Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and Geos,,. Page | of 42 tek to CA aie ine ats as S95, (DE pigs Fossxt | ASCH formas) Revisited - The Real Reasons for the Upcoming War With Iraq: ‘A Macroeconomic and Geostrategic Analysis of the Unspoken Truth by Wiliam Clark ‘wres2@a0l.com Original Essay January 2003 -Fevised laren 2009 “Postwar Commentary January 2004 “Toth living we owe respect, but 10 the dead we own only the truth Voltaire Contents ote oases + Sammary ‘A Macroeconomic and Geostategic Analysis af the Unspoken Teah © Sytopas © Rorences + Addendum: Notable Intemational Monetary Movements © European Carmen on the Esa “The Rial Reasons forthe Upcoming ia With ast Saving ne Amercan Experiment (arch 10,203 © erences + Post War Commentary (January $, 2004) ‘© Soncusion 6 flr + Additional Recommended Reading "Noe treads: "would he to thank te tunctods of people tom a ver he woh emaled me psive eedhack thoughout 2003 wih respect Yo my research and intel based essay on tho iraq war. Based on your overwheningty postive feedback and my own senso of parte day, Iam curry wing a ook based on Mis research ‘akitoraly, | am alco woking with a former goverment ecanoms const an empl mode tying the possbio effects of te dolar valalon in ospanse toe eulacrteney plang mechanism lor OPEC preducas "The resus of wi hopstly be inte inte proposed fomhcemng beck, erately ented: aoa Warr: Ol ea. and the Fut th Doar (Avaae Fal 206) For thos who are aad) fama wth my orgal pre-war essay rom January and March 2003, you may wart to ‘kp the opening pars of hs essay and review the expanded eacton expiring the imporanes 0! Hyeoeabns regatding Pook ol and US Geastalegy, and hen fie my someuhat rg Update om Januaty 2004. The ‘main at om my otal assay year ago was an enconive focus onthe acreconom palspactves of rag warn his essay. and inthe forthcaming book, have attempt to remedy ts Geteleny by cing 8 otal analysis ofthe ol depoton/goosatge aspects, whch appear tobe sacord coalescing acer tal ead to the rag war. For comments emai: wice2@acl com ‘Summary mhtmnlsfilevC:Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono...._ 1/9/2011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and Geos,,. Page 2 of 42 though completely unreported by the U.S. media and government, the answer to the Tra enigma is ‘ple yet shocking ~ iis in large part an ol eurreney war. One of the core easons for this upcoming ‘war I his administration's goal of preventing further Organization of the Petroleum Exporting Counttes (OPEC) momentum towarde the ear as anol transaction carrey standard, However, i ord to pre- {emipt OPEC, they need to gain geo-trategic contol of Iraq along with its 2ad largest proven oi eserves ‘The second eoaleseing factor thats driving the Iraq war is the quiet acknowledgement by respected oil geologists and possibly this administration i the impending phenomenon Known a5 Global “Peak Oi ‘This is projected wo occur round 2010, with fag and Saud Arabia belng the final two aafons to reach peak oil production. The issue of Peak Oil his Been added to the scope of this essay, along with the ‘macroeconomics of ‘petrodollar recycling’ and the unpublicized but genuine challenge to U.S, dollar ‘hegemony from the euro as an alternative ol tansaction currency, The authoe avocates graduated reform ‘ofthe global monetary system including a dollauro cumency “Maing bund wih reserve satus party, ‘dual OPEC oil transaction standard, and multilateral treatise via the UN segarding energy seform, Such reforms could potemially reduce future oil cureney and oll warfare. The essay ends with a reflection and critique of eurent US economic and foreign policies, What happens in the 2004 US elections will have large impaet on the 21st century, Revisited ~ The Real Reasons for the Upcoming War With Ira ‘A Macroeconomic and Geostrategic Analysis of the Unspoken Truth “ita naton expect tobe ignorant and he, expects what never wae and never wil be.. The People cannot be hie out tration: Won be ooo to adevey mano abt fo ead as 2a “Those words by Thomas Jefferson embody the unfortunate sate of asics that have eset our nation. As ‘our govement prepares fo go 10 war with Iog, our country seems unable fo answer even the most basic ‘questions about this upcoming confit. First, why is there a lack of a broad intemational calklon for toppling Saddam? If tag(s old weapons of mass destruction (WMD) program truly possessed th threat level that President Bush bas repeatedly purported, why are our historic alles not joining a coalition 19 nilitanily disarm Saddam? Secondly, despite over 400 unfetred U.N inspestons, there has heen no evidence reported that Ira has reconstituted its WMD program, Indeed the Bush administration’ elaons about lags WMD capability appear demonstrably false. 1] (2) Thi, and despite Pesideat Bush's repeated claims, the CIA has not found any links beeen Saddam Hussein and Al Queda. To the contrary, som ineligene analysts believe it i more likely Al Qaeda might aguire an unsecured former Soviet Union Weapon(s) of Mass Destruction, or potentially from sympathizers within « destabilized Pakistan ‘Moreover, immediately flowing Congress’ vote onthe Traq Resolution, we suddenly became informed of North Korea's nuclear program violations. Kim Jong Il processing uranium in onder to produce ruclear weapons this year (It should be noted that jut after coming ino office President Bush was Informed. in January 20010f North Korea's suspected noclear program). Despite the obvious contradictions, President Bush has aot provided a ratomale answer a8 to why Saddam's seemingly dormant WMD program possestes a more imminent creat that North Koreas active muclear weapons rogram Millions of people in the U.S. and around the world sre asking the simple question: "Why attack Taq now Wel, behind all the propaganda is @ simple truth ~ one of the core drivers for toppling Saddam fs actually the euro cuteney the ~ €. Although appavcutly suppressed inthe U.S. media, one ofthe answers to the Tag enigma is simple y shocking. The upcoming war in Iraq war is mostly about how the CIA, the Federal Reserve and the ushiCheney administmtion view hydrocarbons at the geo-strategic level, and the unspoken but ‘overarching macroeconomic threats othe US, dollar from the euro, The Real Reasons fr this wpeoming ‘war i this administrations goal of preventing further OPEC momentum towards the euro as an oll leansaction curency standard nd to secure contra of Ia oil hare the onset of Peak Oil (predicted to ‘cur around 2010), However in order to preempt OPEC, they need to gain geostrategic contol of aq along with its 2nd largest proven oil reserves. This essay will discuss the macroeconomics of the mhtmnlsfilevC:Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono...._ 1/9/2011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and Geos,,. Page 3 of 42 petadllar and the unpublicized but real threat 40 U.S, economic hegemony from the cto as an ternative of transaction cureney, The following is how a individual very well verse in the nuances of ‘macroeconomics alladed othe unspoken truth about this upcoming war with ray “Th Federal Reserve's gests! nightmare i that OPEC wil ete ts inenatona ansactons om ‘adil standard to @ euo standard aq actualy made hs swish Nov. 2000 (when the euro Was ‘woth around 82 con), and has actualy made of tho a bandit considering the dos steady ‘deprecation agains the euro (Note the dolar decinad 17% gala he ewe in 2002) “The real reason the Bush adinisaton watts @ puppet government in aq ~ x more impotanty, ‘te reason wy the corporate mtr nautil netwonc sngiomerst wart 4 puppst gover Iraqis 20 at wl vert back fa Gola standard anny tat way" (Wie ao apn ovat {ny wider OPEC momentum owas the eur, especialy rom han ~ te 21 largest OPEC proce ‘who I actively scusing swe to euros fo Ol export) Although a collective switeh by OPEC would be extremely unlikely baring 4 major panic on the US. dollar, t would appear that gradual anion Is quite plausible. Furthermore, despite Soudh Arabia ‘being eur elon state’ the Saudi regime appears increasingly weak/theatened from massive civil umes. Some analysts believe civil unrest might wnfold in Saudi Arabia, tran and ofher Gulf sates in the aftermath of an unpopular U.S. invasion and occupation of [ag]. Undoubtedly. the Bush administration {fs acutely aware ofthese ssks. Hence, the noo-conservative framework entails large and perma rilitary presence in the Pesian Gulf region ina postSaddam era, justin ease we need to staan and control Saudis large Ghawar oil feds in the event of a Saud coup by an an-westem group. But fiat backto Ing, “Saddam sale his fate whan ha dese to steht the eu in late 2000 (an ater converted his ‘0 blo reserve und a he UN: to eucs) ~ lal po, snohar manulactred Gul War carn ineitabie under Bus I On the most stems ckeemstances could possibly stop that nom and ‘Stony cout anyting can ~ short a Sascam geting epaced wih a plan regime. “fig Plu Perspective: Everything eee aide tom the resanve curency and the Saucitian i Issbes (1. domestic pola sues and nenatnal cies) Is peripheral ae. ot marginal ‘consequence tots admnstaten Further, the dal euo tveat s power enouzh that ey wi father tik much othe aconemie backs in he shorter ta stave ot he long ar cla cea ‘an OPEC tansecton standard change frm dotars to euros. Al ofthis ts to the broader Goat ‘Gamo hat encompasses Rusia, Ida, China” “This information about fags oil cureney is not discussed by the U.S. media or the Bush administration as the truth covld potentially cartil both investor and consumer confidence, reduce consumer borowingspending, crate politica pressure w form & new energy policy that slowly weans us off ‘Midde-Eastem ol, and of course stop our mac towards a war with Ing. This quasi “state secret bs dressed in a Radio Free Europe article that discussed Saddam’ switch fr his oi sales fom dollars 19 the curs, to be festive November 6, 2000 “Bopha saitch om the dol othe euro fr of ding is intonded to vbuke Washinton’ had tne on sanctens and encourage Europeans to challenge &. tte piel message wl cost aq mllons fost rveruo. RFE/RL covespardent Charles Rechnagalecks at what Baghdad wil gan ‘andlos, an the pact ofthe decson to go win he European cuore.) Atihe dime ofthe switch many analysts were surprised that Saddam was willing give up approximatel '$270 mili in oll revenue for what appeared to be apolitical statement. However, contrary {0 one ofthe ‘main points of this November 2000 article, the steady deprecation of the dollar versus the euro since late 2001 means tha Iraq has profited handsomely from the switch in their reserve and