Falling into Saddam's Plan

Saddam's decision for Iraq switching to Euros in 2000 for oil trading and national reserve recieved exactly the fallout that the Iraqi dictator knew it would precipitate: commitment of US military to enforce the use of the dollar as the de facto trade currency of the world. This is an extremely dangerous play.

The massive US economy has generated a nation of wealth in which control of the strongest currency in the world has let this country absorb astronomical debt and completely forgo trade parity. A rapid switch of the global economy from US dollars to Euros would cause a US economic implosion of unprecedented scale, and global depression with all its uncertainties and dangerous variables would follow in the wake. This was a direct threat to the United States that was far more dire than any possible WMD. We did not have to respond militarily to safeguard our economy, but Saddam predicted we would, and we did.

Iran's switch to the Euro in 2002 no doubt helped get them on the Axis of Evil list. OPEC talk of switching to trade in Euros was enough to bring the hammer down on the Persian Gulf.

With 80% of the world currency trade dominated by the US dollar, the US seven trillion dollars in debt and a trade deficit running in the order of $450 billion dollars, economic confidence in the dollar must be maintained at all costs. The gambit is US control of the world's most valued commodity and essentially an armed enforcement of the US dollar.

Saddam's tactic was to draw the United States into a war that it cannot afford to win economically and cannot sustain politically. The outing of Ahmed Chalabi as an Iranian spy seemed politically expedient in the light of his failed visions of an Iraq that would welcome liberators, but it suddenly seems quite possible that this convicted bank fraud had every intention of drawing the US into the flytrap.

The possibility of massive US failure in the Gulf is very real. As the insurgency increases, political support for the war decreases in the US republic. Without changing the nature of the republic itself, which could cause massive division domestically, the government through its representatives will lose support for the war until the point that a politician publicly supporting the war is politically untenable. This could be brought about by increased and sustained violence in Iraq, or by an escalation of the war into Iran and other neighboring Gulf states.

By going to war, the US has thrown a pair of dice to determine its economic future. We are at a critical economic juncture entirely dependent on the performance of our military, which in the case of insurgencies has not been historically good. Running a massive military campaign creates too many expenditures for us to shore up the US dollar in other ways, such as effectively resolving the US debt, or priming national industry and technology sectors to shore up the trade deficit.

The US may have made one of the biggest mistakes in US foreign and economic policy by invading Iraq. Success or failure now depends entirely on the success of the Iraqi mission and on the capabilities of our leaders and military. This does not include the possible effects of more US stock scandals or another massive terrorist strike.

When we have a president who cannot pronounce the three-syllable word 'nuclear,' one doesn't feel a lot of confidence. Fortunately, our military is far more capable than our political leaders. Pray for the success of their mission and safe return home. We are in a dangerous situation strategically and economically for at least five more years.

[edit on 13-9-2004 by taibunsuu]