apologies if this is a re-posting......

IT IS ABOUT OIL AND THE ECONOMY AFTER ALL, STUPID!

an economic parallelanalysis

A World Nation remix by Brandon Prince

 worldnation@ntlworld.com

Bush flew to Ireland in advance of Chancellor Gordon Brown's budget
speech
to talk about the reconstruction of the post-war USA, and specifically,
how
to shore up a failing economy. His main concern is to get the war over
cheaply, create work for US reconstruction and security contractors,
and
start trading Iraqi oil - in dollars. The collapse of the US economy,
triggering a worldwide shift of power, is bound up with the fate of
Iraq.

And of course its oil. Or more specifically, how that oil is paid
for. The Invasion of Iraq is part of an oil currency war. It aims to
prevent the Organisation of Petroleum Exporting Countries (OPEC) from
switching from the dollar to the euro as an oil transaction currency
standard. In order to pre-empt this, it is necessary to gain strategic
control of Iraq, which possesses the world's second largest oil
reserves.



The Federal Reserve's greatest nightmare is that OPEC will switch its
international transactions from a dollar standard to a euro standard.
Iraq
made this switch in November 2000, and has profited from the dollar's
steady depreciation against the euro. (Note: the dollar declined 17%
against the euro in 2002.)



The Bush administration and the corporate military industrial network
conglomerate want a puppet government in Iraq so that it will revert
back
to a dollar standard and stay that way (while also hoping to veto any
wider
OPECmomentum towards the euro, especially from Iran - the 2nd largest
OPECproducer who is actively discussing a switch to euros for its oil
exports).



Despite Saudi Arabia being a `client state,' the Saudi regime appears
increasingly weak, and under threat from civil unrest. Political change
might follow an unpopular US occupation of Iraq. The Bush
administration is
aware of these risks. The new framework requires a large permanent
military
presence in the Gulf in apost-Saddam era, just in case we need to
control
Saudi's Ghawar oil fields in the event of a coup. But back to Iraq.



Saddam sealed his fate when he decided to switch to the euro in late
2000,
later converting his $10 billion reserve fund at the UN to euros. At
that
point, war become inevitable under Bush Jr.



Everything else aside from the reserve currency and the Saudi/Iran oil
issues (i.e. domestic political issues and international criticism) is
peripheral and of marginal consequence. The dollar-euro threat is
powerful
enough that the Bush administration will rather risk economic backlash
in
the short-term to stave off the long-term dollar crash of an OPEC
transaction standard change from dollars to euros. All of this fits
into
the broader Great Game that encompasses Russia, India, China.



This could reduce investor and consumer confidence, borrowing/spending,
create political pressure to form a new energy policy that weans us off
Middle-Eastern oil.



Many analysts were surprised that Saddam was willing to give up
millions in
oil revenue for a political statement when he switched from dollars to
euros for oil sales on 6 November 2000. However, the steady
depreciation
of the dollar against the euro since late 2001 means that Iraq has
profited
handsomely from the switch in their reserve and transaction currencies.



The euro has gained almost 25% against the dollar since late 2001.
This
also applies to the $10 billion in Iraq's UN `oil for food' reserve
fund,
previously held in dollars, which has also gained the same percent
value
since the switch. What would happen if

OPEC made a sudden collective switch to euros, as opposed to a gradual
transition?



Oil-consuming nations would have to flush dollars out of their central
bank
reserves and replace these with euros. The dollar would crash anywhere
from 20-40% in value with the consequences one could expect (think
Argentina). Foreign funds would stream out of the US stock markets and
dollar assets, there'd be a run on the banks like the 1930s, the
current
account deficit would become unserviceable, the budget deficit would go
into default, and so on. Your basic 3rd world economic crisis
scenario.



The United States economy is intimately tied to the dollar's role as
reserve currency. This doesn't mean that the US couldn't function
otherwise, but that the transition would have to be gradual to avoid
such
dislocations (and the ultimate result of this would probably be the US
and
the EU switching roles in the global economy).