Wansaetion curencies. Indcod, The Observer sueprisingly divulged these facts in recent article enilec “Iraq nets handsome profit by dumping dollar for euro, (Febeuary 16,2003), “bizare pia sstamant by Sadun Hussain nas eae aa win of hunced of ions of ‘exis. n October 2000 Iraq insted upon dumping the US Dolar the currency of ie enemy’ ~ for ‘te more mutlaral euro 13} mhtmnlsfilevC:Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono...._ 1/9/2011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and Geos,,. Page 4 of 42 mhtmk: Although Ia il currency switch appears to be completely censored by the U.S. media conglomerates, this UK ariel illustrates thatthe euro has gained almost 25% against the dollar since late 2001, which also applies 1 dhe $10 billion ia Woq's U.N. ol oe fod seserve fund that was previously held in dollars fas also gained that same percent vale since the switch, It we reported in 2005 that Iags UN reserve fapd had swelled feom S10 billion dollars to €26 billion euros. According wo a former governme ‘analyst the following scenario would occur FOPEC made an unlikely, but sidden (colle) seh 19 eros as opposed toa gradual ransiton “Ofna fan OPEC sith ote er woe that -consing mons woud have {2 ts clas ou or (cna ba acne toad ops ese auc. The ar ‘out rsh ante om 200% hve eae corsemnos wale ae one cad eet {om ay eoneny clan armas stn (ek aro siren, example) a surely. tea un on the banks much like the 1990s, the current account deficit would become Users, th ct tet wold gon dat Andon Yorba re wr! enemie “The Unc Sates economy eimai Yo doar role a reseve curency. Tis doesnt roan thal the US. coulda function eheriso, but tha the Uarlion would have fo be gad to {oid sich dilecaons (and the uta rest of this woul prosabiy be te U.S. an the. Seiching 8s inthe gltal economy, the above scenario is unlikely, and most assuredly undesirable, under certain economic conditions its plausible. In fact, one of the conditions that could create such an envionment isa near lateral U.S. led ar inthe Mile Fast. For example a large spike in oil pices could create huge problems forthe imperiled Tapansse banking system, the world’ largest holder of U.S. dollar reserves. Unfortunately the curent Bush administration has chosen a military option instead of a maliatrat conference on monstay reform to resolve these isses. Inthe aftermath of toppling Saddam it is clear the US. will keep a large and permanent military force inthe Persian Gul. Indeed. there iso talk of an exit strategy,’ a8 the aultary wil be needed to protect the newly installed regime, and to send a message 19 other OPEC producers that they too might rocoive “rime change’ if they conver ther oil payment 19 [An interesting yet again endereportsd story fom last year relates to another OPEC “Axis of Ei ‘ouniry ran, who s vaellating on pricing thet oi export in the euro cureney “ram's proposal orev payments fr crc ol alas to Eizope aos insta of US. da is based pray on ceonomes, ranian and indus sores sla “But pots ae st key te a factor n any decison, fey sad, a an wes te opportunity to Nt bick athe US. governmert, hie eco abeled I par tana of el “The propel, whichis now bong evened by te Genta Bank of Kan ely > Be sppeoved proven othe cout’ partament, pariamertary represent so Thor avery good chance MPs wil age otis ea... now that he eure is svenger, is move logeal the patamontary representa sa.) ‘Moreover, and perhaps mos telling, during 2002 the majoiy’of reserve funds in Ian's central bank were shifted to euros. Itappears imminent they intend to switch ol payments to euros, “More tan hat fan] he cour assets inthe Forex Reserve Fundhave been converted te euro, ‘2 meme ofthe Partament Deveigpnent Commission, Nohammad Abasspour announced. He rote that higher party rte of ro agains the US dolar wil ie the Aan coun, partly a ‘exporters, a chao fo usar n anew chapter in is wen European Unions member countes “He sald na the Une States dominates otter counties Brough Is currency, not tht gven te supononty of the dolar sganst other hard carendes, the US monapolzes global tase. The loner expressed hope thal tbe cortiton between euro and doll woud eliminate the monopoly glbal a6") le: C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and Geos,,. Page 5 of 42 After topping Saddam, this wministration may decide tha ran’ disloyalty to the doar qualifies them as the next target in the war on teroe” Ins interest in switching w the euro as thei cureney for oil expos well documented, Peshaps U.S. operations agaast lean will be mostly covert, bu this MSNBC ticle alluds to ultimate objoctives ofthe neo-conservatives. “niet ranging over now to overtvow ia’s Saddam Husson, the Bush aan Is ready ooking fr oer amet. President Bish has cal for he ote of Paestrianlacr Yas ‘ala. Now seme inte admitation ~ and alles a D.C. tik tanks ~ ave eyeing anand even Sata Arabia. As one sence Bish offi pu: Evoryane warts fo g to Baghdad Real men want togotoTenan (3) Aside from the geopolitical risks regandng Saudi Arabia and Irn, another risk factor is actually Japan, Pechas the biggest gamble ina prracted Iraq war may be Japan's weak economy. p} If the war erates srolonged oll high prices ($85 por hare over several mors) or short but massive ol pice spike (S80 (5 belleve Japan's fragile economy would collapse, Japan i= quite ts banks default, the collapse ofthe second largest economy would st in motiona sequence of events that could prove quite damaging tothe U.S. economy. There is litle doubt the Iraq war plan is designed to he a quick victory, wit the U.S. military suring Iraq's vital il fields at the very onset oF hess. "Nonetheless, other risks might arse if the rag War goes poorly or becomes profonged. Its possible that civil unrest may unfold in Tran, Saud Arabia o¢ other OPEC members in the Middle East Such events could foster the vey situation this administration is uying t prevent: another OPEC member switching cil transition currency standard the Final “Axis of Evil! country, North Korea, recently decided to oficilly drop the della and begin using euos for vade, effective Dee, 7, 202, [10] Unlike the OPEC- producers, Now Kovels have negligible economic impact, bu i ilustes the geopolitical fallout of President Russ harsh rhetoric. Much more troubling is North Korea's recent action following the oil embargo of thir ‘ouniey, They’ arin dite ned of oi an fo; and ina ast of desperation they have re-activated their ‘re-1994 nuclear program. The re-grocessing uranium Fuel rods appear tobe aking place, and it appeaes thelr strategy Isto prompt negotiations with dhe U.S. reganing food and oi. The CIA estimates that North ‘Korea could pradice 4-6 nuclear weapons by the second half of 2003. Ironically. this ess ver Nomth ‘Korea's nuclear program further confirms the fraudulent premise for which this war with Saddam was entirely contrived. During the 1990 the world viewed the US. as a mur selPabsorbed but essentially benevole superpower. Miliary actions in Iaq (1990-91 & 1998), Serbia and Kosovo (1999) were undertaken with [NATO cooperation and UN involvement, thereby affording these operations with a sufficient level of foternational egiimacy. President Clinton also worked to reduse tensions in Nome Irland and sltempted to negotiate resolution to the Israsli-Palesinan conflict. With the exception of the Middle Fas, our superpower staus was viewed as mostly benign. Our ade imbalances were tolerated, and balanced fiscal policies provided confidence, However in oth the pre andl post 9/11 inervls, the “Ameria fist’ polices ofthe Bush administration, ‘with its unvilingness to honor Intemational Treats, along with thelr aggressive mitra of foreign policy has significantly damaged our reputation abwoad. Following 9/1. appears that President Bush's ‘warmongering rhetoric’ has crest global tensions ~ as We are aow viewed asa belligerent superpower ing © apply unilateral military force without U.N. approval. Moreover, this administration Faire to actively engage in negotiations regatding the IsraelPalestinian const unfortunate, Lameatably, the {aomendous amouat of intenatlonal sympathy we witnessed inthe immediate aftenmath ofthe September th tragedy has boon replaced with fear and anger at our government. This administration’ bllicosty dna changed the worldview, and “anti-Americanism is proliferating even amoag our closest allies. 11} Equally alarming, snd completely unreported in the US media, are significant monetary shifts in the reserve funds of foreign goveramenss away from the dollar with movements towards. the mhtmnlsfilevC:Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono...._ 1/9/2011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and Geos,,. Page 6 of 42 ‘oro, 1219] (24) 1 appears the world community may Tack fit inthe Bush administration's flawed ‘evonomic polis, snd along with OPEC, seem poised to respond with economie retnbuton ithe US. ‘government is regarded as an uncontollable and dangerous supespower, Despite the absence of media coverage, the plausibility of slowly abandoning the dollar standard for the cuo is teal. An aicle by ‘Hazel Henderson outlines the dynamics andthe potemtial outcomes: “The mest aly end 1 US hapemony may cume about thcugh 8 combination a hgh of ces (brought about by US foreign poicies toward he Middle East) and deeper devauaton ofthe US ‘ola oxpoctd by many economist). Same olomonts of ths scone: 1. US gobal orecteach inte war on tres akeadloaig defi as far asthe oye can 20 = contined ih hsoreally. high US ade dees = ead toa rhe tn on the doar “This ane he stock market dldrums make the US les atactva tthe wor cpt 2, More developing counties follow the lad of Venazusla and China i dvesiying thee curoreyroseres away Rom dolar apa balanced with eures. Such a sh I doll-2ur> holdings in Labn America ad Asia could ap the daar and euro coset party. {3 OPEC could act on some ofits ioral Oscussons and decid (ar concerted buying of ‘euros nthe opan matte announce al autre meeting in Vena thal OPEC's ol al be a= ‘Senominaed im euros, of even 2 new obackedcurency of tet oan. US atack on 55 ‘sends oft 40 (euros) per bare, 4 The Bush Amintratons effort 0 contr! th comes political agenda bacfes. Oamage ‘ver the Ineiganes fares prot to 9/11 ana warnings of mnnent new feos atk ‘recital a uter sock mane kde. 5. A eons by Demeerats and the 57% of the US puble 1 ih energy poly toward fenewabes, storey, standards, higher gas taxes, ete. are blocked by the Bush ‘Admiisraion ae is fossis ful Faust supporters. Thus, the USA remans vulnerable ‘nergy suply and pice shocks 1. The EU recognizes Ms oMn eonome and polial power a8 the exo es futher ad becomes he Wes the