Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse

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posted on Aug, 14 2005 @ 02:19 PM
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William Clark won several web awards in 2003 for his article entitled "The Real Reasons for the Upcoming War With Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken Truth".

In this latest article he discusses the real reason behind the upcomming war with Iran.



Energy Bulletin
Contemporary warfare has traditionally involved underlying conflicts regarding economics and resources. Today these intertwined conflicts also involve international currencies, and thus increased complexity. Current geopolitical tensions between the United States and Iran extend beyond the publicly stated concerns regarding Iran’s nuclear intentions, and likely include a proposed Iranian “petroeuro” system for oil trade.

Similar to the Iraq war, military operations against Iran relate to the macroeconomics of ‘petrodollar recycling’ and the unpublicized but real challenge to U.S. dollar supremacy from the euro as an alternative oil transaction currency.

... Saddam Hussein sealed his fate when he announced in September 2000 that Iraq was no longer going to accept dollars for oil being sold under the UN’s Oil-for-Food program, and decided to switch to the euro as Iraq’s oil export currency.

... original pre-war hypothesis was validated in a Financial Times article dated June 5, 2003, which confirmed Iraqi oil sales returning to the international markets were once again denominated in U.S. dollars – not euros.

It is now obvious the invasion of Iraq had less to do with any threat from Saddam’s long-gone WMD program and certainly less to do to do with fighting International terrorism than it has to do with gaining strategic control over Iraq’s hydrocarbon reserves and in doing so maintain the U.S. dollar as the monopoly currency for the critical international oil market.

Iran is about to commit a far greater “offense” than Saddam Hussein's conversion to the euro for Iraq’s oil exports in the fall of 2000. Beginning in March 2006, the Tehran government has plans to begin competing with New York's NYMEX and London's IPE with respect to international oil trades – using a euro-based international oil-trading mechanism.

The proposed Iranian oil bourse signifies that without some sort of US intervention, the euro is going to establish a firm foothold in the international oil trade. Given U.S. debt levels and the stated neoconservative project of U.S. global domination, Tehran’s objective constitutes an obvious encroachment on dollar supremacy in the crucial international oil market.


Please visit the link provided for the complete story.


Make no mistake, when the Petrodollar and dollar hegemony are on the line history gets made and Iran is now in the crosshairs.
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edit: source link

[edit on 8/14/2005 by Gools]




posted on Aug, 25 2005 @ 05:45 PM
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140 views and no comments?

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posted on Aug, 25 2005 @ 10:02 PM
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I have read this twice and still cannot conjure up a response. Perhaps others feel the same.



posted on Aug, 25 2005 @ 10:28 PM
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Of course Bush and Co. would like to kick Iran's teeth in for their economic ploys, but unfortunately they can't do anything about the situation except get hot under the collar. Military options against Iran are very slim.

Overt action - no chances.

1 - Unacceptable to US public which already has grave misgivings over Iraq debacle.

2 - Inability to secure any semblance of international backing for adventures in Persia after Iraq WMD BS. They wouldn't even be able to get laughing girl (Rice) to try and make UN case for it.

3 - No forces. US military totally committed in Iraq and Afghanistan.

This only leaves the availabilty of covert action. However, covert action has its inherent risks because Iran can retaliate covertly against US interests in Iraq and Afghanistan to a great extent. Iran has more inroads with Iraqis and Afghanis than the US has, the borders are wide open for smuggling weapons and materiale and agents. Essentially, Iran is able to hold the US hostage in the region.

Dr. Strangelove (Rumsfeld) is already claiming that Iran is covertly assisting Iraqi insurgents by providing AP IEDs (are they really improvised, then? 0_o). Whether or not this is truth or propaganda against Iran is unknown. However, if it's truth it's essentially a small taste of what Iran could deliver to US forces in Iraq.

Analysis: The US would like to deliver swift kick in the pants to Iran, however they are unable to do so at this time. Iran has all the cards in the game right now and as long as they play them right they can write their own check.



posted on Aug, 26 2005 @ 08:19 AM
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Originally posted by Jeremiah_John
1 - Unacceptable to US public which already has grave misgivings over Iraq debacle.