A large spike in oil prices could create huge problems for the Japanese
banking system, the world's largest holder of US dollar reserves. What
is
needed is a meeting of the G-8 industrialised nations to negotiate the
global monetary system and compromise on the euro/oil issue.
Unfortunately
the current administration has chosen a military option instead of a
conference on monetary reform.



After Saddam, the US will keep a large permanent military force in the
Gulf. There is no `exit strategy,' as the military will be needed to
protect the newly installed regime (Remember Afghanistan?), and send a
message to other OPEC producers that they might receive `regime change'
if
they convert their oil payments to euros.



Iran's proposal to receive payments for crude oil sales to Europe in
euros
instead of U.S. dollars is based primarily on economics, although
politics
are still likely to be a factor in any decision.



"The proposal, which is now being reviewed by the Central Bank of Iran,
is
likely to be approved if presented to the country's parliament", a
parliamentary representative said. "`There is a very good chance MPs
will
agree to this idea . . . now that the euro is stronger, it is more
logical."



During 2002 the majority of reserve funds in Iran's central bank were
shifted to euros. Iran's interest in switching to the euro as their
currency for oil exports is well documented. It appears likely.



"More than half of the country's assets in the Forex Reserve Fund have
been
converted to euro", a member of the Parliament Development Commission,
Mohammad Abasspour announced. He noted that higher parity rate of euro
against the US dollar will give the Asian countries, particularly oil
exporters, a chance to usher in a new chapter in ties with European
Union's
member countries. He said that the United States dominates other
countries
through its currency, noting that given the superiority of the dollar
against other hard currencies, the US monopolises global trade. The
lawmakerexpressed hope that the competition between euro and dollar
would
eliminate the monopoly in global trade.



Another factor is Japan's weak economy. If the war creates prolonged
oil
high prices ($45 per barrel over several months), or a short but
massive
oil price spike ($80 to $100 per barrel), some analysts believe Japan's
economy, sensitive to oil prices, would collapse. If its banks
default,
the collapse of the world's second largest economy would set in motion
a
sequence of events that could devastate the US economy. Economic
dislocation in the Pacific Rim could spread to Europe and Russia. The
Russian government lacks the controls to thwart a run on the dollar,
which
could force an OPEC switch to euros.



Another OPEC member, Venezuela, a major US oil supplier, has indicated
they
may switch to euros just as Saddam did in November 2000.



Incidentally, North Korea recently decided to officially drop the
dollar
and begin using euros for trade, effective 7 December 2002. Unlike the
OPEC-producers, North Korea's switch will have negligible economic
impact,
but it illustrates the political fallout. More troubling is North
Korea's
recent action following the oil embargo of their country. They are in
dire
need of oil and food. In an act ofdesperation they have re-activated
their
pre-1994 nuclear program.

Processing uranium appears to be taking place at a rapid pace, and it
appears their strategy is to prompt negotiations with the USregarding
food
and oil. The CIA estimates that North Korea could produce 4-6 nuclear
weapons by the second half of 2003. This crisis over North Korea's
nuclear
program further confirms the fraudulent premise for the Iraq war.



During the 1990s the world viewed the US as a rather self-absorbed but
essentially benevolent superpower. Military actions in Iraq (1990-91 &
1998), Serbia and Kosovo (1999) were undertaken with bothU.N. and NATO
cooperation and thus afforded international legitimacy. President
Clinton
also worked to reduce tensions in Northern Ireland and attempted to
negotiate a resolution to the Israeli-Palestinian conflict. Their
superpower status was viewed as benign.



However, the `America First' policies of the Bush administration, with
its
unwillingness to honour International Treaties, along with their
aggressive
militarisation of foreign policy, has significantly damaged their
reputation abroad. Following 9/11, it appears that President Bush's
`warmongering rhetoric' has created global tensions by using unilateral
military forcewithout formal UN approval. Moreover, the
administrations
failure to actively engage in negotiations regarding the
Israeli/Palestinian conflict is unfortunate.