ose cteney. The G8 pogs the ere and dalla te a wash ‘and removing these two power crencies ftom spacuistors racing sreens (awn wh for everone) Tony Blar perauades Bre of thslarger reason foto UK jon the eu, 7. Developing counties lacking dlrs oF “hue” curensies flow Venezusl' load and beg barteneg heir undereued Conmadtes drecty win each cher compateted Sapa and ‘countr tage deal. President Chavez has sed 19 such county barter dese on fs, ©. win Cuba in exchange for Cuban health pavamedies who aro seting Up cies In ual ‘Venezuelan Vilage “Te result of is seenaio? Te USA cout no fonger run ts hp cuent acount rade dis oF continue to wage open-end global war on tearm ore. The USA casa pursuing unterat poleies Anew US administration begins 1 retum is mtlteraist action, ceases is cbetucton ‘a eons the UN ar pursues mare reals nternatonal coopera [5] As for the events cumently taking place in Venezuela, items #2 and #7 on the above list may allude 19 ‘shy the Bush administration quickly endorsed the filed military-led coup of Hugo Chavez in April 2002 Although the coup collapsed afer 2 days with Chaver being restored to power, various repos suggest te CIA and a rather embarsssed Bush administration approved and may have been actively involved ‘with the civilian military coup ploters. “oige W. Busts sdmiisation was the faled coupe pea ose, underscomng its berkupt hemp pley. Now tis soa Weng out atin fect monthe Whe Huse ots mat wih tay coup tques, inclaseg Carmona. Alheugh the adransraton Ms that # exp abject to ‘any wxtaconstitonal acon to remove Chaves, comments by senor US. offal dd he 1 camey is. “The CIN rola in 1971 Cilean tke cous have served asthe working model for generating ‘economic ad social nstaity in over To topple Chavez. Inthe truckers ste ofthat year, the ‘agency Seca orchesatd and franced the arial prolongation a a conived work sopoage mhtmnlsfilevC:Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono...._ 1/9/2011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and Geos, mhtmk: ‘order to economical apy the ost Salvador Alans government “This scenario would nave had CIA opratwos acting in alson wr the Venezuelan mitay, 26 well 28 wth opposition tushess end leborInadera to conve a ralatvaly minor aflemoon ong work ‘stopeage by senor management ito a near success coup de gre. ['] ncresungly, acconding wo an arcle by Michael Rupport, Venezuela's ambassador Francisco Miews- [Lopez apparenly floated the idea of switching to the euro approximately ene year hofor the failed coup temps. Furthermore, there fs some evidence that the U.S i til active i ts tempts to overthrow the Semocratially elected Chaver administration. In December 2002 Uruguayan government official cexpored the ongoing covert CIA operations in Veneta: -unyguayan EP-FA congressman Jose Nayar says he has infomation that faresching plan have ben put int place by the CIA and oot North American inligence agences to overtow ‘Vonazvolan President Hugo Chavez Flas wit he eet 72 Nous Nayarc ays ne has recived copie af tp secret communications betaoen the Bush adnsisation in Washington and tie goverment of Uruguay requesing te laters cooperation to support white ‘colar sxocuves and rade union acs fo break down levels ofrransigenes within fhe Chavez Frias admnisaton” [17] ‘Venere is the fourth largest producer of wil, and the corporate elites whose political power rans ‘unfetered in the Busi/Cheney oligarchy appear interested in privatizing. Venezuela's i industry Furthermore, the establishment might be concemed that Chavez's “barter deals’ with 12 Lata American ‘countries and Cuba are elfectvely cutting the U.S. dollar out of te vt oil eansaction currency cycle (Commodities are being traded among these counties in exchange for Veneruel's el thereby redicng reliance on fiat dollars. If these nique ol transactions proliferate, they could ereate more devaluation pressure on the dollar by removing It from its crucial "petroveeycling’ role, Continuing atlempts remove Hugo Chaver appear likly. “The USS. economy has acquired significant structural imialances, inclading our econ-high $505 billion leade account deficit (5% of GDF), a $6.9 wilion dollar deficit (60% of GDP), and the resent return 19 snnual budget deficits in the hundreds of billions, Thess imbalances ane exacerbated by the Bush ‘administration's ideologically driven tax and budget pollsis, which ae erating enormous defies for the 1 of this decade. These Factoes would significantly devalue the eurency of any ater nation unde the “rules of economics’ Why isthe dolar till the predominant currency despite these structural imbalances, and why docs it appear fmmene from our twin deficits? While many Americans assume the strength of the US. dollar metely es on our economic output (GDP), the ruling elites understand that the dollar's strength i founded on two fundamentally unique advantages relaive oa other hard curtencls ‘The reality is thatthe "safe habod” status ofthe U.S. dollar slace 1945 ress oa it helng the intentional reserve currency, Thus it has assumed the foie of sole cumency for global oil transactions (ie “pttoollae), The U.S, prints hundreds of billions of fa dlrs, which U.S, consumers provide to other ‘ations via the purehase of impored goods, These dollars become "petrodllrs” when are then used by those nation sales to purchase ollenergy from OPEC producers (except Ig, to some degree Venema, snd perhaps ran inthe near future). Approximately $600 to $800 billion “petrodollars’ are annually from ‘OPEC and invested back ino the US. via Treasury Bills or othe dolar denominated assets such as US, socks, bonds, real esta ete. This eeysling bolsters the dollar's ntemational liquidity value According to ressarch by De. David Spi, in 1974 the Nixon administration nogotited assurances from ‘Saudi Arabi to price oil in dollars only, and invest heir surplus oil proceeds in U.S. Treasury Bills, kn return the U.S, would protect the Sat regime, According to his book, The Hidden Hand of American Hegemony: Perrdollar Recycling and International Markers ie these purchases were done in eative secrecy, These agroements created the phenomenon known as *pettodollar recycling.” In effec, global consumption via OPEC provides a healthy subsidy to the US. economy. Hence, the Europeans created the cura 1 compte with the dollar asa alternative Intemational reserve currency. Obvioly the FU, ‘would also like oll priced in euros 38 well, as this would reduce or eliminate thelr cuneney tsk for oll le: C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., Page 7 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and Geos,,. Page 8 of 42 purchases “The ‘old rues for valuation ofthe U.S. dollar currency and esonomic power were based on our flexible market, fee flow of trade goods, high per worker productivity, manufacturing outpa trade supuses, government oversight of accounting methodologies (Je, SEC), developed infeastuctue, education system, and of course total cash How and profitability. Our superior military power afforded some additional confidence in the dolla, While many of these factors remain presen, over the last ewo decades we have ilted some of the “safe harbor cconomic fundamentals, Despite vast imbalances and stuctoral prblems that are escalating within the U.S. economy, since 197. the dollar as dhe monopoly ol eure cewated “new rules The following excess ftom an Asia Times attle di petrodollar hegemony (or vices from the perspective of developing nations, whose debt is denominated in elas cusses the virtues of our “Ever ince 1971, when US president Para Noon tok the dla of he gold standard at $5 par ‘ource) tht had been agree fo athe Breton Woods Conference a the end of Word War th ‘Solar has been a gobal monet insvument that he Untod Sats, and ey the Unto Stats, can 0.8 by a. The doar, now a fat croncy, fata T6 yea ado. weighed igh doxpto record US ‘uen-acount dais ard the sli ofthe US as the lading dabor natn The US natenal dab ‘os ot Apr 4 was 65.02 Won agaist gross comes product (GOP) ot $n, “Wer wade i now a gama In which the US prodicesdolays and the est ofthe wos produces things tat dollars can buy. The work's inrinked economies no longer ace to capt. a ‘comparatie advantage, hey compete in exports to capure needed dors fo sence dole “Seomina Tovagn Sets ano aunt doar reseries to stan the exchange valve o hee ‘domenie carences, To prevent specuaive and manipula stacks on thee cunt, he wonds ‘cert banks mut acqute and Nld collar ereres in corespondng amount other curenies ‘revlon, The igh the mare! presse to eval a pasularcurrecy he more dla reseves its contal bank must het. This creates a builtin super fr a strong doi that in tun fores tho ‘wort cenval banks to ange and had move daar voeved, making Wt sionger. Ti penomenon, isknown as dalarhegeony, nic is created by the goopolcaly contacted peculiar ‘commadties most neal 0, are denominated n cobs. Everyone asp colts because dolars ‘an buy oi. The ryeing of pete-coas is the pre the US has exacted fom ol producing ‘ountne for US toleange ofthe ol exporting carl since 1972, “By daintlon, dollar resaves rust be invested in US asses, creating capital accounts sli fr ‘he US economy. Even ate «your of shafp exec, US stock valuation i il a @.25 year Nh ‘ad tacng ata 96 percent premium compared wih emerging markets ‘The US ceptataccountsupts in turn thaneas the US wade Gotct Moveover, any asset, regardess of lecaton, hat is deneminatc in dolats & @ US asset in essence. When el Is ‘denominated n dolar through US stale acon ana he dlr ft ecancy, the US essential ‘ne the works of for ee, And the move the US pents geeroacks the higher he pres of US ‘sce ise, Ths a song dolar poy gies the US a douse wn [8 “This unique geo-polcal agreement with Saudi Arabia in 1974 has worked to ou favor forthe past 30 years, as this arrangement has oliminated our curency sk for il, raised the enti asset valuc ofall olla denominated arsetspropertics, and allowed the Federal Reserve to create a truly massive debt and ‘reit expansion (or ‘sredit buen the view of some evonomists), These srustral imbalances in the USS. economy ate sustainable as longa 13 the thre internationally traded crude ol markers remain denominated in US dolars “These underlying factors, along with the “safe harbor reputation of U.S, investments afforded by the ollar's reserve currency status propelled the U.S. to economic and military hegemony in the post- Worle ‘War II peciod, However, the ington of the euro isa significant new factor, and appears 0 be the Primary theat w U.S. economic hegemony. Moreover in Deceinber 2002 ten addtional counties were approved for full membership into