My earlier post re Iraq, Peak Oil, the euro and energy....

[Petrodollar Warfare]

...(Some of you are occassionally interested in my diatribes over the past year about the Iraq war and the macroeconomics underlying that conflict. I posted the below response to someone who thought the Iraq war was 'justifiable.' I have refined my thesis and I hope folks my find this info interesting, please critique as needed...;-)

<<<<I dont think that Iraq was an immediate threat to the US. I wouldn't find it hard to believe if "some" chemical or biological weapons are found, but I doubt we will find vast stockpiles of them. That being said if we left Iraq alone I think it would eventually end up much like a more prosperous North Korea. Some decades down the road one of Saddam's sons would have been leading Iraq and they would have still hated us, and they would likely have had WMD by then.>>>

Since I am writing a book on this subject, I will offer my 2cts worth, actually this post is somewhat longer than a 2ct post But first, I would ask you to consider that we brought teh Batthist into power in a CIA coup in 1963, and strongly supported Saddam from 1980 to 1990. He is a monster partly of our own creation. So the question is - why *did* we overthrow Iraq?

Answer: For the same reasons wars have been fought for centuries - resources and in some cases economics. Based on my analysis of the facts, the Iraq war is a product of geostrategy for the US to gain control over oil, and to prevent momentum towards the euro as an alternative oil transaction currency. The war was about Power.

The problem is this strategy is doomed to fail. Most gov'ts, and the UN simply don't trust the necons, but we sheeple think they are "protecting us" from "them" (ie. the universal, good for any purpose "terrorists" - be they in Columbia, Venezuela, West Africa, Afghanistan/Pakistan, various "stans" to the west of Afghanistan, and the Middle East - please pay no attention to the fact that strategic oil reserves or pipelines are found in each of these areas re recent US military deployments...)

"Hunt for 'new' oil' (9-28-03)
http://www.washtimes.com/specialreport/20030928-123431-1449r.htm

Yes, the US appears to be in a mad scamble to secure the world's oil reserves in an effort to feed our consumption. (Afterall, we consume 25% of the world's oil, about twice as many k/joules per person than Japan)

First I shall address the importance of oil. We need to think about oil in an almost metaphoric sense - as an existential substance that makes or breaks economies and armies. Oil represents power. Afterall, much of what Hitler did in WWII was driven by his need for oil. Same applies today, but it is even more important given the realities of Peak Oil and the structual imbalances of the US economy - that we are attempting to control both. Our debt is not sustianable without petrodollar recycling, and regarding the imminent geological phenemenon known as Peak Oil - Those who control access to oil and the currency of oil shall grow, those who do not will atrophy.

Here's my basic thought process:

Life is nothing more than competition for energy. Period.

This applies equally to single cell amoebas as it does human beings as it does to nation states. Regardless of where we are in the food chain or how developed we are as a nation, this axiom applies to all. We seek and compete for energy.

At the human level we need water to survive, as there is no substitute. Nothing is more precious than water.

At the nation state level, we also need energy, but water is only half the equation. For the past 100 years the industrialized world has become dependent on the very cheap energy supply of hydrocarbons. The power output per weight is quite impressive. Now oil = economic output = food production = survival and growth of nation states. Oil also provides the abilty to project military power.

Some have theorized that it was the abundance of cheap energy and the human's ability to master the harnessing/extracting of energy from hydrocarbons that provided the massive expansion of wealth of the 20th century, as well as the explosion of the human population to its current 6 billion inhabitants. Whether or not a correlation exists, at an intrinsic level this makes sense if life itself is nothing more than the competition for energy. We have had the privlege of living with an abundance of cheap energy for the past 100 years, and we are not running out of oil, but out of *cheap oil.* That's the issue.

Economically, all activity requires energy as an input. Whether that is a single man pushing a plow in a field, hoping to have extra crops to sell for profit based on his labor (energy input), or the entire infrastructure of a industrialized nation that uses vast quantities of energy (oil, hydroelectric, wind, nuclear, coal, wood, etc). The goal is the same as the man with the plow, to harness energy for economic activity.

At the nation state level, nothing is more precious than energy, and 95% of transportation on planet Earth requires hydrocarbons. Buses, cars, trains, planes & ships require hydrocarbons. This is the glue of the global economy. Likewise, with the exception of nuclear-powered submarines and ships, all military operations require vast amounts of hydrocarbons too. This is critical for any nation that wants to be a superpower. Their is no readily available substitute for hydrocarbons when it comes to transportation or military operations. But he who controls the *currency* for oil/energy will be the most powerful nation - especially if it is a fiat currency (which is a curreny that is not backed by a specie metal, ie. gold, and thus can be printed at will by the gov't).