The international sympathy witnessed in the immediate aftermath of the
September 11th tragedy has been replaced with fear and anger. The Bush
administration's bellicosity has changed the worldview,
and`anti-Americanism' is proliferating even among close allies. Even
more
alarming are significant monetary shifts in the reserve funds of
foreign
governments away from the dollar with movements towards the
euro. Doubtless this was a topic of conversation between Bush and
Blair at
their Irish Peace summit. Discount the rumour that Bush mistook Iraq
for
Ireland when looking it up or booking his ticket. Bush wants to keep
the
UK out of the Eurozone. He is hoping that Chancellor Brown will
further
delay any embrace of the Euro, or find a new way to shore up an ailing
post-war dollar.



If the world community lacks faith in the Bush administration's
economic
policies, and along with OPEC, responds with economic retribution, the
plausibility of abandoning the dollar standard for the euro is
increased. An interesting U.K. article by Hazel Henderson outlines the
dynamics and the potential outcomes:



The most likely end to US hegemony may come about through a combination
of
high oil prices and the devaluation of the US dollar expected by many
economists. Some elements of this scenario:



1. US global over-reach in the `War On Terrorism' already leading to
deficits as far as the eye can see - combined with historically-highUS
trade deficits - lead to a further run on the dollar. This and the
stock
market doldrums make the US less attractive to the world's capital.



2. More developing countries follow the lead of Venezuela and China in
diversifying their currency reserves away from dollars and balanced
with
euros. Such a shift in dollar-euro holdings in Latin America and Asia
could keep the dollar and euro close to parity.



3. OPEC could act on some of its internal discussions and decide (after
concerted buying of euros in the open market) to announce at a future
meeting in Vienna that OPEC's oil will be re-denominated ineuros, or
even a
new oil-backed currency of their own.



4. The Bush Administration's efforts to control the domestic political
agenda backfires. Damage over the intelligence failures priorto 9/11
and
warnings of imminent new terrorist attacks precipitate afurther stock
market slide.



5. All efforts by Democrats and the 57% of the US public to shiftenergy
policy toward renewables, efficiency, standards, higher gastaxes, etc.
are
blocked by the Bush Administration and its fossil fuelindustry
supporters. Thus, the USA remains vulnerable to energy supplyand price
shocks.



6. The EU recognises its own economic and political power as the
eurorises
further and becomes the world's other reserve currency. The UKpegs the
euro and dollar into a trading band - removing these twopowerful
currencies
from speculators trading screens (a "win-win" foreveryone!). Tony
Blair
persuades Brits of this larger reason for the UKto join the euro.



7. Developing countries lacking dollars or "hard" currencies
followVenezuela's lead and begin bartering their undervalued
commoditiesdirectly with each other in computerised swaps and counter
trade
deals. President Chavez has inked 13 such country barter deals on its
oil,e.g., with Cuba in exchange for Cuban health paramedics who are
settingup clinics in rural Venezuelan villages.



The result of this scenario? The USA could no longer run its huge
current
account trade deficits or continue to wage open-ended globalwar on
terrorism or evil. It would have to cease pursuing
unilateralistpolicies,
rejoin the UN and pursue international cooperation.



As for the events currently taking place in Venezuela, items #2 and
#7on
the above list may allude to why the Bush administration
quicklyendorsed
the failed military-led coup against Hugo Chavez in April 2002.
Although
the coup collapsed after 2 days, various reports suggest theCIA and a
rather embarrassed Bush administration approved and may havebeen
actively
involved with the civilian/military coup plotters.



According to an article by Michael Ruppert, Venezuelan'sambassador
Francisco Mieres-Lopez floated the idea of switching to the euro as
their
oil currency standard a year before the failed coup attempt. There is
evidence that the CIA is still active in its attempts to overthrow
thedemocratically elected Chavez administration. In fact, this
pastDecember Uruguayan congressman Jose Nayardi exposed the ongoing
covert
CIAoperations in Venezuela. He claimed to have received copies of
top-secret communicationsbetween the Bush administration in Washington
and
the government of Uruguay requesting the latter's cooperation to
support
white collar executives and trade union activists to `break down levels
ofintransigence within the Chavez Frias administration.'



