. Given the notorious reputation of our Central Intelligence Agency in Central and South America, this could be a disaster. Chavez could trip over one of his kid’s roller skates, fall down his stairs and everyone will assume that Langley was behind it. Chavez’s paranoia might be justified. The US can’t invade Venezuela, but it can attempt a coup and replace him with someone a little more friendly to US interests.
Another little known fact is that the government Venezuela has a controlling interest in Houston-based oil giant Citgo. In yet another move aimed at consolidating his power, Chavez recently deposed Citgo President Luis Marin, in favor of an outspoken supporter of his, the little known, Felix Rodríguez. The move has many people in Houston a bit on edge over the oil giant’s future in that city.
Houston? We’ve Got A Problem According to a recent article in the Houston Chronicle: “Rodríguez has yet to appear in Houston, where local leaders are eagerly seeking any clues about Citgo’s new leader.The big speculation is about a possible sale of all or part of Citgo, which is now at the center of Venezuela’s political whirlwind. Rodríguez was not available for comment, despite repeated interview requests.”
It appears that Chavez is contemplating making the change to the Euro as well. So it looks a bit shaky for Houston and perhaps even the United States, as a whole.
It would seem that the rest of the world has found a way to fight back against US imperialism, without firing a shot. If the major oil producers convert to the Euro, collapse of the dollar could soon follow. The deficits that the administration discounts (deficits don’t matter!!) could now be the greatest enemy ever seen. Red China and Japan hold billions in US treasury bonds. If the dollar begins to fall as a result of conversion, they could begin to unload their dollars, and the rest of the world to follow. After the financial dust clears, the dollar would be looking up at the Canadian dollar.
Congresswoman Louise Slaughter, during an appearance on The News Room radio show, shared her concern over the ballooning deficit with China: “The truth is that, I stay awake nights thinking, what would we do if China decided it wanted to pull out? Because they could just do it unilaterally. It’s still a communist country. They can make quick decisions, and we don’t worry nearly enough about their military buildup and the fact that we’re going to be competing with both China and India for what oil supplies there are and that they are carrying all this debt for us.”
Meanwhile Back in The Middle East
The possibility of an Iranian conversion to the Euro only increases tensions in the region even more than believed possible. Israeli media had recently revealed the Tel Aviv’s intention to buy two additional Dolphin class submarines from the German government, to add to the three already in service. These subs are armed with nuclear tipped harpoon cruise missiles, and can hit targets from a distance of up to 1,200 kilometers. That would include Tehran if launched submerged from the Persian Gulf. We at Alt have learned that the Israeli Navy is using forward operating bases in the Dahlak archipelago at the mouth of the Red Sea near Asmara, Eritira. We also know that the Iranians have taken the small island of Abu Musa in the mouth of the Strait of Hormuz. The sea lane here is a narrow S- curve just 35 miles wide. The Iranians have deployed dozens of the highly lethal Sunburn cruise missile on this island. Any attack or hostile violation of Iranian airspace could see the Iranians shooting a volley of ship- to- ship- missiles and thus closing the straights until they see fit to open them. And driving up the price of oil even higher.
We have all been predicting an attack of some kind for some time, but no one considered a financial assault instead of a military one.
The first casualty would be the dollar, according to an article in The Atlanta Journal Constitution, some experts fear that the dollar could possibly suffer as much as a 40% drop in value.
The second would be the American way of life.
On the bright side, the drama over the lack of toilet at the Rath Building would probably not garner national headlines anymore. If the petroeuro crisis does indeed, come to pass, Buffalo would no longer be the laughing stock that it is, the whole damn country would be.