Therefore - Oil is Power, and the currency in which oil is denominated represents economic Power (capitalized for emphasis)

Hence, a monopoly currency for oil is the most powerful currency. This is why since 1974 the US dollar should not have read "In God we Trust" but rather "In OPEC we Trust." The dollar's unique "storage of wealth" is that it is convertible to 1.5 to 1.9 gallons of crude oil - thanks to artificial geopolitical "arrangements" with Saudi Arabia and OPEC. Saddam made the switch to selling oil for euros in Nov 2000, and that was not tolerable. OPEC is now openly discussing this issue, so these crucial US geopolitical arrangements are now being threatened, thus the US's economic and military superpower status is being threatened - by the euro and by the gov'ts of Iran, Indonesia, Russia and Venezuela as they seek to sell their oil/energy in the euro.

(Quick Note) Fall 2000. Saddam surprised the Washington Consensus in November 2000 when he made the switch to euros. IMO, this was his *final* nail in his coffin. The US can not afford both Iran and Iraq to go euro, thus creating a beach head in the world oil currency market (more specifically the US debt can only be tolerated due to the petrodollar recycling mechanism). Iran wanted to do this when/if the euro became at parity to the US dollar. Iraq w/ 11% of world's reserves and Iran with 9% = 20% of the world's reserves as "petroeuro" = end of US economic dominance of the oil markets.

So, I think from Jan 20, 2001 when GWB was sworn-in, plans for "taking out Saddam" were already very much on Cheney and Rumsfeld's mind, Bush went along for the ride of course, not wanting to upset his energy-military-industrial conglomerate paymasters....Plan B became Plan "Operation Iraqi Freedom"...but we pissed off the world in the process. The outcome of the Iraqi mess is unclear, but the neocons do not inspire much confidence...

The other factor re Iraq is of course is our excessive energy needs:

As previously mentioned, Saddam's oil exploration contracts with France, Russia and China from the 1990s could not be tolerated in a US centric world with us as the global hegemon. Yep, during the 1990s Saddam contracted to these 3 countries *40* billion barrels worth of Iraq reserves, worth about $1.1 trillion. This is 35% percent of Iraq's entire oil reserves. (assuming they have 112 billion, which is an unknown variable at the moment). This was not tolerable to the US, or atleast the neocons. The one catch was that oil exploration could not take place until the UN sanctions were lifted. So, the neocons would not allow Dr. Blix et al to declare Iraq free of WMD, as the French, Russians and Chinese could then gain legal access to those oil fields, cutting the US out, and securing the euro as a 2nd oil transaction currency.

Hence, Bush as his neocon advisors decided to invade Iraq before any of this could occur. Russia, France and China's oil contracts are now void, with the US and UK controlling the spoils. BTW, the UK's portion of the North Sea began a rather steep decline after 2000, so the UK is going to soon import the majority of their oil. I think Blair went along with the neocons for the UK's energy needs...(and perhaps to negotiate a favorable outcome whenever the UK does decide to join the euro)

As for the US....we arrived at Peak Oil for the lower 48 states in 1971, and by 2020 we will need to import 90% of our oil (according to Cheney's 2001 energy report). How does Iraq fit into this? Well, Russia's oil peaked in 1987, and both Yeltsin and Putin pursued contracts with Saddam re Iraq's unclaimed oil fields. France has nuclear power, but needs oil for transportation, and of course they want to buy oil in their own currency to avoid currency risk FYI: Remember the fall of 2000 when the euro was about 17% less than the dollar? Well, the French, Germans and eurozone were not happy about their petrol prices...check out these pictures for an illustration of "currency risk regarding energy."....

http://www.cbsnews.com/stories/2000/09/15/world/main233748.shtml

http://www.cnn.com/2000/WORLD/europe/09/04/france.blockade/

For a good analysis of Peak Oil I recommend Richard Heinberg's book: "The Party's' Over." Here is some chronology re Iraq and US geostrategy that you may wish to consider:

(Note #2) Peak Oil circa 1995 to present It is my understanding that the most highly regarded oil consultanting firm, Petroconsultants out of Zuirch, produced a report in 1995 that dealt somewhat with the issue of Peak Oil. This report cost $32,000 to each of their exclusive clients, and these clients have to sign non-disclosure agreements to keep specific information confidential. Several interesting comments based on that 1995 study and subsequent events in Caspian Sea region seem to suggest that 1) the Caspian Sea region was thought to be one of the last promising 'major' oil discoveries, and 2) the world oil production will peak around 2010 unless large discoveries are quickly found and brought-online, with Iraq being the most unexplored and thus potentially the best/last source of undiscovered Persian Gulf oil.