the F.U. Barring any surprise movements, in 2004 this will result in an aggregate E.U. GDP of $9.6 willion and 450 million people, delly competing withthe U.S. economy mhtmnlsfilevC:Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono...._ 1/9/2011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and Geos,,. Page 9 of 42 ($105 ition GDP, 280 mil om people) Especially imteestng fs a speech given by Mr Javad Yarn, the Head of OPEC's Petroleum Markst Analysis Departmeat, in wsit to Spain in Apil 2002, His speech dealt entirely with the subject of OPEC ‘ol wansaction currency standard with respect to both the doa aad the eur, The following excerpts from this OPEC executive provide insights into the conditions that would crete momentum for an OPEC ccurreney sic to the eur, Indeed, his candid analysis warrants careful consieraion given that two of the requisite varihles he outlines forthe switch have taken place since this spessh in Spring 2002 Alles regarding the euro and is potential to purchase oil are dseussed in the European and Asian ‘media, but have been completely unceposted inthe US. “The quston tha coms 10 mie Is whether the eur Wt establish salt WOH Hea rmatets bus chalnging tho supremacy ofthe US dar, and corsequenty Wager a change nthe ‘olars domnancsin of matets. Aa we akon, the mighty dolar as eked sipeme since 1945, and inthe as fw years has even ganed more ground wi the economie dominance ofthe United Slate, a stuation hat may nt change in he ea fare, By th Into 9s, more han furs fal {ocogn exchange rnsactons. and hal ot world expos, were denoninate n dlrs n a8, ‘me US curren ecoouns fr about Wo tds of sl ofical exchange teers. The WoIRS ‘dependency en US aolars to pay forbade has seen cours bound o dolar resawes, which 12 ‘sproporionably higher than Areice’s share m glbel cult Tho share ef the dllar inthe ‘erominaton of wor rade is aso much higher han the share of the US in woreade “Having said that tis worth ono tha in he fog un the eur not at sich a sadeanage ‘versus the doar hen ane compares te este szes ofthe ecoteies valved, especialy given ‘he EU erlngemont plans, Moreover, the Euo-zoe has tigger shre of slabs ade than he US ‘and iia te US neta nuge erent account dee. te aro area has & ave cr Balanced eternal ‘counts positon. One ofthe more competing arguments fer Kespng Ot prisng and payments olars has been thatthe US romans a lage mporer of ol dose being a substantial crue ookeet tel, Hower, foking at he sates eu a expos, Om rales thal he Evo-200e 6 ‘ eve niga inprta’ af of andpotleum products than he US. =. From he EUs pont of via tis oar hat Europe woul pete to sae payments for of shit omy ‘he dal tothe eu, which eltectily rernaved the cutency Fak woud ls neease demand fr the euro and thus hep aie vat. oreoer, shoe ol sich an mprant comme mls ‘rade Tem of vai. ping were fo sh To the eo, could provide a boos! To the gba ‘acceptably of he single eurerey. There is aso very song aco Inks between OPEC Member uni (MCs) ae te Eurozone, wth moe than 45 percent fal archandis pots ot OPEC Cs comng fom the counties ofthe Exo zone, whfe OPEC MCs are main supple of ol and ceude al puts to Europe, “Ot map importance tothe ultimate succes of he oun tems ofthe ol cng, willbe it Eurpe's ‘wo major ol grocers ~ the Unied Kngdem ard Norway Jen the sing carrey. Natural the {etre mtgraton of hese two aunts into the Eurozone and Esrope wl be mprtant consi ‘hey are the reg’ two major ol producers nthe Narh See, welch is hrs tothe ineraton ‘cute al borchmark, Brent. Ths mgt create a momemum to shit the ol ring system o sues. “in tho short tem, OPEC MCs, with possi afew exceptions, are expected fo continue to accept payment In dolar. Nevorolss, | bolove fat OPEC wil not dscount ene ho possi of ‘60p1ng eo peng and payments nthe uta, The Oganzaten ke many ober nancial houses ‘1 preset, is aso assessing how the euo wil sel Hols teas « new eusency. The teal ‘queaton tor market players he overall vlun sd laby of the ee, and wheter ater coures ‘tn the Union wil adept the single curency. “itis qute possi hat as he lateral rade crass between the Miche East an the Evropaan Unni coud be Tessie fo pce on eux cansiening Euope the ma economle pier ot ‘mat region. Ths would tose futher Wee between these Wrasg blocs by Meresing comme ‘exchange, andy helping alec muct-aeeded European vested the Mile Eas. “in tho longterm, pemaps one question that comes to mind is coutt & dual systom operate smuttanoousi/? Could one prong system apply tothe Westar Hemiephere lars and for tho test ofthe word in euoe? The wil man the tet forthe euro, shout the currency gen round in ‘he markot of ol wansations mhtmnlsfilevC:Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono...._ 1/9/2011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. mhtmk: ‘Should the eu challenge the lar in srength, which essentially coud include it the “denominaon af he a bi, eau ala sjslm may emetge whch nets mote courte inthe long. Perhaps wth increased European niyraton and asiong Europsan economy, hs may become a realty. Tie may be on you io. wh the euro every suseoss” 20), 'Basod on this impostantspocch, momentum for OPEC to consider switching to the euro will row ence te EU. expands in May 2004 1 480 million people with the inclusion of 10 adltional member states. ‘The aggregate GDP will increase from $7 teilion to $9.6 talon. This enlarged Exropean Union (EU) ‘ll be a ofl consuming purchasing population 3% larger than the U.S, and over half of OPEC crude cil wll be soli to the EL as of mi-2004, This does not include other potential EU euro entrants such as the UK, Norway, Denmark and Sweden, It should be noted that since late 2002, the euro has been leading at parity o above the dollar, and analysts predict the dollar wil continue its downward tending in 2003 retatve to the euro, 1 appears the final two pivotal tems that Would create the OPEC transition to ures will be based on (1) 1 and whon Norway's Bront cae is se-domiaated ia euros and (2) when the UK. adopts the euro Regarding the later, Tony Bsr is lobbying heavily forthe U.K. to adopt the euro, and thei adoption ‘woul som imminent within this decade. If and when the U.K, adops the euro carreney I suspect 3 concerted effort willbe quickly mounted t establish the eur as an international reserve curency. Again, 1 offer the folowing information fom an astute individual who analyzes these Intemational monetary smators vor carefull: “The pivotal ve wi probe be Smeden, where approval bs net aut facing he euro aso ‘wou give mersantum othe Danish goverment sang dese fa alow st, Pol Danmar now inceste atthe ero woul! pass wi a conforable margin snd Nonwegian pola show a gfoning ragrty in favor of EU membership. Indeed, wit Norway having aeady Iiegraisd mest EU ‘economic octies trough Ne EEA parnership and wih hor story appreciates curency, her ‘eossstan othe euro WoUd net ely be ees, bul of great econome beni “As go the Swedes, so pabebl wil go the Danes & Norwegian. Ise Bish who are the veal ‘bata to bung manent or the euro as inrnatens wansaclon& reserve currency. So long ‘3 he Uned Kingdom remains apt om eeu, radi exchange fate cone betwen the uo ‘and th Bitsh pound vena ther obveus poy. Erish adoption (a near-gven the lng run) ‘would mount sina pressure toward repegging the Brent crude Benchmark - which is waded on the Inematnal Peisim Exchange in London ~ and the Neneegiane would exdainy have no ‘bjecon whatsoever that ean Bk ot, hth ono they jn the Euopaan Uren “Finaly, the manauver toward vung he global deminance ol the dal ate sedy wolundoway ‘and have ony reason to aocsletie 20 far ar can se. An OPEC preg shit wot! eaem ater Unikely pot 204 ~ baring politcal motvatons (2. om andous OPEC members) ora csory ‘calapse ofthe dolar (ie. Japanese bank colapse duo high ol pres folowing a potonged aq ‘conf but appears gle vee oaks pace bette the ant he case Incthor words, beginning around 2004-2008, from a purely economic, trade and monetary perspective, ‘wll become logical for some OPEC producers to tasition to the euro Fr oll pricing. OF course that will seduce the dlla’sintorational demand/iquidity value, and hurt the US's ability to fund its massive be unless US. policy makers begin to make difficult fiscal and monctary changes right away ~ oF use ‘our massive military power to force events upon OPEC Facing: empuive a ces, ad thereby dismantle OPEC's price conls. The engl of the neo-conservatives is ier bold yet simple in purpose, to use the “war on teroe a the premise to filly dissolve OPEC’ deesion- ‘making proces, thus ultimately preventing the earls iaeviable sich to pricing oll in euros. How ‘woul the Bush administration break-up the OPEC cat's price somos in a post Saddam lag? Fie, the rewly installed U.S. ruler (Gen. Garner) will convert Iraq's oil expons hack to the dollar standart “Moreover, according to a Washington Post aticle just before the Iraq war, one of the pre-determined ‘ecisions of the "rah interim authority” in a postwar econoany is vo drop dhe lag dinar, ae cover fa tothe US. dll. le: C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., Page 10 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. “The ovact ole of he aurhory, when i would begin to tke over government functions ard who ‘would be pat of i ae slo be delaimined, according to ae senor admisaion fea. BU they dé sugges that in runing 2 poster aq economy the US. plas e subst. US. coast the aqictarany that bears a heness of President Sadan Hussain: 4] Page 11 of 42 ‘Obviously the “dollarzation of Lag would apply to the vital oil transaction curency issue, but T do aot ‘expect thit crucial “detal” tobe discussed in the U.S, medi, Following the war, withthe U.S. miltay pretectng the ol fi is, the new ruling junta will undertake the necessary steps to significa inrease ‘reduction of Iraq oll ~ Well beyond OPEC 2 milion barrel por day quota. Analy have predicted that faising Hols oil production back to pre“ "Nonetheless, geostral 990 levels will take betwoon several months or «wo yeas 1s such as Henry Kissenger suggested in 1973 that dhe US should invade the “Middle East, and dishand the OPEC cartel, Mr: Robert Dreyfuss discussed the history ofthese goals in his acle “The Thiny Year eh,” 22) Dt. Nayyer All offers a sucenct analysis of how Teas underuilized fll reserves w Geostrategic goal of providing the cricial economic instrament to leverage and dissolve OPEC not be a profitmaker’ forthe U.S. government, but will ull the mone important price ‘contol thas fliling the log sought-after goal othe noo-conservatives to disband the OPEC carte Dest thie vas poco ag has never produced ata lovel pepotonate tothe serve