Orchester another terrorist attack, a big one, perhaps a dirty nuke in some mid-sized city.


Originally posted by Jeremiah_John
2 - Inability to secure any semblance of international backing for adventures in Persia after Iraq WMD BS. They wouldn't even be able to get laughing girl (Rice) to try and make UN case for it.

Blah, who cares about foreign relations. Answer to problem 1 COULD also work here.


Originally posted by Jeremiah_John
3 - No forces. US military totally committed in Iraq and Afghanistan.

Compulsory military draft for everyone that is 16 (or 18) or older, men and women.
Oh, and keep the Mexican border virtually open, then force illegal aliens to choose between being deported or joining the US military.
Or declare martial law after the orchestrated terrorist attack and put everybody who doesn't want to join the military and fight for the US in one of those FEMA concentration camps and say they are unpatriotic traitors and terrorists. Many will rather join the military than get thrown in a concentration camp.


Problem solved, let's invade Iran!


[edit on 26/8/2005 by SwearBear]



posted on Aug, 26 2005 @ 10:10 AM
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US military action against Iran will be akin to sticking ones hand in a nest of African killer bees, shaking it around, then running off and hoping the angry swarm doesn't catch up with you.

i.e. political, economical and military suicide.

[edit on 26-8-2005 by uknumpty]



posted on Aug, 29 2005 @ 11:31 PM
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Originally posted by SwearBear
US in one of those FEMA concentration camps and say they are unpatriotic traitors and terrorists. Many will rather join the military than get thrown in a concentration camp.


Problem solved, let's invade Iran!


[edit on 26/8/2005 by SwearBear]


The conspiracies that some people believe.......


Can you show me ONE? Not some alex jones militia camp in rural Mississippi but and actual camp? Does it have rail access?



posted on Aug, 29 2005 @ 11:39 PM
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How can one disagree with the Energy Source. That's not news it's been suggested a lot, even by myself months ago.

But we could be interfering with ATS rules here as it may very well end up as being seen or expanded into a political bash - something I can no longer due being a Member of ATS.

Dallas



posted on Aug, 30 2005 @ 07:55 PM
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Well if you believe that the moneyed interests are only Republican or only Democratic, then yeah this could turn into a political bickering thread. (What the staff is trying to do isn't to stifle people’s posting, it's not letting partisan bickering and labels interfere with other discussions - like this one.
/offtopic)

I don't think it matters one iota what people's personal "politics" are or what political party is in control in any country when the real powers that be are threatened.

The establishment of a Euro-based oil bourse is a history-changing event placing Petrodollar hegemony at risk.

The point of the post was to alert my fellow members to what is probably the real reason to target Iran as opposed to the lies that will inevitably be fed to us IMO (watch for those
).

So... will action be taken pre-emptively before March 2006 or after in retaliation?

Should action be taken at all?
Should Iran be allowed to do as it pleases with its oil?
Should good old capitalist "free market economics" be allowed to operate?

That date now looms large in my mind.
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PS: Concentration camps are not the topic here.
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posted on Aug, 31 2005 @ 01:35 AM
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Im sure airstrikes on these installations are still within our ability, i sont think its ability as much as support. As you said people are upset over iraq, now is not a good time to start another war.



posted on Oct, 3 2005 @ 07:45 PM
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It looks like Venezuela may be getting ready for the move to the Euro:

Venezuela Dumps All of it's US Securities
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posted on Oct, 3 2005 @ 07:49 PM
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It's an interesting idea, but we have yet to see Venezuela being invaded, despite Chavez' view that the US was training to do so, as he announced a few weeks ago.

I would say invasion seems like a high price to pay for maintaining the status quo vis a vis petrodollars, considering how China and Japan have us by the balls when it comes to the dollar regardless of how many billions of dollars and human lives we throw at the middle east.

That said, this is the most plausible of the "alternative" theories for war with Iraq that i've heard, so it could well apply to Iran also, assuming it applies at all.