It should be noted that there are 2 types of oil data, 1) Political data (Oil and Gas Journal, OPEC reporting, etc), and 2) technical data. Politicians and oil companies use the "political data" whereas intelligence agencies and gov't strategists use the "technical data" - which is hard to get. In fact, disclosing Russia's oil reserve data is punishable by 7 years in jail, although the data is widely known these days. Here's the most recent and bizarre use of data, Canada is now listed by the USGS as having the 2nd largest oil reserves b/c they recently added heavy tar sands as "reserves." Never mind that it takes almost 2 barrels of energy to extract 1 barrel of energy from tar sands, but according to the "political data" Canada now has more oil than Iraq...and this month Venezuela requested that it's tar sands data be included as their "reserves" which makes them equal to Saudi Arabia?! It's absurd, and of course both economists and market fundmentalists always use "political" data as if were fact, as their models fall apart when demand for oil outstrips oil supply, and no equivalent substitute is available to produce the same quantify of energy (via EROEI - Energy Return on Energy Invested).

The best source for "technical data'? Former geologists who have no stake in the game, and Petroconsultants, Inc. Petroconsultants has 40 years of production history, uses the largest private database of 40,000 oil fields. It is rumored that the CIA is one of their biggest clients. (according to Dreffeyes) Here's a sample from his book.

http://pup.princeton.edu/chapters/s7121.html

It should be noted that in the late 1990s tilll 2000 there were optimistic claims that the Caspian Sea region could have up to 200 b/bls of untapped oil. Subsequent 2000-2002 drilling has reduced these "political" figures to a mere 8-20 b/bls (and up to 20% sulfur, making extraction expensive and environmentally dangerous). Dick Cheney's energy plan was written with the assumption the Caspian Sea region held that 100 to 200 billion barrels of decent quality crude. Plan A was "Operation Enduring Freedom"...made possible in the aftermath of 9/11. However, by then the realization about the Caspian Sea area was becoming apparent.

What does this depletion of hydrocarbons mean? Well, it means we are becoming a more multi-polar world, which is dangerous and should be avoided as much as possible, but that is what the neocon strategy is all about "to prevent any country from even aspiring to challenge the supremacy of the U.S." Trust me, the US energy-military-industrial conglomerates will attempt to move Heaven and Earth to prevent the euro from becoming an alternative oil transaction currency. Do not underestimate the strategy and knowledge of these folks....

I'll just speculate here, but I have a feeling that alarm bells went off in Langley sometime in late September 2000 when Saddam announced after a govt. meeting that Iraq was moving to euros. After all, that's what those guys are paid to do. Little known to most people, but Bush and perhaps Cheney were privy to US intelligence briefings in the last Quarter of 2000. I read that traditionally the major presidential contender is given the PDB or something very close during the transition period, so once the new President is sworn in he/she will not be suddenly hit with an international crisis that he/she was completely unaware of. So, both Gore and Bush each got a daily intel report from early Nov through January. In fact, I read somewhere that Bush was getting intel reports from September 2000 forward. Clinton got the same type of intel reports from either after Sept 1992 or after the Nov 92' election, its standard practice.

My point is that the neocons want to pursue a strategy of "global dominance" - which means controlling both Persian Gulf oil and its currency. In their infamous Sept 2000 PNAC document, they lamented that their policies could not be implemented without a "new Pearl Harbor" (their words). That event was provided on 9/11/01, and the PNAC blueprint was ready to go, with Rumsfeld and Wolfowitcz arguing with Coilin Powell that perhaps Iraq should be "hit" first, rather than Afghanistan (that same afternoon of 9/11/01). Powell won the argument in the fall of 2001, but the Iraq war plans probably go back to late the late 1990s - for the geostrategic issues mentioned in my earlier email.

So, in the "oil vs. dollar" question - you can't be a superpower without access to *both* energy and a strong currency. You must have control of both. A quick look back at recent history is helpful.

(ie. 19th century Britain with the universally accepted Sterling pound and a massive coal burning fleet of warships made them an Empire. The advent of faster and more efficient oil burning ships just before WWI was one of the reasons why England's Empire began to wane, the debt of WWI and then WWII was the final event that ended the dominance of the Sterling pound, thus by de facto ending their Empire too.

(Additionally, according to recently declassified 1977 and 1991 CIA documents studying the Soviet Union's pre-Peak Oil and post-Peak Oil period predicted in both cases that the USSR would not be able to maintain it's military superstructure once its energy supply peaked. That happened initially in 1983, and with the final peak in 1987, we all know happened in the 5 years after that event. The ruble was never nearly strong enough to challenge the dollar, so the USSR broke-up and the rest is history - well sort of. The neocons are pushing Putin closer to the EU, and Russia may redenominate oil sales in the euro if a pricing mechanism were devised. The US is trying hard to keep the EU splintered ("Old Europe" vs. "New Europe", and to keep the Russia's from joining up with the EU for economic and military reasons.)