base. Sine th Gul War, ag’ producton has buen Hed By sanctions and alowed sles undo Be {or fooc progam oy wh rag Mas sod 60 bllon clare worth o ol er the fst 5 yar) and what lea ean be smuggled ou Thi amounts To ake fan 1 fllon tarts per year It aq were Tertgiated ino the word economy, fcoud aon massive ivestmert In fs ol sector and Dost ‘uit to 2 bilan bares pe yee, or about 7 milion bails =Total wot ol preduction is abeut 75 lion bares, and OPEC combined produces about 25min bate “what woud the consequonoss of is? Thee are wo obvious hing. “Fist woul be he colapse of OPEC, whose stay of ting production to maize price wit have finaly reached ts imi. An ra that can presuce tht och il wil want to Goo, and wl not ‘sow OPEC to ln to 2 milion bal pr day. rag buss ts qula then whe It OPEC wil ge up 5 rallon bartels pesucien? No one cou toro, and OPEC woud i. This woul ead to ‘he secand major consequetes, which sa colapa in he pie of tthe 10-dolar range per bal “The world cent uses 25 billon barrel per year, 80 @ Scalar rp wil save ol-consuming atone 78 llon dlrs onde ol cots every yea. “The ra wari nol a moneymaksr, But cou! be an OPEC breaker, That howsver ely: tm outcome tat wi gure aq to be successtuly reconstituted int a funconing sate whieh massive ol sector vestment can ake place" (23) ‘The American people ave oblisious to the potential economic sks regarding the Tag war, The Bush administration bolieves that by toppling Saddam they wil move the juggernaut thus allowiag the US 19 control Trois huge oil reserves, and finaly reak-ap and disolve the 10 remaining countries in OPEC. However, U.S, oscapation of frag could exacerbate tensions within OPEC or pechaps Iran, proving further impetus for momen sm fr pricing olin ewes. “This last issue is undoubtedly a significant gamble piniss war that topples Sada and leaves Iraq ol els intact, Undoubvedly, the OPEC cartel feel theatened by the goal of the neo-conservaives to break-up OPEC’ pre controls (S barrel. Poshaps the Bush administrations ambitious goal of loding the oll market with lagi i the best-case scenario of a elatvely quick and oad ‘work, bat Ihave doubts. Will OPEC simply tolerate quots-bustng Iraqi ol production, thus delivering to tema lesson ia inflicted hars-kis(suicidey? Contrarly, OPEC could meetin Vienna and in an act of slFpreseration re-denominat the ol curency to the euro. Although unlikely, such a decision would smack the end of US, dolla ho Again, [offer the analysis of an astute observer reganing the colossal gamble ‘undertaking: “one of the diy Ils sectets of ody international order is thatthe rst ofthe globe could topple mhtmk: einony, and thus the end of our precarious economies superpower status. this administration is le:IC:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono... 1/9/2011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. mhtmk: ‘the Und Sais tom ts hegemori status whenever they so cheose with a concer abardonment ff the dolar sander, Tha i Amerels preeminent, inescapable Actes Heo! or ow andthe foveseeabe ture “That such al course hasnt been pursusd to date boars more relator te the fac that her ‘westrzed, highly developed natons havent any ses o undergo the gla! spins wich woul fol ~ but oul assuredly take plas inthe vent thalthe consonsu view coalsoas ofthe Untod States a5 any sot of rogue’ akon. In other Wolds, the anges of Ameian glabal hegemony ae ever perceived asa greater Tabi Man te dangers of topping the Inertial ‘order The Bush sarinstaten and Ss nae consehatve mavemont hae set cut on & maple ‘oures fo entire that ts eamot tke pas, n et by a graced aserton of mitry hegemony [nop he existent econome hegemeny. egretaly, under this administration we have retumed to massive deficit spending, and the lack of ‘stung SBC enforsement has further erode investor confidence, Indeed, the Mawed economic and i policies and of the Bush administration resuling in years of projected deficits may be exacerbating the ‘weakness of the dollar, if not outright hastening some countries to diversify thoi central bark reserve funds with cures as an altemative to the dollar. From a foreign policy perspective, dhe terminations of ‘numerous international treaties and disdain for international cooperation via the UN. and NATO have angered even our closest ales, In September 2002, Dx. Paul Isbell wrote an excellent analysis regarding the quiet “tectonic shifts ‘underway with eespoet dhe dollar and euro. In his essay he asked, "What can Europe do to consciously rrcpare the way for the day when this tectonic shift in monetary relations becomes undenishly ‘obvious? fs] Unfortunately, today we are witnessing this clash of US/EU financial interest in he form ‘ofthe upcoming Iraq war over Saddam's tc fo a “petrveuo.” Instead of lading & pre-emptive war in Tray, the US shouldbe pursuing a muiateral testy, perhaps mediated by the UN that establishes a dsl- currency standard for OPEC oil pricing. ‘Synopsis 1 would appear that any attompt by OPEC member states in the Middle East or Latin America 10 transition othe euro as ther oltransaetion curry standard shall he met with iter overt U.S, miliary sctlons of covert U.S. intelligence agency Interventions, Under the gulse of the perpetual ‘war on terry’ the Rush administtion is manipulating the American poople about the unspoken but very seal ‘macroeconomic reasons for this upcoming war with ag, This war in rag will not be based on any Uneat from Saclam's ol! WMD program, o from terrorism. This war will he over the global cureney oF oi. A ‘war intended to prevent ol rom being pried i euros Sally, the US. has become largely ignorant and complacent, Too many of ws are willing to be ruled by fee ad les, rather than by persuasion and truth Will we allow our goverament to inate dhe dangerous pre-empive doctrine’ by waging an unpopular wari lag, while we refuse to acknowledge that Saddam ses not pose an imminent threat to the United States? Funhermore, we soem unable to address the ‘seactural imbalances in our evonomy due to massive debt manipulation, unaffordable 2001 13 ets second loves of uade deficits, unsustainable credit expansion, cosporate accounting abuses, near 220 record personal nbledaess, and our elanes and over consumption of Mile Eastem Regardless of whatever Dr, lls finds or does not fad in rag regarding WMD, i appears that Preside [Bush is determined to pursue his pre-emptive’ imperialist war to secure a large portion ofthe earths remaining hydrocarbons, and ultimately use traq's underutilized oil to destroy the OPEC cartel, Will this gamble work? Tat remains to he seen, However, the history of warfave 1s replete with unintended jonsequenees, Its plausible thatthe aftermath of the aq war and a U.S. oecupaton of frag could increase AL-Queda spoasored terrorism against US. tawgts, of mow likely create guerilla warfare in a postwar Ir. Moreover, continued U.S. unilateralism could create economic retibuion trom the fnnerational commonity or OPEC. le: C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., Page 12 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. mhtmk: “The question we as Americans must ak ~ Ca the US military control by fore all o-producing nations ‘and dictate thelr ol export mansaction currency? In bee, the answer is no, Will we Forfeit any pretense of practicing fco-market capitalism while we enforce 8 miliary command economy for global oil transactions? Is it morally defensible to doploy our brave but naive young soldiers around the globe 10 enforce U.S, dollar hegemony for globl oil transactions via the barrels of their guns? Will we allow rsisist conquest of the Middle East to feed our excessive oil consumption, while ignoring the ‘duplicitous overtiowing of a democratically elected government in Lain Ameria? Is it acceptable for a US. President to teat military fore upon OPEC nation state(s) because of thee sovereign choice of currency neparding their oil exports? I concur with Dr. Peer Dale Scot's sentiments on this question opatuty docont Ametcans wil plolst te noton hat is appropiate w ran mses an bombs upon clans of aresher county, who have ha ee noting oo wth ts (nani iss ct Amade' n making “A mule! apposc to these cor problas ith ony way o proces. The US is ston enough 1 dominaie the word mitany. Econemealy t's in decine, loss and less competive, ard inersaengi m debt The Bosh people infnton appaars o be io ovetide seonome rales hy rary one, a8 bere were ro sk of eoonome renbullen. They shoul be mind of Bxisi’s human reves rom Suen 1956, 2 reat frced on by the Une States as a cneton for propping uote fating Bish pound (25), Lay, how can we effectively thwart dhe cheat of intemational AI Qaeda terroism if we alienate so ‘many of our European allies? ‘Paradoxically, this administrations awed economic policies and telligereat foreign policies may hasten the outcome they hope to prevent futher OPEC momentum towards the euro, Furthermore, asing US. nilitary andlor the thea of frees a rather unwiely Instrument for Geostacegy, and as seh Cis ‘o indefinitely thwart some OPEC members from acting oa thee “intemal discussions’ eganling 4 switch to cures. Informed U.S. pots realize this administration's failed economic policies in conjunction with thei miltant Imperialist overeach is proving net only detrimental to our intentional ‘ature, but aso threatens oar economy and civil ibe, Thus, remaining silent is aot only misguided, but fale patriotism, We must aot stand silent and watch our country continue these Impesallst poles, “The US must not become an isolated rogue’ superpower, relying on brute force, thereby motivating other ‘ations to abandon the dollar standard --and with the mere stoke ofa pen ~ slay our superpower status? “This need not be our fate. When will we demand that our government bepin the long and dificult journey towards energy conservation, development of renewable energy sources, and sustained balanced budgets to allow real deficit ction"? When wil we sepa the clearly unaffordable 2001 tax cuts to facltate a balanced fiscal budget, enforce comporate accounting laws, and substantially reinvest in our ‘manufacturing and export sectors to gradually but earnestly move our evonomy from a wade sevount efit postion hack int rade account steps positon? Indood, over the last two decades, the significant loss of US. manufacturing capability to forcign competition bas adversely affected our ability to maintain a sustainable evonomy. The "New Economy" raradigm ofthe 1990s has created a false “service sector sconomy’ that simply cannot sustain the US's ‘evoaomic and military power stays ia competitive globalized economy. Undoubtedly, we must make