Venezuela is the fourth largest producer of oil, and the
corporateelites
whose political power runs unfettered in the Bush/Cheneyoligarchy
appear
interested in privatising Venezuela's oil industry. Furthermore, the
establishment might be concerned that Chavez's `barterdeals' with 12
Latin
American countries and Cuba are effectively cutting the US dollar out
of
the vital oil transaction currency cycle. Commodities are being traded
among these countries in exchangefor Venezuela's oil, thereby reducing
reliance on dollars. Ifthese unique oil transactions proliferate, they
could create more devaluation pressure on the dollar. Continuing
attempts
by the CIA to remove Hugo Chavez appear likely.



The US economy has acquired significant structural imbalances,including
its
record-high trade account deficit (now almost 5% of GDP),a $6.3
trillion
dollar deficit (60% of GDP), and the recent return toannual budget
deficits
in the hundreds of billions. These factors woulddevalue the currency
of
any nation under the `old rules.' Why is thedollar still predominant
despite these structural imbalances? While many Americans assume the
strength of the US dollar merely rests oneconomic output (i.e. GDP),
the
ruling elites understand that thedollar's strength is based on two
fundamentally unique advantagesrelative to all other hard currencies.



The reality is that the strength of the US dollar since 1945 rests
onits
being the international reserve currency. Thus it assumes the roleof
currency for global oil transactions (ie. `petro-dollar'). The US
prints
hundreds of billions of these petro-dollars, which are then used to
purchase oil/energy from OPEC producers (except Iraq, to some degree
Venezuela, and perhaps Iran in the near future). These petro-dollars
are
then re-cycled from OPEC back into the US via Treasury Bills or other
dollar-denominated assets such as stocks, real estate, etc. In
essence,
global oil consumption provides asubsidy to the US economy. The more
oil
used, the better America does. Yes, it is about oil.

The Europeans created the euro to compete with the dollar as an
alternative
international reserve currency. Obviously the EU would like oil priced
in
euros as well.



The `old rules' for valuation of the dollar and economic power were
based
on a flexible market, free flow of trade goods, high per worker
productivity, manufacturing output/ trade surpluses, government
oversight
of accounting methodologies, developed infrastructure, education
system,
and of course total cash flow and profitability. Superior military
power
afforded some additional confidence in the dollar. While many of these
factors remain present, over the last two decades, the US has diluted
some
of the economic fundamentals. Despite vast imbalances and structural
problems that are escalating within the US economy, the dollar is the
oil
currency. Developing nations, whose debt is denominated in dollars,
might
welcome a change.



In 1971 US president Richard Nixon took the dollar off the gold
standard
that had been agreed to at the Bretton Woods Conference at the end of
World
War II. The dollar is at a 16-year trade-weighted high despite record
US
current-account deficits and the status of the US as the leading debtor
nation. The US national debt as of April 4 was $6.021 trillion against
a
gross domestic product (GDP) of $9 trillion.



World trade is now a game in which the US produces dollars and the rest
of
the world produces things that dollars can buy. The world's
interlinked
economies no longer trade to capture a comparative advantage; they
compete
in exports to capture needed dollars to service dollar-denominated
foreign
debts and to accumulate dollar reserves to sustain the exchange value
of
their domestic currencies. To prevent speculative and manipulative
attacks
on their currencies, the world's central banks must acquire and hold
dollar
reserves in corresponding amounts to their currencies in circulation.
The
higher the market pressure to devalue a particular currency, the more
dollar reserves its central bank must hold. This creates a built-in
support for a strong dollar that in turn forces the world's central
banks
to acquire and hold more dollar reserves, making it even stronger.
This
phenomeon 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 recycling of petro-dollars is the price the
US
has extracted from oil-producing countries for US tolerance of the
oil-exporting cartel since 1973.



By definition, dollar reserves must be invested in US assets, creating
a
capital-accounts surplus for the US economy. Even after a year of
sharp
correction, US stock valuation is still at a 25-year high and trading
at a
56% premium compared with emerging markets.



