As an economist I would like to put 'paid' to the myth that the US in in Iraq to "get their oil". Tony Blair's argument that "The fact is that,
if the oil that Iraq has were our concern I mean we could probably cut a deal with Saddam tomorrow in relation to the oil."
) is absolutely correct. They did not go in to 'get' Saddam's oil. Neither did they
go in to disarm Iraq of WMD, or to spread democracy, or any of that other stuff.
They went in because Saddam Hussein was refusing to sell his oil in $US. That is why Iran is being threatened now (they too have dropped the $US and
are threatening to begin selling oil in Euros). America doesn't care who Iraq or Iran sells their oil to, but it certainly cares what currency they
use. Why? Because of Dollar Hegemony.
The US dollar has been hegemonous pretty much since 1946 when France (the final holdout) finally signed on to the Bretton Woods Agreement. The dollar
remained hegemonous throughout pretty much the rest of the century, surviving the 'balance of payments' crisis in the '60's, and even surving the
OPEC oil embargo. This is primarily because there was no other currency on the planet that could really take its place.
This is not the case anymore. The USD is not nearly as attractive anymore, now that the US has gone on a devaluing war with China (the latest round
is tariffs! On November 5 the US announced it would impose tariffs against Chinese textiles! Your GWB is one strange bird; he talks free trade out
of one side of his mouth and cries protectionist out of the other!). That means that the only way the USD can remain the hegemonous currency (the
reserve currency of choice, which is America's true economic engine) is if it begins to enforce the currency denomination sections agreed to in the
1974 embargo-ending "US-Saudi Joint Economic Cooperation Agreement", which states that all oil sold on world markets by OPEC nations must be
denominated in USD. Why does the US care? Because if countries around the world are suddenly allowed to buy oil in a currency other than the US
dollar, why would they keep that increasingly feeble currency as their primary reserve? Really, who wants to hold onto a depreciating asset?
The only way now that the USD can remain hegemonous is through the retention of this "oil standard". Because of the hostility of so many members of
the OPEC community (plus the fact that the Euro now represents a strong currency in its own right) the only way this "oil standard" can continue is
through military might. That is why the US tried to depose Hugo Chavez (Venezuela), why they did
depose Saddam Hussein, and why Syria and Iran
are now in their sights.
Do you never wonder why it is the US can support $US7.4 trillion in debt without the USD spiralling off into inflationary oblivion? Do you ever
wonder how a country can actually spend $US 1/2 trillion more than it earns every year? The answer is dollar hegemony. No other country in the world
can run a deficit or a debt of that proportion (over 5% GDP).
There is no question that the US economy is on a road to disaster. It is really only a matter of when.