these and many more dificult structural changes to our economy if we ate to reste and maintain our fnterational "safe harbor” investment status, Furthermore, it would scem imperative that our government begins discussions withthe G7 nations 19 reform the global monctary system, We must adopt our economy to accommodate the inevitable ascendance of the euro a am altemative Intemational reserve curtency. I eoncat with those enlightened evoaamiss who recommend the US. begin the process of convening the aext “Bretton Woods Conference’ The US. govemment shoul! compromise and agree 40 the euro becoming the ne Intemational reserve curency. A. compromise on the edrofoil issbes via a mitral treaty with 3 tralvalphase-in of a duaLOPEC cureney trassetion standard seems inevitable. It would also seem prudent to Investigate a third “Asia bloc’ of the Yer/Yuan as reserve currency options to give balance 19 le: C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., Page 13 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. mhtmk: the global monetary system, ‘While these multilateral reforms may lower our exeessive il consumption, force the US government 12 engage in fiscally responsible policies, and reduce some of our global miliary presence, pethaps these ijustinents could also reduce some of the ankmosly towards U.S. foreign policies. Secondly, it hoped such reforms could improve the quality of our lives, and that of our children by motivating the US. 19 finaly become more energy efficient. Creating balanced domestic fiscal polices, ebuilding alliances with the E.U/word community and energy’ reform are inthe Iong-trm national security interests ofthe US. Global Peak oil is & challenge to humanity self, and will require an unprecedented amount of Jnterntional cooperation and coordination to overcome this history-making event. Furthermore, global rmonctary reform isnot only necesary, but could mitigale future armod or economic warfare over ol, ‘ultimately fostering a more stable, safer, and prosperous global economy in the 21st centr ‘Unfortunately, the proposed muller conference on monctary reform and energy reform is viewed as abhorrent to the eurent neoconservative movement, whic is premised upon the US as the "Pre-eminent slobal Empire (26 Even a cursory reading ofthe neoconservative agenda as outlined in the Project fora ‘New American Century (PNAC) policy document illustrates tei idealistic goa is US global dominance = ~ both militarily and economically. Indeed, the Bush administration's entrenched political ideology appears quite incompatible with multilateral economic reo. The neoconservatives seem 10 view ‘compromise as anithetical, UI We the People must demand a new adminstation, We need responsible leader who are willing to return to halanosd badgts, conservative Fiscal policies, and to oar ‘cations of engaging in multilateral frsign policies while seeking broad international cooperation. [Equally Important, we must bear la mind the wisdom of founding fathers like Thomas Jefferson who insisted that a fre pres evita. asi is often the only mechanisen to peotect democracy. The Amrcan people are not aware ofthe issues oulined in tis essay because che US mass media has been reduced 19 proximately six lige mia conglomerates that filer 90% ofthe information that flows within the US. Sadly, part of today’s dilemma ays not only within Congress but also a handful oF elt, imperais- ‘oriented media conglomerates that have failed in their Constiuional obligations to inform the People (Cetical information about the rag war was only available via the Ine, which should not be our oaly source of real, unfiltered news Finally, despite the media reporting otherwise, the current wave of ‘global anti-Americanism’ is noe ‘agains the American people or aginst American values ~ but against the hypocrisy of mlizaes American Inperialism. Vespectully submit the curent polices of the neoconsewvative movement as expressed ‘trough various PNAC documents their manipulation ofthe citizenry though fear, and the application of ‘unilateral U.S. military free is treasonous not only tothe American Public but incompaible tothe very fundamental principts that founded our nation has een sald thatthe vast majority of wars are fought over resources al economics, and even $0- called “religous wars” usually have economics or access to resources asa hidden meive, The lng wae Is ‘po diferent ffom other modem wars excep it appears to usher in oll currency’ as a new paradigm for ‘warfire, However, the world commnity may not tolerate an imperialist U.S, Hyper Power that ignores Inernaional Law while using military foree (o conquer sovereign nations. Indeed the fects suggest ditional oiFproducing nation states will eventually exerese their sovereign right by pricing thir oi exports in ewos instead of dolls | will iterate the fundamental issue facing our country ~ Car the US military and intelligence agencies ‘contro the governments in al if producing nasions ~~ as well as their oll export currencies? In bite, the answer is no. The question becomes how many countries will we allow our government to overtiow under the false priest of the newt “war on temor?" Adtionally, how much international "bowback" against the US and is citizens would such a Geostrategy create? Likewise, if President Bush pursves an ‘unprovoked and basically unilateral war against Iraq, the historians will not be kind 10 him or his tulministation, Their agenda is clear to the world community, but shen will US patios: become ‘eognizant of thelr modus operan le: C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., Page 14 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. mhtmk: “Wis the absolute right of he Sia fo supers fe formation of pube opin. “you tat a i bg enough and keep repeating Ht people wil eventually come to baw = “The le canbe maintained oy for such te asthe State can shield the people rm the pica ‘economic ander ria censoquences of te le. It tus becemes vial impart forthe Stat 10 tne al of te powers fo voprase sso, fo the trath i he moral enemy ofthe ie, an thus by ‘extension, hea the greats enemy ofthe State - Dr. Joseph Goss, Garman Minter of Propaganda, 1699-1945 see Background on Hydrocarbons and US Geostrategy ‘To understand US Goostatexy one needs to have a realistic appreciation of the importance of hydrocarbons the phenomenon refered Io as Peak Oil, and the importance of Taq’ oil eserves with ect to these sues I should note that two types of data exist regarding ol eserves, “polical data" ‘and “echnical dt." Politicians, the media, and economists use political dat, whereas governments, thir {otelligence agencies, and geologist use the much more accurate, and much more guarded, technical daa ‘One important ise wot understood by the general population Is the impending geological phenomenon ‘known as "Peak Oil” I is extremely unfortunate that our corporate-contolled media conglomerates do rot report on the significance of global Peak Oil, It wow soem the Earopsan community is openly ‘discussing this issue and trying to make preparations to reduce their overall energy consumption CConteal, the U.S. government is making prepatons for more ulate wats n-an effort wo conto the ‘odds’ hydrocarbons — and the ell curoney. [27] The Pentagon has contemplated a "S-yeat, 7-war plan.” [28] Regarding Peak Oi, Michael Ruppors controversial wobste offers several anicles: From the Wildemess. Although some of these articles are overwrought, dir analysis does illustrate how the expanding “war on ter’ follows wherever US. Geostategic concems are regarding hydrocarbons reserves or pipelines (West Africa, South Americ, et) “This crucial concept of Peak OO was fist illustrated i bell-shaped curves by U.S geophystcist M. King “Hubbor, who in 1956 corocly predict U.S. oil production would poak in 1971. Each oil ld in the ‘world follows @ more of less bellshapod curve, and the composite view of the work's thousands of oil fics is one gigantic. ragged edged looking bell-shaped curve, The best souree of data regarding global ‘ll production is form Petroconsulans Ine out of Zarich, They maintai the largest private databases of the 40,000 oil feds inthe worl, Tis rumoced tha the CTA is thei bigest elie, and that something in their 1995 report might have predicted global Peak Oil unless the Caspian Sea region comained an extensive amount of untapped oil. Unfortinately the reports by Petrovansutans Ine, cost approx $535,000, ae non-disclosure statements are required for thee rater exclusive clientele. Undoubtedly the ush/Cheney administration is aware of the isues surounding Peak Oil, Perhaps acknowledge of this ‘eso relate to hee plans to invade Ing, which predate Saddam's sich tothe ear by years ‘To date the two most authoritative books I have reviewed regarding technical oll production data and Peak Oil are the following: The Party's Over: Oil, War and the Fate of Industral Societies (2003) by [Richard Hoinborg [20], and Hubber’s Peal: The Impeding World Oil Shortage (2001) by Kensoth Deffeyes[20- Highly respected geologist Coin Campbells also researched this isue extensively [3 Using Hubbert's methodology to measure global oil production, contemporary geologists have forecast ‘hat global Peak Oi will ogcur around 2010. Though veteran geologists such as Kenneth Defeyes have ‘now concluded that Peak Oi wil most ikely occur between 2004 and 2008, The following illustrates his “Monn epnon thal he peak in work il produeson may even eccur before 2004, What happens Iam wrong? would be deigted tobe proved wrong. ul mean tat we have af actional ‘years to rede aureonsumpton ct cude ol. However, wou ike alt ef unexpectedly good news, le: C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., Page 15 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. mhtmk: ‘to posgona the peak io 2010. 