-koji K.



posted on Oct, 9 2005 @ 04:56 PM
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Uhm, does Russia and China (definitely China) not have LARGE agreements with Iran for oil/gas supply.

They would be mighty pissed if their supply was interupted or terminated...


Link for Iran-China
www.atimes.com...

same from different source

www.energybulletin.net...


An article really looking at the whole political manouvering post 2001 with US, Iran, Russia and China:

www.wsws.org...

Well worth a read (read on past the first bit, its not particularly relevant)

[edit on 9-10-2005 by kilcoo316]



posted on Nov, 13 2005 @ 05:29 PM
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Could someone explain to me what would happen if Iran started trading oil in euros? I mean what would happen to the price of oil and gas and our economy in the US?



posted on Nov, 13 2005 @ 08:24 PM
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Originally posted by Thatoneguy
Could someone explain to me what would happen if Iran started trading oil in euros? I mean what would happen to the price of oil and gas and our economy in the US?


Since oil is purchase in US$, and everybody is buying oil, that means there is an increased demand for US$.

If tomorrow oil start to be trade in Euro (or some meaningful portion of it), then the demand for US$ will decrease and since the US$ is running a huge deficit (they need to be bailed out at a rate of $1.5 billion per day), then I think this will force the devaluation of the US$ (I read somewhere 25%).

In all respect, it will be serious.



posted on Nov, 14 2005 @ 12:10 AM
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Originally posted by Thatoneguy
Could someone explain to me what would happen if Iran started trading oil in euros? I mean what would happen to the price of oil and gas and our economy in the US?


I would say it would sky rocket, but thats just my opinion.



posted on Nov, 14 2005 @ 02:52 PM
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Oil in Euros versus US$.

I think it would make much less of a difference than people believe.

The Euro/US$ currency pair is extremely heavily traded and is the most liquid financial transaction in the world.

If you have capital, you could as a retail trader open an account at Interactive Brokers

and probably put on 20-50 million euro/dollar trades with a few clicks. They typically show "size" of 2-5 million on each side (bids and asks), but they are refilled
very quickly so real depth is larger still.

If you are bigger, and have accounts at major banks, you can do a billion with a phone call and half an hour.

Seriously---if an exchange prices oil in euros, then somebody could, and certainly would, extremely easily come up with a synthetic instrument which includes the crude (in euros) oil future combined with a paired dollar/euro forward/future. Also, the US$ denominated oil markets, in New York and London, will still be there, and there will be arbitrage between them.

(A forward is a currency transaction which clears at a future date, instead of now).

There are lots of things to worry about with oil. The currency it is priced in is not relevant as long as it is highly liquid and universally available. Both dollars and euros work here, they are nearly interchangable.

Consumers whose fixed prices are in euros (e.g. european oil refiners/consumers) would prefer euros. Those whose fixed prices more closely follow the dollar would prefer the dollar. So far Saudi Arabia fixes its currency to the US$, so they prefer dollars.

The other argument that pricing oil here and there will change the overall currency of reserves that people hold doesn't seem to be major either. Private institutions choose currencies to hold based primarily interest rates (who pays more), and this is the primary determination of currency trends. Central banks have other, political reasons and they are obscure, but for the most part the current policies support the dollar.

Interest rates will have more to do with the dollar than the currency oil is priced in, assuming it doesn't get priced in Elbonian goatshoes.



posted on Nov, 21 2005 @ 04:52 PM
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So why do countries promptly get into such political ( sometimes burning) warm water when they talk about switching to Euro trading? Are you suggesting that it is a big deal economically but that the US is in such dire straits that a full change would not hurt it far more than it is now? The volume of oil is but a small piece of it as most countries are forced to keep large reserves just to war of speculation against their currency. This is another tactic used to keep countries buying usd and with the simple excuse that countries with small oil reserves and not much usd reserves can not ward of hard times when oil prices rise...

Not fully sure where your heading so do clarify...