The US capital-account surplus finances the US trade deficit.
Moreover,
any asset, regardless of location, that is denominated in dollars is a
US
asset in essence. When oil is denominated in dollars, the US
essentially
owns the world's oil for free. And the more the US prints greenbacks,
the
higher the price of US assets wll rise. Thus a strong-dollar policy
gives
the US a double win.



For the past 30 years, this arrangement has eliminated US currency risk
for
oil, raised the entire asset value of all dollar denominated
assets/properties, and allowed the Federal Reserve to create a truly
massive debt and credit expansion bubble. These structural imbalances
in
the U.S. economy are only sustainable if:



1. nations continue to demand and purchase oil for their
energy/survival needs, and

2. the reserve currency for global oil transactions remains the US
dollar only.



These factors, along with the reputation of US investments due to the
dollar's reserve currency status, propelled the US to economic and
military
hegemony in the post-World War II period. The introduction of the euro
is
the primary threat to that hegemony. Moreover, in December 2002 ten
additional countries were approved for full membership into the EU In
2004
which will result in an aggregate GDP of $9.6 trillion and 450 million
people, directly competing with the US economy's $10.5 trillion GDP,
280
million people.



A speech given by Mr Javad Yarjani, the Head of OPEC's Petroleum Market
Analysis Department, in a visit to Spain in April 2002, dealt entirely
with
the subject of OPEC oil transaction currency standard. Two of the
requisite variables he outlines for the switch have since taken place.



". . . The question that comes to mind is whether the euro will
establish
itself in world financial markets, thus challenging the supremacy of
the US
dollar, and consequently trigger a change in the dollar's dominance in
oil
markets. As we all know, the mighty dollar has reigned supreme since
1945,
and in the last few years has even gained more ground with the economic
dominance of the United States, a situation that may not change in the
near
future. By the late 90s, more than four-fifths of all foreign exchange
transactions, and half of all world exports, were denominated in
dollars. In addition, the US currency accounts for about two thirds of
all
official exchange reserves. The world's dependency on US dollars to
pay
for trade has seen countries bound to dollar reserves, which are
disproportionably higher than America's share in global output. The
share
of the dollar in the denomination of world trade is also much higher
than
the share of the US in world trade.

"Having said that, it is worthwhile to note that in the long run the
euro
is not at such a disadvantage versus the dollar when one compares the
relative sizes of the economies involved, especially given the EU
enlargement plans. Moreover, the Euro-zone has a bigger share of
global
trade than the US and while the US has a huge current account deficit,
the
euro area has a more, or balanced, external accounts position. One of
the
more compelling arguments for keeping oil pricing and payments in
dollars
has been that the US remains a large importer of oil, despite being a
substantial crude producer itself. However, looking at the statistics
of
crude oil exports, one notes that the Euro-zone is an even larger
importer
of oil and petroleum products than the US. . . .

". . . From the EU's point of view, it is clear that Europe would
prefer to
see payments for oil shift from the dollar to the euro, which
effectively
removed the currency risk. It would also increase demand for the euro
and
thus help raise its value. Moreover, since oil is such an important
commodity in global trade, in term of value, if pricing were to shift
to
the euro, it could provide a boost to the global acceptability of the
single currency. There is also very strong trade links between OPEC
Member
Countries (MCs) and the Euro-zone, with more than 45% of total
merchandise
imports of OPEC MCs coming from the countries of the Euro-zone, while
OPEC
MCs are main suppliers of oil and crude oil products to Europe. . . .

"Of major importance to the ultimate success of the euro, in terms of
the
oil pricing, will be if Europe's two major oil producers - the UK and
Norway join the single currency. Naturally, the future integration of
these two countries into the Euro-zone and Europe will be important
considering they are the region's two major oil producers in the North
Sea,
which is home to the international crude oil benchmark, Brent. This
might
create a momentum to shift the oil pricing system to euros. . . .