321 ‘The following information will Wiefly dacuss U.S. Goostategic isues regarding Ins oil eserves ‘Other than the core driver of the dollar versus euro cumeney dhe the other issue related 10 the ‘upcoming war with Trag appears related wo some disappolatag geological findings regarding the Caspian Sea region. Since the mid-to-late 1990s the Caspian Sea repion of Central Asia was thought t0 hold approximately 200 billion bares of untapped oll (ihe later would be comparable to Savi Arabia's reserve hase." fa] Based on an early feasibility study by Enron, the easiest and cheapest way’ 10 being this oll wo market would be a pipeline from Kazakhstan, tough Afghanistan to the Pakistan border at late 1990s not only was the Enron Corporation relying oa cheap liquefied natural gs from © Caspian Sea region fr thei ower plan in In, but also large energy’ companies sich as Unocal anc Haliburton “canes tink fa time when we have had a regon emerge as suey to became as stately sigitcan asthe Caspian” ~ Fema’ CEO af Helou, Dek Cheney 1258 In foc, these Caspian region oil reserves were a central component of Vice President Cheney's energy plan released in May 2001. According o his report the U.S. wil import 9% oft by 2020, and thos tapping into the reserves inthe Caspian Sea region was Wiewed as 2 U.S srategie goal that would help ‘meet our growing energy demand, and also reduce our dependence on oil from the Mile Eas. (3 Is for similar reasons that I belive Tony Blair endorsed the Ina war, The UK. has no ol eserves other than the North Sea. Unfortunately the Noth Sea ol lds belonging to the U.K. reached peak production the year 2000 | susp the destne inthe North Sea ouput from 2001 to present dais quite disconcerting to the British ‘government, as its much move rapid than one would expest. Like the U.S the U.K. will soon import the ‘majority of is ol, perhaps Blaie agreed to the invasion given that Batish Potcleum (BP) has been the ‘only non-US oil company that has received oil exploration right in the post Saddam Ira Of course the U.K. has mot yet ascended tothe euro, Because global el production seems to have leveled off in 2000, [Richard Heiberg recently suggested tha we might have reached "Peak OM Plateau,” (25) The following grap lusts global Peak Od Regia Ot & Natura Gas Lieut "2009 are Cave Seeari on0 1040 1950 60 1970 1920 1990 2000 2010 2020 2020 2040 2090 ‘Once Peak Oil is reached, the supply of ollenergy will hegin an ireverible decline, along with 2 comesponding fveversiblelncrease in price despite growing demand from Industrialized snd developing rations. Despite vatious claims by environmental groups theve is simply no realy avaiable substitu for oil regarding transportation, nor do the allemtves praluce the powsr output of oil, Eventually substitutes for oil may become available, but only iF we begin international cooperation on a le: C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., Page 16 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G... ‘unprovednted sale, and avoid “global oi warfare" Although the rors from Vice President Cheney's spring 2001 energy meetings are sil sere, there is ‘one individual who was present during some of those meetings and Is willing to publicly discuss Peak (1, Me, Matthew Simmots, who was a key advisor tothe Bush Adminstation, and participated on Vice ‘President Cheney's 2001 Enoepy Task Force. Mr. Simmons is an investment hankor in Texas, and CEO of Simmons and Co, International, handling an investment portolio of $56 billion. In May 2003 Mr. ‘Simmons stated the Following at conference forthe Assocation of the Study of Peak Oil & Gas (ASPO) {in Pans, rane “think basal that now, hat aking of wil never be accu presced unt ater te fact Bit {he event wil cc, and my analysis leaning me more bythe moni, the wory tat peak hand; not years away. I itn out tm wong, Ben fm wong. UU Tm gh, Me unfresoen consequences are devastating. Bul urfonunatay tha wild has no Pan 8 IThm Hight The lacs te {eo serous to gnov, Sad the pesenitopimetcebate started too at [a ‘Regarding US Geostategy in Afghanistan, acording 1 the French book, The Forbidden Drath, [7] the ‘Bush administration ignored the ULN. sanctions that had been imposed upon the Tali and ener iat ‘negotiations withthe sopporely “rogue regime’ from February 2, 200 to August 6, 2001, Aecoring 12 this book, the Talan were apparenly noc very cooperative based on the statements of Pakistan's former ambassadog, Mr, Naik He repos thatthe U.S. thwatened a ‘miliary option in te summer of 2001 ifthe “Taliban did wot acquiesce to our demands, Fortutous foe Cheney's energy plan Bin Laden delivered tos SITLL. The pre-positioned U.S. military, along with dhe CIA providing cash to the Norhem Alliance Tears led the invasion of Afghanistan and the Taliban were routed, The pro-western Karzai governmet ‘was ushered in, The pipeline project was now hack on tack in early 2002, wel, sort of After three exploratory wells were built and analyzed, i¢ was reported thatthe Caspian region holds only approximately 10 t0 20 billion bastls of oi although it does have alot of natural gs)" [38] The il is also of poor quality, with high slfur content. Subsequently, several major companies have now doppet their plans forthe pipsine citing the massive projet was no longer profitable. Unfortunately, this rece realization about the Caspian Sea region has serous implications forthe U.S. India, Chia, Ast and Europe, asthe amount of available hydrocarbons for industlalized and developing nations has been ecreased downward by 20%. (Remaining plobal estimates reduced from 1. wilion barrels to appeox. 10 «ilion) [29] 20), “The following graph i sates Global Peak Ol, sometimes refered to asthe "Big Rollover: World liquids production: ultimate 2000 Gb conventional + 750 Gb non-conventional [Frmen| PARAS 8 ess onnual production Gb/a 15 7 | oes 5 = 192s 1950 1975 2000 2025 2050 2075 2100 2125 year le:C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono... Page 17 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G.,,. Page 18 of 42 1s widely report as facta that Ira has 1198 of the world's total il reserves (112 bili barrels) However, no geological surveys have been conducted in Ira since the 1970s, The Russans, French, al Chinese were eager to lease Hays unexploved Fields, which may contain up to 200 billion basels 3. In January 2002 Presidont Bush asked General Tommy Franks to construct an invasion plan for Tag. Under the threat of "mushroom clouds." our prime nemesis, Bin Laden, was skillfully replaced by the OSP into ‘ur new public enemy #1, Saddam Hussein, For those who would like to review how depleting hydrocarbon reserves could adversely erode our civil betes and democratic proeesses, tind U.S, Special Forces officer Stan GofT offers a sobering analysis i his essay: "The liste War and ls Roots". [Us] Likewise, for those who wish o review some of the unspeakable evidence surunding the September 1th wagedy, Gore Vidal's controversial book, Dreaming War offers a thorough inteetion.f2] Finally, The War on Freedom: How and Why America ‘was Autacked, September 11, 2001 by British politcal sclelst Nafeez Mosule, Ames! methodically resents disconcerting questions shout the 9/11 tragedy and ULS, geoststegy regaring Afghanistan, (3) References 1. Rangwaa, Glen, ‘Gms and evaluations ois proscribed weapons February 25,2008, 2 FAIR Fainess & Accs, ‘Mada Advsou: Sia Winess On Yay Sald Weapons Weve Destioved, Febuary 27,2005 (Otic UNSCOMIAEA. Docume: See also Bary, John, “Exclusive: Tha Detacio’s Secreta Newewaek Meh 3, 2002 3. London, Holt Kingstng, “ile Eas Toublo tho House of Saud” The Juslen Report, Jenasy 13, 200 4 Recknagel, Cares, "az Baghias Moves ia Eur” Rado Free Eup, November, 2000, {5 tam, Fata “lag nas handsome pot by dung daa fr aut." The Observer, February 16,2008, 6. “Economics Die an Eo OF Pin, Poles Aso Key," hanEypert, August 22, 2002 7. “Fore Fund Sting o Euro" an Financial News, At 28, 2002 (© Guiman, Poy @ Bary, ohn, “Beyond Baghdad: Expanding Tage Lo: Washgtonloks af ovesutng the Iamic ana ab wo Newsweek, August 1, 2002 9. Coste, Tom, “Japan's Esonomy at Ask of Collapss," MSNBC News, Decombr 1, 2002 10. Gluck, Carine, "Noth Korea embraces he eur," BBC Nows, December 1, 2002 Tha Pew Research Centar For The People & The Press, December &, 2002 12 “Fue contest extends gbal nutes,” eurparnershp com, tanuaty 7,202 12. Gamma, John, US Doar Losing Ite Poson Aa Asia's Resenie Cunenc,* dy 17, 2002 14. “Canada sols occ keeps sit ito euro reserves,” Forbes, January 6, 2003 15. Honderson, Hazel, “Beyond Bush's Unineaism: Another B:Folar Work or A New Era of Win? 16. Birms, Lany & Volbrdng, Aloe, “US. she Primary Lasrin Faled Veozuelen Coun,” Newsday, Apri 21 18. Spo, Dav, The Htien Hand of American Hegemony: Petal Feeycing and ntti! Makes, {ome Uriveriy Press (1800) mhtmnlsfilevC:Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono...._ 1/9/2011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. RP RP RER 4s & Us, Henry ©K, “US dol hegemony ns gto go Ala Times, Ap, 2002 Tha Choi of Cunncy fr the Denaminsion of te OF Bil” Sposeh gen by Javad Varian, Head of ‘OPEC Potroloum Markst Anais Oop, on The Iismatenal Rol othe Eu (rved by the Spanish inisto ot Economie Nas dit Spas Preideney ole EU), Ape 4, 2002, vedo, Span ‘Wala, Edward, “LS. Shes Pan for Postini Auto” Washington Post, Mate 15,2008 Dreyfus, Robert, “The Thity Year ih Mather Jones Magazine, March Api 2003, ayer, XA, ag sd Ot Paltanting Decomber 19,2002 tebe, Paul, “Te Sina Gscpoitie ot ie Euro” ea instal Cano, September 23,2002 ‘Scot r. Peter Date, “Bush Dsep Reason’ forthe War on Fan: Ol, Petodolas, andthe OPEC Euro ‘Question, February 15,2008; jet to a New Ameican Contuty (PNAC); See Rabuldog Aman’ Delenses Staley, Forces and Fecources Fara New Cantus, September 2000 “US plan foc action agin an comple," Stney Morning Horak May 30, 2008 Clark, Wesley, Waging Modem Wa fag,Teronsm. and te American Emp, Pubs Aas (2008) Heiberg, Richard, The Pais Owe: Ol, War andthe Fat of Instat Sites, New Society Pbtshors (2009) Dettayes, Kenneth , Hunde Peak The Inpénlng Mord Ot Shortage, eacton Universty Pres (2001) ‘Campa, Colin, Founder, Te Assocation othe Study of Peak OL Gas (SPO) Dretyes, Puboerts Peak pc See sample hele: Plaifer, Dale Alen, “ich Ado about Nothing ~~ Whither tha Caspian Fchos? Over the Last 24 Moaths oped For Caspian OF Bonanza Has Vanished With Each New Well Died - Goda Impleatons Are Frightening, Fon The Wigoress, Dezenber 5, 2002, National Energy Poly: Renot ofthe Nstonal Eneigy Pokey Developmen Group, whiehouse gow, May Hoinborg, Retard, “Ine Potoloun Paton, Muse Letter No. #135, May 2008, 1 7 From The lceress, Mathew Simmons Tanscie, June 12, 2008 isan Charles xissard & Guaume Dasque, The Forbcien Tash: US-Taiban Secret OF Diplomacy, ‘Sal Arata an the Faled Sear fob Laden Nation Books (2002) (9 Metin Pastas Sc Tete sums, DH een 282 Fuppert, Mlenas, “The Unseen Cont ~ War Plans, Backroom Deals, Leverage and Stiategy ~ Secuting ‘hats Let ofthe Planets Ol ane Has Aways Been the Bator Line” Fram The Wigerness, Octobe 16 2002 upper, Michel, FTW inteview: “Col Camebel on Ci Peraps the Wort’ Foremost Experon Oi and tha OF Business Cons fre Ever More Appaent Realty ef the Past-2-11 Word” From The Wgemaes, ‘Oztber 23,2002 aut James A, ‘uaa Ihe Suge 11” Gobet Potcy Forum, December 2002 and ts Roots” From The Wikdemese, gut 27, 2002 ‘Vol, Gore, Dreaming War: Blood fr Ot & the Cheney Bush