Stellar



posted on Nov, 21 2005 @ 06:24 PM
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Originally posted by mbkennel
The currency it is priced in is not relevant as long as it is highly liquid and universally available. Both dollars and euros work here, they are nearly interchangable.


I could not disagree more. It's fundamentally about power and control and the way the American economy is built.

One needs to understand the role of the "petrodollar" and "dollar hegemony" in the world economy to see why a challenger to the petrodollar will have far reaching consequences.

Some easily found background:

- Everyone accepts dollars in their reserves because you can buy oil in dollars.

- Every country that buys oil therefore needs dollars.

- The fact that all central banks keep US dollars inflates the value of the dollar beyond what a "free" market would assign to it.



Trade between nations has become a cycle in which the U.S. produces dollars and the rest of the world produces things that dollars can buy.

Nations no longer trade to capture comparative advantage but rather to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves in order to sustain the exchange value of their domestic currencies. In an effort to prevent speculative and potentially harmful attacks on their currencies, those nations' central banks must acquire and hold dollar reserves in amounts corresponding to their own currencies in circulation. This creates a built-in support for a strong dollar that in turn forces the world's central banks to acquire and hold even more dollar reserves, making the dollar stronger still.

This phenomenon is known as "dollar hegemony," which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil.

The reality is that the strength of the dollar since 1945 rests on being the international reserve currency for global oil transactions (i.e., "petro-dollar"). The U.S. prints hundreds of billions of these fiat petro-dollars, which are then used by nation states to purchase oil and energy from OPEC producers... . These petro-dollars are then re-cycled from OPEC back into the U.S. via Treasury Bills or other dollar-denominated assets such as U.S. stocks, real estate, etc. The recycling of petro-dollars is the price the U.S. has extracted since 1973 from oil-producing countries for U.S. tolerance of the oil-exporting cartel. [the US - Saudi deal]

Dollar reserves must be invested in U.S. assets which produces a capital-accounts surplus for the U.S. economy.

Since it is the U.S. that prints the petro-dollars, they control the flow of oil. Period. When oil is denominated in dollars through U.S. state action and the dollar is the only fiat currency for trading in oil, an argument can be made that the U.S. essentially owns the world's oil for free. - source - several good essays on this topic!


That capital accounts surplus created by dollar hegemony is currently offsetting the record fiscal and trade deficits of the US economy.

All of this means that the value of the US dollar is artificially inflated because of the FED's role as middle-man in the exchange of goods for oil and something called Seigniorage (the revenue derived from the issuance of currency - not sure I understand this bit).

The arrival of a new middle-man to end the monopoly enjoyed by the US is a very significant event.

The US is facing a global shift in economic power which is why I think the timing of the announcement the stop publishing M3 in March will facilitate intervention of the Plunge Protection Team to try and prop-up the dollar.

Does this description sound earily familiar?



The Pound Sterling was the primary reserve currency of much of the world in the 18th and 19th centuries. But perpetual current account and fiscal deficits financed by cheap credit and unsustainable monetary and fiscal policies to finance wars and colonial ambitions eventually led to the pound sinking.


That was before the oil based economy took over our lives.

The only thing propping up the US economy right now is the petrodollar and dollar hegemony IMO.

Whether or not the US succeeds in maintaining dollar hegemony with the existance of a Euro based oil exchange remains to be seen. (don't bet on it
)

Wars are fought for such power and control.
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posted on Nov, 22 2005 @ 01:49 PM
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Originally posted by Rikimaru
Im sure airstrikes on these installations are still within our ability, i sont think its ability as much as support. As you said people are upset over iraq, now is not a good time to start another war.


Election is over, who cares what the people think? The military is in control now that they have the $$$. And the military doesn't know how to make peace. Bush is just a puppet (with a lot more $ than any previous business venture proftis) cheney too.
I thought we had our crosshairs on syria next. What does Sharon's stepping down fit into the picture? The more bombs we use, (old stockpile crap anyways) the better the profit for the perpetual war machine. Commerce of arms is more beneficial than the oil industry anyways. maybe.





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