"In the short-term, OPEC MCs, with possibly a few exceptions, are
expected to continue to accept payment in dollars. Nevertheless, I
believe
that OPEC will not discount entirely the possibility of adopting euro
pricing and payments in the future. The Organization, like many other
financial houses at present, is also assessing how the euro will settle
into its life as a new currency. The critical question for market
players
is the overall value and stability of the euro, and whether other
countries
within the Union will adopt the single currency. . . .

"It's quite possible that as the bilateral trade increases between the
Middle East and the European Union, it could be feasible to price oil
in
euros considering Europe is the main economic partner of that region.
This
would foster further ties between these trading blocs by increasing
commercial exchange, and by helping attract much-needed European
investment
to the Middle East.

"In the long-term, perhaps one question that comes to mind is could a
dual system operate simultaneously? Could one pricing system apply to
the
Western Hemisphere in dollars and for the rest of the world in euros?
This
will remain the test for the euro, should the currency gain ground in
the
market of oil transactions.

". . . Should the euro challenge the dollar in strength, which
essentially
could include it in the denomination of the oil bill, it could be that
a
system may emerge which benefits more countries in the long-term.
Perhaps
with increased European integration and a strong European economy, this
may
become a reality. Time may be on your side. I wish the euro every
success."



Based on this important speech, momentum for OPEC to consider switching
to
the euro will grow once the EU expands in May 2004 to 450 million
people
with the inclusion of 10 additional member states. The aggregate GDP
will
increase from $7 trillion to $9.6 trillion. This enlarged European
Union
(EU) will be an oil consuming purchasing population 33% larger than the
US,
and over half of OPEC crude oil will be sold to the EU as of
mid-2004. This does not include other potential E.U./euro entrants
such as
the UK, Norway, Denmark and Sweden. It should be noted that since late
2002, the euro has been trading at parity or above the dollar, and
analysts
predict the dollar will continue its downward trending in 2003 relative
to
the euro.



The final two pivotal items that would create the OPEC transition to
euros
will be based on (1) if and when Norway's Brent crude is re-denominated
in
euros and (2) when the UK adopts the euro. Tony Blair is lobbying
heavily
for the UK to adopt the euro. If and when they do, a concerted effort
will
be mounted to establish the euro as an international reserve currency.



The pivotal vote will probably be Sweden, where approval this autumn of
adopting the euro would encourage Denmark to follow suit. Polls in
Denmark
now indicate that the euro would pass with a comfortable margin and
Norwegian polls show a growing majority in favour of EU membership.
It's
the British who are the real obstacle to the euro as international
transaction & reserve currency. So long as the United Kingdom remains
separate, reducing exchange rate costs between the euro and the British
pound remains their obvious priority. British adoption would mount
significant pressure toward repegging the Brent crude benchmark traded
on
the International Petroleum Exchange in London.



In other words, around 2005/2006, from a purely economic and monetary
perspective, it will become logical for several OPEC producers to
switch to
the euro for oil pricing. Of course that will devalue the dollar, and
hurt
the US economy unless it begins making structural and monetary changes
right away - or uses its massive military power to force events upon
OPEC . . .



President Bush has toppled Saddam to initiate massive Iraqi oil
production
in excess of OPEC quotas, to reduce global oil prices, and thereby
dismantle OPEC's price controls. The end-goal of is to use the `War On
Terror' as the premise to finally dissolve OPEC's decision-making
process,
thus ultimately preventing the cartel's inevitable switch to pricing
oil in
euros.



How would the Bush administration break-up the OPEC cartel's price
controls
in a post-Saddam Iraq?

FIRST, the newly installed regime will convert Iraq back to the dollar
standard.

NEXT, with the US military protecting the oil fields, the new ruling
junta
will undertake the necessary steps to rapidly increase production of
Iraq
oil - well beyond OPEC's 2 million barrel per day quota.



Despite its vast oil resources, Iraq has never produced at a level
proportionate to the reserve base. Since Gulf War 1, Iraqi production
has
been limited by sanctions under the oil for food program (by which Iraq
has
sold 60 billion dollars worth of oil over the last 5 years) and
whatever
else can be smuggled out. This amounts to less than 1 billion barrels
per
year. If Iraq were reintegrated into the world economy, it could allow
massive investment in its oil sector and boost output to 2.5 billion
barrels per year, or about 7 million barrels a day.