The US is now facing two crisis of epic proportions, perhaps the greatest crisis since the 1860s/1930s combined. One, our energy consumption is excessive and will soon outstrip demand unless we control as much of the world's remaining hydrocarbons as possible (- hence the US bases popping up everywhere where either oil or pipelines are to be found - under the guise of the "war on terror" of course)). Secondly, our currency is threatened for the first time since WWII with an alternative - the euro. The whole world needs to quickly develop new energy policies and technologies, but here is the US we have the most to lose due to our high consumption rate and structural debt problems. In fact, out entire "suburban" infrastructure was designed for the utlization of automobiles and we do not have enough mass transit in place to work well when Peak Oil arrives. We have *a lot* of work to do, and not enough time, and are in too much debt which further reduces our options.

So, we have been reduced to using military force to maintain our hegemonic status, but under the neocons we are doing it in such an overt way that the world community is objecting. The only way out of this dilemma is international cooperation, real leadership, global monetary reform and some sacrifices by the US citizenry re energy consumption. Politicians are not interested in being truthful with the sheeple, both parties are more or less in the pockets of the military-energy conglomerates, so I'm writing a book, just to see what happens..if anything.

Furthermore, controlling the oil does not help us if it is denominated in euros. We now use the printing press to buy energy, and the world sucks up our dollars so they too can buy oil, pay off their IMF loans, manipulate their currency, and do what they need to do to survive. However, the US has a huge trade deficit problem, how exactly we can overcome our energy dilemma and our trade deficits are my biggest concerns re the long-term economic viability of the US.

You and I may wish to think that the US is going to "install" democracy in Iraq, but that is not our goal, and our actions show otherwise (please read "All the Shah's Men" for a good parallel from 1953). The facts on the ground in Iraq speak for themselves:

1) The US quickly changed Iraq's oil sales back to dollars, just as I predicted a year ago:

Iraq returns to international oil market (June 5, 2003)
http://www.thedossier.ukonline.co.uk/Web%20Pages/FINANCIAL%20TIMES_Iraq%20returns%20to%20international%20oil%20market.htm

2) The neocons canceled Iraq's oil contracts with other nations (ie. France, Russia and China)
3) Paul Bremer postponed/did not permit Iraqi elections back in June
4) The neccons have threatened Iran and Syria despite the fact that Al Qeada is sponsored by Saudi Arabia
5) and the neocons have basically pissed off most of the world in their pursuit of unilaterists policies.

In conclusion, the Iraq war was designed to 1) secure oil supplies to the US before, during and after Peak Oil, and 2) to have a large military presence to "dissuade" any other country of moving to the euro as an oil transaction currency. Reconverting Iraq back to the euro was not the critical issue, but stopping any *futher momentum* towards the euro was and is a critical US geostrategy. The Iraq war was a message of sorts to others. Why such a risk? Because it will become increasingly logical for OPEC to sell oil in euros once the EU expands in May 2004, and even the neocons know what that means - the end of US hyperpower, and thus the end of their dreams of a US Global Empire.

Unfortunately for the neocons, Iraq was not quite a "cake walk" and the lack of international support/$$ seems to have slowed them down in the aftermath. As reported this weekend, they need a bigger military to pursue their goals. BTW, did you notice the draft board reactivation stories from last month....wonder if that will become an election year issue?

"Oiling up the draft machine?" (Nov 4, 2003)
http://www.salon.com/news/feature/2003/11/03/draft/

Global Empire and 5 more wars will require many more men...Yes, the neocons have a plan, but their execution has been poor and incredibly arrogant, but desperate men do desperate things.

There is no easy way out, and I do not envy the next President of the US. My book will end with a discussion regarding global monetary reform, and advocate a compromise with the EU. What the US will lose is its hegemonic/hyper-power status, and become more a nation of equals with regard to the EU. Nobody wants to hear that, we all want to be "winners all the time" - but I just can't see how this is going to unwind without the US being a lot humbler nation. So, that is the difficult choice, but the dictates of the global economy and physics will soon come to the forfront, and the only solution to prevent future oil currency warfare is international cooperation and compromise...and perhaps the one solution to "save the American Experiment" from the dreaded path of all Empires - military overextension and subsequent economic decline. Time to get motivated.

[BlueEyedSon]

1. Good luck on your book.

Here is an email I sent to Paul Krugman (NY Times) in March 2003:

From reading your work I am convinced that you are not a "flat earth
economist" or a "cornucopian" who believes that fossil fuel reserves are
unlimited or will come into being in response to market forces. The
elephant in the room is that world peak oil production will occur within
the next 10 years. I have heard almost nothing about that impending
event in the US media or in any public government policy statements.
Cheap energy, primarily in the form of oil, has been the engine of
growth through the second half of the 20th century. What are the
consequences of the end of cheap oil on growth? What will be the impact
on our American way of life (and on civilization as we know it) when oil
is 75% depleted? How about 90%? Since there are guys in this
Administration who are oilmen, one must assume they are having these
discussions.

