Global Insights

BEHIND THE MAD RUSH TO BOMB IRAN - Teheran’s Euro-Based Oil Exchange Spells Doom for Dollar

by Webster G. Tarpley

Washington, January 26. Worldwide Flight from Dollar, Currency Crisis, and Run on US Banks Loom. A few nuclear bombs in Iranian hands are no strategic threat to the US or even Israel. But Iran’s new oil bourse could oust the dollar as the world’s reserve currency, stampede central banks to shift a trillion dollars into the euro and other currencies, and implode US stock price and real estate bubbles. Any military solution will be an even greater disaster than the Iraq adventure.

Author and historian Webster Griffin Tarpley warned today that the Bush administration is in the advanced stages of planning for a catastrophic nuclear sneak attack on Iran. The goal, said Tarpley, would be incidentally to disable Iran’s nuclear capacity, but mainly to prevent the opening -- timed to coincide with the Iranian New Year on March 20 -- of the first non-dollar international oil market since 1944.

"A few nuclear bombs in Iranian hands hardly add up to a strategic threat to the United States," said Tarpley. "But the new Iranian euro-based oil market or oil bourse as it is called has the potential to oust the dollar as the world’s reserve currency, causing central banks to shift a trillion dollars or more in reserves into the euro and other destinations. That would spell immediate doom for the US stock price bubble and real estate bubble as hot money streamed out of this country. It would cut Wall Street and London out of a myriad of lucrative transactions, and deprive the US-UK combine of their ability to interfere in access to other people’s oil," he added.

The Iranian oil bourse would be the first euro-based oil market in the recent history of the world where sellers and buyers of oil could come together for spot and futures transactions independent of the dollar, thus outside US control and without Wall Street skimming off a hefty part of the profits. Today’s privileged position for the dollar is "obsolete and removed from reality," Tarpley asserted.

"The 213-point drop in the Dow last Friday on reports that Iran was shifting funds out of Europe is the merest hint of what may be coming," Tarpley noted. "If the Iranian oil bourse opens, the colossal instability to the dollar, the stock market, and the US banking system will very likely be revealed rather quickly."

The current system allows the US to export unlimited supplies of dollar bills to buy goods abroad, resulting in a yearly trade deficit of $700 billion and counting. Americans should not feel threatened by the inevitable crisis of this system, Tarpley pointed out, since the unique US privilege of importing without producing, as world dumping ground and buyer of last resort, has cut the US standard of living in half since 1970, creating a low-wage economy. It is time for the US once again to earn foreign exchange by producing exports which will mean jobs and prosperity here.

"A rational way out would be to rebuild the world monetary system around fixed parities among the dollar, the euro, and the yen as equal participants, with gold settlement and a credit mechanism to expand exports of capital goods. This would avoid a new general war."

"As for ‘Helicopter Ben’ Bernanke, the incoming Federal Reserve boss, he is clearly getting ready to gin up the printing presses to print an avalanche of paper dollars if the Chinese and Japanese demand cash for their plummeting US Treasury bonds in the near future -- what economists call monetization of the debt. The Fed will soon stop publishing the M3 data series on the money supply, which is the one that would reveal a monetization of debt. Bernanke seems to have Weimar-style hyperinflation written all over him," Tarpley commented.

"The lunatic neocon war plan for Iran is doomed to failure, just as their Iraq adventure was," Tarpley concluded. "If attacked, there is every indication Iran would cut the world oil aorta at the Straits of Hormuz, fire off missiles at Israel and other targets, and unleash Iraqi Shiites and Iranian volunteers around Basra. The position of the US and especially the UK forces there would soon become extraordinarily critical. If Russians and Chinese were killed in the raids, the stage would be set for larger confrontation. All of this would guarantee endless war and economic ruin for the US and the dollar. Why not avoid this incalculable folly by calling right now for a new Bretton Woods international monetary conference, which would be welcomed by the world community as a whole?"

Webster G. Tarpley is an experienced political expert based near Washington DC. He is the author of "George Bush: The Unauthorized Biography" (1992), "Surviving the Cataclysm" (1999) a study of the world financial crisis, and "9/11 Synthetic Terror: Made in USA" (second edition 2006), the first work to tie 9/11 to the neocon "flight forward" into military expansionism in an attempt to shore up the dollar. The revised edition also covers the war drive against Iran.

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