Total world oil production is about 75 million barrels, and OPEC
combined
produces about 25 million barrels. So the consequences would be the
collapse of OPEC, whose strategy of limiting production to maximise
price
will have reached its limit. An Iraq that can produce that much oil
will
want to do so, and will not allow OPEC to limit it to 2 million barrels
per
day. If Iraq busts its quota, then who in OPEC will give up 5 million
barrels of production? No one could afford to, and OPEC would die.
This
would lead to a collapse in the price of oil to the 10-dollar range per
barrel. The world currently uses 25 billion barrels per year, so a
15-dollar drop will save oil-consuming nations 375 billion dollars in
crude
oil costs every year.



Abandonment of the dollar standard is America's Achilles Heel. The
current
administration has returned to massive deficit spending. Investor
confidence is weak. Their economic and tax policies may be
exacerbating
the weakness of the dollar. An attempt by OPEC member states in the
Middle
East or Latin America to switch to the euro as their oil transaction
currency standard could be met with US intervention. The US is unable
to
address the structural weakness of their economy due to massive debt
manipulation, unaffordable 2001 tax cuts, record levels of trade
deficits,
unsustainable credit expansion, corporate accounting abuses, near zero
personal savings, record personal indebtedness, and reliance on Middle
Eastern oil.



Bush is determined to secure a large portion of the earth's remaining
hydrocarbons, and then use Iraq's oil to destroy the OPEC cartel. The
US
may suffer not only from increased terrorism, but economic retribution
as
well. Is it moral to deploy soldiers to enforce US dollar hegemony,
and
feed our need for oil? Is it acceptable for a US President to threaten
military force upon OPEC nation states because of their sovereign
choice of
currency regarding their oil exports? I concur with Dr. Peter Dale
Scott's
sentiments on these questions:

". . . hopefully decent Americans will protest the notion that it is
appropriate to rain missiles and bombs upon civilians of another
country,
who have had little or nothing to do with this (financial) crisis of
America's own making. . . .

". . . A multilateral approach to these core problems is the only way
to
proceed. The US is strong enough to dominate the world
militarily. Economically it is in decline, less and less competitive,
and
increasingly in debt. The Bush peoples' intention appears to be to
override economic realities with military ones, as if there were no
risk of
economic retribution. They should be mindful of Britain's humiliating
retreat from Suez in 1956, a retreat forced on it by the United States
as a
condition for propping up the failing British pound.



The US people must demand that their government begin the long and
difficult journey towards energy conservation, the development of
renewable
energy sources, and sustained balanced budgets to allow real deficit
reduction. They must repeal the unaffordable 2001 tax cuts to create a
balanced budget, enforce corporate accounting laws, and substantially
reinvest in our manufacturing and export sectors to gradually but
earnestly
move our economy from a trade account deficit position back into a
trade
surplus.



The G-8 nations must convene a new Bretton Woods Conference to reform
the
global monetary system to accommodate the inevitable competition from
the
euro as an alternative international reserve currency. The U.S.
government
should agree to the euro becoming the next international reserve
currency,
and advocate that the dollar and euro be placed into an `exchange band'
with reserve status parity. This would facilitate the vital creation
of a
dual OPEC oil transaction standard. It would also seem prudent to
investigate a third `Asia bloc' of the Yen/Yuan as reserve currency
options
to give balance to the global monetary system. Regrettably, the Bush
administration's political ideology is incompatible with balanced
budgets,
conservative fiscal policies, and engaging in multilateral foreign
policies
while seeking broad international cooperation.



Thomas Jefferson insisted that a free press is vital, as it is our
best,
and often the only mechanism to protect democracy. The US mass media
has
been reduced to a handful of consumption/entertainment and
profit-oriented
conglomerates that filter the flow of information. They have failed in
their responsibilities to inform the People. The Internet is our only
source of real, unfiltered news.

 http://www.indymedia.org/