Here are two articles which highlight oil depletion and dollar vs euro
hegemony (a more immediate issue) - which ring true as reasons for an
Iraqi invasion, rather than the shifting pastiche of WMD/al Qaeda
links/human rights violations. I have included links to sources and some
excerpts for your enjoyment.

http://www.rupe-india.org/34/military.html
Real Reasons for the US Invasion: Military Solution to an Economic
Crisis

<excerpts>

1. Securing US supplies: First, the US itself is increasingly dependent
on oil imports—already a little over half its daily consumption of 20
million barrels is imported. It imports its oil from a variety of
sources—Canada, Venezuela, Nigeria, Saudi Arabia, even Iraq. But its own
production is falling, and will continue to fall steadily, even as its
consumption continues to grow. In future, inevitably, it will become
increasingly dependent on oil from west Asia-north Africa—a region where
the masses of ordinary people despise the US, where three of the leading
oil producers (Iraq, Iran and Libya) are professedly anti-American, and
the others (Saudi Arabia, Kuwait, the United Arab Emirates) are in
danger of being toppled by anti-American forces.

2. Maintaining dollar hegemony: Secondly, if other imperialist powers
were able to displace US dominance in the region, the dollar would be
dealt a severe blow. The pressure for switching to the euro would become
irresistible and would ring the death knell of dollar supremacy. On the
other hand, complete US control of oil would preserve the rule of the
dollar (not only would oil producers continue to use the dollar for
their international trade, but the dollar’s international standing would
rise) and hurt the credibility of the euro

3. Oil as a weapon: Thirdly, direct American control of oil would render
potential challengers for world or regional supremacy (Europe’s
imperialist powers, Japan and China) dependent on the US.

</excerpts>

This is a sloppier article, but the points are eventually made.
http://www.museletter.com/archive/132.html
The US and Eurasia: End Game for the Industrial Era?

<excerpts>

Yet we have not fully answered the question posed earlier - why is the
current administration willing to expend so much domestic and
international political capital in order to pursue the impending Iraq
war? Critics of the administration insist that this is a war for oil
profits, but the situation is actually more complicated and can be
understood only in the light of two crucial factors not widely
acknowledged.

The first is that the continued strength of the dollar is in question.
In November 2000, Iraq announced that it would cease to accept dollars
for its oil, and would accept instead only euros. At the time, financial
analysts suggested that Iraq would lose tens of millions of dollars in
value because of this currency switch; in fact, over the following two
years, Iraq made millions. Other oil-exporting nations, including Iran
and Venezuela, have stated that they are contemplating a similar move.
If OPEC as a whole were to switch from dollars to euros, the
consequences to the US economy would be catastrophic. Investment money
would flee the country, real estate values would plummet, and Americans
would shortly find themselves living in Third-World conditions

The second factor likely weighing on Bush's decision to invade Iraq is
the depletion of US energy resources and the consequently increasing
American dependency on oil imports. The oil production of all non-OPEC
countries, taken together, probably peaked in 2002. From now on, OPEC
will have ever more economic power in the world. Moreover, global oil
production will probably peak within a few years. As I have discussed
elsewhere, alternatives to fossil fuels have not been developed
sufficiently to permit a coordinated process of substitution once oil
and natural gas grow scarce. The implications - especially for major
consumer nations such as the US - will eventually be ruinous.

Both problems are of overwhelming urgency. Bush's Iraq strategy is
apparently an offensive one designed to enlarge the US empire, but in
reality it is primarily defensive in character since its deeper purpose
is to forestall an economic cataclysm

</excerpts>

I hope you take the time to read and appreciate these pieces, and will
consider integrating some of the points into future Op/Eds.

[ramapo]

2. If not for the oil...

Who in the US govt would give a crap about Iraq? The answer is of course nobody. There are plenty of tyrants in power throughout the world. The US doesn't have much interest in regime change if there's nothing in it for us.

The US is untouchable militarily. We are very vulnerable economically. That is where the next war will be fought. After all, that's how we defeated the USSR.

[cliss]

3. WWOW. Long post, Gore4.

Long, but awesome stuff! I'm an information junkie, and this happens to be my favorite subject. Peak Oil, the REAL reason for the war in Iraq, etc.

Anyway, here's my take on the whole situation. With some help from Stan Goff who has written some articles on CounterPunch about US consumption and the inevitable truth: oil production is going to start a precipitous decline, starting in about 5 years.

At the same time, demand has increased to new highs. There's talk of China wanting to get a piece of the action; their consumption could easily total 1 billion barrels per day. So the two lines cross each other; supply and demand. The result will be warfare. The fight over who gets to keep the remaining reserves.

The US invaded Iraq for 2 reasons: #1 Oil and #2 power over the rest of the oil. Saudi Arabia has the world's largest reserve of oil; Iraq has the world's 2nd, with about a trillion (?) barrels. The US is a drug addicted junkie who gets into delerium tremens at the thought of losing its supply of oil. We will sacrifice many, many more lives than have already been lost to obtain it. We have already shelled out billions in pursuit of controlling the oil; that should tell you how much we value it.

That's why Rums-felled seems so cool and collected; he knows he's willing to pay billions more in order for us to keep it, because like you said, it's all about survival.

So here's where the real problem comes in; and I've written my point of view in a few posts. As we're continuing to eliminate "threats" to the oil supply, we continue to kill civilians and resistance fighters. And we're doing so at enormous cost. What did we calculate the cost per month? $3.9 billion I think.

Now think abour our budget deficit, which is going to be the biggest in history, next year, at $500 billion. We are planning to continue this for a few more years. Or at least that's their gamble.

Here's where the problem comes in, and I'm not really sure if they've thought this through to the end: we are now looking at crippling budget deficits. Not just for one year, but for maybe 5 (if we can hold out that long).

This will become THE overriding issue for our economy over the next few years. It will drain our treasury, wreack havoc on our economy. And yet they were willing to gamble everything on this madcap quest.

They are DAD who took the mortgage money and went to the horse races to make a big killing.

[Petrodollar Warfare]

5. Thanks, here are 2 more issues to consider...

<<<<Here's where the problem comes in, and I'm not really sure if they've thought this through to the end: we are now looking at crippling budget deficits. Not just for one year, but for maybe 5 (if we can hold out that long).

This will become THE overriding issue for our economy over the next few years. It will drain our treasury, wreack havoc on our economy. And yet they were willing to gamble everything on this madcap quest.>>>

...aside from the budget deficits and drain on our econony, it is becoming increasingly obvious that we need a bigger military to fulfill the stated objectives of the neoconservatives ("Global Empire"). However, most of the world community is not going to send troops into Iraq b/c they do not want the neocons to pursue their strategy, and it appears the UN does not want to legitmize the concept of "preventative war." Our National Guard, Reserves, and regular army appear very unhappy about these extended employments - as it destroys families, and is psychologically difficult to fight a war to find Iraq's WMD - when no WMD is found... According to a recent Star and Stripes article, half of our troops will not re-enlist. This means the draft will come after the elections (possibly even with a Dem President). Obviosuly the draft will be highly controversial. A new existential threat might be created by the neocons to scare us again...but I think they wil fail even worse the next time.

Secondly, the US has been successful as a more or less "covert" Empire from 1947-1991, and a more or less "benign" Empire from 1991-2000. Under the neocons we have become a OVERT Empire, and the world is resisiting this. The founding fathers warned us that seeking Empire abroad will result in tryanny at home. We entered that stage with the passage of the USA Patriot Act, some Homeland Security laws, and the censorship of the news. Yesterday a reporter termed Dean's questioning about 9/11 foreknowledge as "political hate speech." Nevermind the Chairman of the 9/11 National Commission bravely stated that the attacks were preventable. The Founders were right, in order to fight Imperialistic wars abroad we must sacrifice our democratic principles. Why? True Democracys are incompatible with Empire and Imperialism.

The founders were also afraid of the "temptation for Empire" in that wars also result in higher taxiation, a form of bondage. It is incrediable that everything we have done militarily has been borrowed, and that massive tax cuts have been passed along with massive increases in spending. The world must think we have lost our collective minds. The American people are so ignorant of this historical correlation b/t wars and taxes that when they are increased dramtically in the next administration, many folks will likely fail to see the connection b/t war and taxes. I do not envy the next US President...

As an aside (I study history) this is the 200th year anniversary of the Louisanna Purchase, the greatest real estate deal of all time. How did Jefferson get such a good deal? Because Napoleon needed money to finance his wars/pursuit of Empire. One would hope that we might begin to see that our "war debt" is mounting just like Napoleon's war debt was mounting. Endless warfare ends Empires...

So, we are in a very dangerous period where criticism of the President is loudly derided as "political hate speech", unpatriotic or treasonous. The reverse is true if one reads our history - to *not* criticize the government if you do disagree with its policys is unpatriotic, and "treasonous to the public good." Real leaders such as Teddy Roosevelt and FDR stated this during WWI and WWII, respectively - but this is something that the authoritarians/hard-right do not understand or accept.

Anyhow, I agree that the structual imbalances of the US economy perclude the pursuit of the Neocon agenda. Furthermore, the world community is probably more aware of the implications of the Project for a New American Century than the US citizens are, and the world does not appear ready to accept the US as a militant and unilateral hyper-power. The dollar is our Achilles Heel, and it will also be our undoing if we do not change course and compromise with the EU...otherwise we will have military conscription, tryanny and repression at home, and the American Experiment will be end as we have known it for the past 227 years. In order to save the American Experiment the neoconservative ideology must be quickly relegated to the dustbin of history. It's time to educate and motivate.

[NoKingGeorge]

6. And the alternative is....

what? I bow to no one in my disgust with the lying, anti-American cabal in power, BUT understanding the consequences of becoming a third world nation, What would you propose over say the next five years? Alternative fuels cannot be effective in that time frame. 'Co operate' with Europe in what way? Why would european governments hamper their industries or financial institutions from making more money?
Maybe we are in a struggle for the survival of the Great Experiment.

[Petrodollar Warfare]

7. It will take more than 5 years, but here are some ideas...

1) In order to save the American Experiment the neoconservative ideology must be quickly relegated to the dustbin of history. This message must be the first official act of the 43rd President - whom ever that turns out to be.

2) Increase taxes to return to fiscal sanity (at least attempt to balance current budget deficit). Wildly unpopular but wars and expensive, and we have put both Afghanistan and Iraq on a "credit card" so to speak. Foreign investors will demand we begin paying our dues. We must show the world that the US gov't can be fiscally responsible.

3) The Fed may have too riase the rates *slightly* to stem the weakening the dollar - but I'm torn on this issue. It may be too late by then, and it will cause a lot of pain for many average Americans, but we have lived in the fantasy of a low-tax/huge tax cuts, low-interest rate, but huge buget deficits and huge trade account deficits for too long. Sorry, but their will be pain, the hope is to spread the pain over several years, and not let it happen percipitously. Some think we will have a deflationary contraction beginning perhaps next year, and that seems quite possible- IMO

4) Propose to the UN to form an International Consortium of energy scientists & researchers from all over the globe to develop alternative fuels for transportation. Could be a combo of biomass, fuel cells, whatever. The US, as the greatest energy consumer, must show leadership in trying to find alternatives. This will do much to "repair" our international image following this dark period of neocon/Empire idealists. Imagine the Manhatten Project but on an international scale, I'm thinking a $100 billion international effort per year. We don't have much time before Peak Oil - in fact we may already be at the plataeu in that global oil production in 2001 and 2002 was slightly lower than 2000, but we'll see...

5) The UN should also devise some type of methodology regarding the distribution of hydrocarbons (1st pie-in-the-sky idea). This will be very very difficult to acheive, but the alernative is oil warfare in teh Persian Gulf. Some sort of energy formula should be constructed that reflects economic output and population growth statistics. Their should be more than guidelines but some sort of enforcement mechanism based based on energy price. The bottom line is the US needs to use less energy and the developing world needs to use a little more to develop their own infastructures before the full effects of Peak Oil make such reforms impossible. Again, I have two "pie in the sky" ideas, but its either compromise or fight.

6) Global monetary reform. My 2nd pie in the sky idea, but absolutely necessary for "rebalancing" the global economy. The US consumer can not go into indefinite debt as the single engine for global growth. The world would be better off with 3 engines of global growth. The US, the EU and Asia. First reform is the euro as the 2nd world reserve currency, *at parity with the dollar*, and the construction of dual OPEC oil transaction currency. This should join the US with the EU as two equal "co-hegemons." At some point a third world reserve currency will make sense for the Asian bloc, perhaps a yuan/yen currency around 2010 that allows China and Japan to purchase oil/energy with their currency. This is a very controversial proposal, but again, I fear that failure to compromise on these issues will result in a dangerous multipolar world engaged in oil and oil currency warfare. Better to work this out now before things get desperate in the post Peak Oil enviroment...

The problem for the USA is threefold - 1) we have too much debt,2) we use too much energy and 3) we will no longer be the single hyper-power in the above scenarios - which creates cognitive dissonance in ost Americans unless they are part of the "Greatest Generation" and remember the 1930s. Neocons will not go for this as they seek "global empire", but the industrialized world can and will topple us from our hegemonic status *if* they perceive us to be a greater threat to world stability than the economic disruptions that would occur from the displacement of the dollar standard. We may need to repudiate some level of our debt, but over a very long period of time, and all of these reforms (with the exception of energy) will need to be gradual. Under the above scenarios we will be forced to reduce our overblown military expenditures by a considerable amount, perhaps 50% ("only" $200 billion p/ year), and spend our tax money on reducing our debts and improving our energy infrastructure for a less energy intensive existence.

<<<<Maybe we are in a struggle for the survival of the Great Experiment.>>>

I think the real struggle is more internal than external. Can we return to a democratic republic and peacefully restrain ourselves from seeking Empire? Can we rejoin the community of industrilized nations - as an equal to the EU? Our ultimate test for the American Experiment? Can the US once again begin living within our means - from both fiscal and energy perspectives?

In essence, energy and monetary reform must be pursued via international cooperation and multilateral treaties-asap. It appears the beginning of the 21st century will be either be a disasterous time period with oil related warfare, or a noble effort at international cooperation via global energy and monetary reform. The choice is ours: fight for Empire or compromise for Peace?


"America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves."

"I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts."
-Abraham Lincoln

[NoKingGeorge]

8. Thank You for the thoughtful response nt

[ElsewheresDaughter]

4. WOW thanks...i was gonna post this essay by W. Clark 1/03 here ...

yesterday i dug it out of my files but computer woes prevented me from posting it then and i am very glad that you also have hit upon the "REAL REASONS" for the Iraq war....you have done a great job keeping it out there

Good luck and i look forward to reading your book :yourock:

http://www.ratical.org/ratville/CAH/RRiraqWar.html

The Real Reasons for the Upcoming War With Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken Truth
by W. Clark
January 2003 (last revised 6 March)
Independent Media Center
www.indymedia.org

summary

Although completely suppressed by the U.S. media and government, the answer to the Iraq enigma is simple yet shocking -- it is an oil currency war. The real reason for this upcoming war is this administration's goal of preventing further Organization of the Petroleum Exporting Countries (OPEC) momentum towards the euro as an oil transaction currency standard. However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves. This essay will discuss the macroeconomics of the `petro-dollar' and the unpublicized but real threat to U.S. economic hegemony from the euro as an alternative oil transaction currency. The author advocates reform of the global monetary system including a dollar/euro currency `trading band' with reserve status parity, and a dual OPEC oil transaction standard. These reforms could potentially reduce future oil currency warfare.



"If a nation expects to be ignorant and free, it expects what never was and never will be . . . The People cannot be safe without information. When the press is free, and every man is able to read, all is safe."



Those words by Thomas Jefferson embody the unfortunate state of affairs that have beset our nation. As our government prepares to go to war with Iraq, our country seems unable to answer even the most basic questions about this upcoming conflict. First, why is there almost no international support to topple Saddam? If Iraq's weapons of mass destruction (WMD) program truly possessed the threat level that President Bush has repeatedly purported, why are our historic allies not joining a coalition to militarily disarm Saddam? Secondly, despite over 350 unfettered U.N inspections, there has been no evidence reported that Iraq has reconstituted its WMD program. Indeed, the Bush administration's claims about Iraq's WMD capability appear demonstrably false. <1> <2> Third, and despite President Bush's rhetoric, the CIA has not found any links between Saddam Hussein and Al Qaeda. To the contrary, some intelligence analysts believe it is far more likely Al Qaeda might acquire an unsecured former Soviet Union Weapon(s) of Mass Destruction, or potentially from sympathizers within a destabilized Pakistan.

Moreover, immediately following Congress's vote on the Iraq Resolution, we suddenly became aware of North Korea's nuclear program violations. Kim Jong Il is processing uranium in order to produce nuclear weapons this year. President Bush has not provided a rationale answer as to why Saddam's seemingly dormant WMD program possesses a more imminent threat that North Korea's active nuclear weapons program. Strangely, Donald Rumsfeld suggested that if Saddam were `exiled' we could avoid an Iraq war. Confused yet? Well, I'm going to give their game away -- the core driver for toppling Saddam is actually the euro currency.

Although completely suppressed in the U.S. media, the answer to the Iraq enigma is simple yet shocking. The upcoming war in Iraq is mostly about how the ruling class at Langley and the Bush/Cheney administration view hydrocarbons at the geo-strategic level, and the overarching macroeconomic threats to the U.S. dollar from the euro. The Real Reason for this upcoming war is this administration's goal of preventing further OPEC momentum towards the euro as an oil transaction currency standard. However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves.

This essay will discuss the macroeconomics of the `petro-dollar' and the unpublicized but real threat to U.S. economic hegemony from the euro as an alternative oil transaction currency. The following is how an astute and anonymous former-government employee/macroeconomist alluded to the unspoken truth about this upcoming war with Iraq:

"The Federal Reserve's greatest nightmare is that OPEC will switch its international transactions from a dollar standard to a euro standard. Iraq actually made this switch in Nov. 2000 (when the euro was worth around 82 cents), and has actually made off like a bandit considering the dollar's steady depreciation against the euro. (Note: the dollar declined 17% against the euro in 2002.)

"The real reason the Bush administration wants a puppet government in Iraq -- or more importantly, the reason why the corporate-military-industrial network conglomerate wants a puppet government in Iraq -- is so that it will revert back to a dollar standard and stay that way." (While also hoping to veto any wider OPEC momentum towards the euro, especially from Iran -- the 2nd largest OPEC producer who is actively discussing a switch to euros for its oil exports)."

more...

[cliss]

9. Thank you, Gore4

for your awesome reply to my post. I agree with your assessments.

I need to read everything thorough again, though. Need to absorb all of this.

PLEASE let us know when your book is done, or give us an idea of when it will be finished. I will be the first one to buy it.

C. Liss