Junta, Nation Books, 2002 He eseay, “Tne mhtmlsfile:/(C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., Page 19 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. mhtmk: [Enemies fat printed inthe UK Observer, October 27, 2002 4. ames. Nate, The Yaron Freedom: How and Why America was Atcked. September 1, 2001, Tee of the Publis (2002) ‘Addendum: Notable International Monetary Movements {ate Jaruary 208) After completing this essay in mid-January 2003, 1 hogan to rea about some intresting intemational rmonstary developments and the related opinions of analysts. These resent developments waraint fnclusion as an adendum. The following two aries relate to the rapid devaluation of the dla ae January relative tothe euro, This oscumed in the week immediately preseding President Bush’ State of the Unioa address. oth ofthese articles suggost hat Russia ~ a tational holder of dollar we inking “political overtones’ to their exchanges of dollars for euros. The following anicle may ines om his present unisterl position on a, “he dala romsined on the pes on Thursday, buted by some hevish remsks rom the US _acminisraton about he sandof wth fag, twas alo stung by a ported signal om Fusia’s ental tank that he appeal of dolar denominated assets waring, “Oleg Vu frst dopty chan a the Russian cata bank, said the Bank plans oc the share ‘TUS aolars nts orig exchange reserves aed ineaue tha sare o ater carercies, “Some analysis quasened whether thre may be palial overtones io Vyu's mars, that coud be rales tothe wienng rit btwn he US and some ore poten alles about how to parsincs lragto comply with UN weapons inspectors requirements. “Atnough Russi own foreign exchange reserves aa faly smal by comparison wt the works biggest conv banks, tne auison i, Wt other Sel barks Tofow sna what does Mis do Te the ‘ity ol the US to nance te uront account dec? said Mae Chanda, che cmency stateget That dee fs cura around 8% ot gross domeste proc! and proving fa be an increasingly heavy mistone around the doi neck though global curency exchanges are notoriously volatile, i is intoresting 10 note the following day (Gapuary 25h) some analysts reiterated tht these monetary movereals may be eelated not only to the csurret geo-political tensions, but may also indicate political motivations. Is ths pechaps a warning shot ‘over the bow’ forthe Bush administration reganling thet postion en a? These moaetary movements by various cental hunks Mlustate wouble forthe doll “Alot sutton, ne dollars suppose sow and asia dole Is lokng 0 sow, 0 fatal. “i fact the 9peed of te dolar side, agarnst the exo n paul, has Taken even the most seasoned analyte by surpras: a Dow Janes Newavis foreign exchange suvey ttn days 990 Showed the major cueney tang banks otecasting tha cute lining lo $1.05 by Be mide of February and nt coming near $0: endo te yoo “instead, th eur has lap to highs of around 610880 on Fay and has aay gine 4% on ‘he data is yea, lav slags mcteaingy stant to update tet erect. The Sue ‘rae Keeps reaching test owyear highs, aed the dor cn the fopes aga ering and a Post, ofthe kay val “Pemaps a mere important barometer of broader conience in U.S. market isthe Treasurys make. ‘yin the dolar ang, 991 spkng an socks under pressure, Treasurys conn to rtan te safe haven appeal “But mere ae warning signals et, 10, tat are elnnng to get more atenton. This Week, the Fusian central bak ait waa lowering the US. set pation ft foreign exchange veservea in ‘ber words song Treasurys ~callg the dolar alow ylang curency le: C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., Page 20 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. “Analysts belive som ofthe lige Asian cata banks that between them hol the for's share of ‘he works doer rearves~ ae al considering reign er Treasury hadnge. A US warn rag could ther accelerate thal ena “indeed, some polical analysts botove tat U.S. policy ever lag may ateady be having a dest impact on rang of US. asses, paricuasy wih uch othe fest ofthe Wot So cpposed 0 Wat ts hard for me to bone thatthe fw of capital cannot help but be afete by How the US. is pected alound the woe said Laty Geenterg, on tration economist at led Thanborg & 60. in Westpo, conn. *Teaay It you have te US. sting (nag) spsinst word opinion, thre could bean even taser pulback out of colr-donomnnated assets” cult doseph Quirian, global ecenemict wit Johns Hops Universi, n Wastinglon. How we go fo wa nueress tho faa of dace of he dolar he sai" 5] “The day after the above article, the UK Obscrver’s Will Hulton wrote a force article against Bush's ‘unilaterism, This adele forher emphasizes the unfortunate esonomic imbalances of the U.S. economy. ‘nd suggests dhe potential geo-political fallout ofa uilaterist war or an unstable aftermath in Iraq could create a significant divestiture of dolar denominated assets. ~The US's economic peaiton is ff to vba Io al Io go war woul easton mats ‘support mat could underpin Mt economicaly as well 88 apiomatealy and macy. The mut Interalsm Bush sce s, tut anaconomie neces, “On latest estmats, ts net altos fo the rest he work! are more than 2.7 tll, nea 90 per ‘can of GDP, a sea of indeblednetsatcociang with Baskl-case economia Lan Aree, “is industrial base s so unvompettie tha I onsstenty imports more tan exports; ts camer accotnt dete he gap belvonn al ks curont foreign earnings and lregn speedy. Nam a Stureing 5 pat con 2 GDP, conthuing @ hot that has lated tor mare than 25 years and which is ‘the cause o ll hat foreign dec, As & natonal commun, has vital ceased fo save x0 that ‘goverment ae indivi ake Ino on cto “To tance the cument-aecount tic, a rellecton a he lok of saving the US rates on osigers spying wie freg ceney leant earn se “aut treignes got windy abou the prospect fr sha and prope pices and stopped buying, oF bogan © wiieraw some of te tions they have invested in the US economy, thon he dollar woud ‘colapse.Aeedy, has falon pear 10 per cen agaist the exo over tha last six weaks, Bu thet ‘oul just be the beginning, Economists a the Federal Rasave have estimated tha tre dolr needs {orallby 20 pe conto bing be ow of impo ad expt io balance, bin todey asats Sue al doesnt nappen grasa. Ragpens prepay “i Amonca and Bian spur a second UN Resale ar go war wh the atv apposton of key members of he Secury Counc ike France and Russi, be sie the ow cf cola in the US wl Slow coum camatealy. and ba sire there wl ba a stampa of oredgner yng fo sl. Saree on ‘ill Svoot that Bush Is so ands to pep up ate sil massneyy overvalued. Agamst the bickgund, tere could be & devastating seo, wit a he depressing kneckon consequences for Dmercan censure conisenes ana busines rwostment “ana the mashes wore signaling lst week Was tha 9 suit wit Be Bounds of passty ‘hat was worh tkrg recautenay aco, hence ho seling. te War was over new weeks, ‘he sks would be contsnable, and tere wl be sore shares well wor buying at todas pices But iho war was pnged ore subsequent peace unsabe, en tho pressure on the doar ana Wall ‘Steet cou become very sever Indee, revorcing the depressive inluences onan economy where ‘he uncerjing imbalances are 50 exvaccinay “The US approach has been unistralist here as evoryher ese: dees what thes ast kes, a poley that now swing t Is. Eush needs bady to change couse, when Tony Bi shoud be tiging on him. The UN process needs to be respscid and reinforced, not leas Yo reassure the mates, an eter systems of eeorome governance need to be put in place. The US's miltary ‘apacty may alow uniatrasn its et economic under, mo are scorn, oes nt” 8) mhtmnlsfilevC:Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono...._ 1/9/2011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. mhtmk: “These icles indicate that many cena banks ae reducing their reliance on dlrs, and quite possibly sending a message about their opposition wo the U.S’ position on Iq, Me Hutton is core ou cure evoaomle stactue simply cannot afford a significant divestre of foreign investments, nor can the Jndcbted US consumer and coeporste sactors ahsosb such disruptions. Although these curency ‘movements a typically described as purely economically derived decisions, it would be naive w sugy that geopolitics and global tensions have not played a role in the broad movement away from the dollar "The world has no interest in challenging the US malta, but given our det eves, we have become quite vulnerable fom an economic perspective. . Hence, ifs advisable for President Bush to pursue an agressive, unilateral application of US, military force without broad U.N international supper. European Commentary on the Essay’ ‘The Real Reasons for the Upcoming War With Iraq’ “To finish, in January 2003, Me. Coflin Nunan reviewed a draft of my essay on an Intemet forum. He subsossently publised an exceptional summary on an Irish website (hpsiwwr. festa. or) Hopetell ‘our efforts wil facilitate public awareness, nd stmilte @ more honest debate onthe Ira isstes, Below ate excert from his informatie article “OM, Curene, and the Wat on Ig, “One of ho stated economic objectives, an porhap the primary object, when sting up the euro ‘was 1 tm no a reserve curtency to challenge te dala so Mat Europe oo cou gt someting Ioeroshing. “This homever woul! bea dsaser forthe US. Not ony woul! ey tose ge pat of tel ana subsiay of eectvaly fee goeds and serves, but eau sutchingt eur reares om dalar reserves would tring down the vale of tho US cureney. imports woud sta fo cos Amereans aot mow ard as increasing nurbers of Nese hedng dolars began to pend than tbe US weud have to Sta paying ts debs by Supping n ods are services to frsign counties, hus reccing Asoiean ling standard. As counties a businesses converted th dal ase inl euro assets, he US Property en stock markt bubbles woud wttout dou, burt, The Federal Reserva would na longer be able fo pint more money to reale the bubble, a5 tis curently openly censidenng dang, because, wiout los f eager frigners prepared to mep them up, a sereus inflation woud rest ‘neh un, wou make fregners even more ehrsan fo hak te US curenoy an ts heighten ects, “Tare is tough one major obstacle to is appening FO is not just by far the most import ‘commodity taded nematenaly, ts tho llsbiood of al medorn ndusiaksod economies. You dont have of, you have to by tnd you want o buy of onthe intentional mares, you usual have {o have dlrs, Unk recon all OPEC counries agreed to sa io for dolars ony Se long a= ‘Ws femaned the cae, bw euro was ual to Became maj resave csteny: eres at at ‘6fpomt in stocking eos i every ime you need Io buy of yu fave To change ther into dls. “Tn arangemont also maant tha! th US efecvely par contoled th entie werd oi mat: You ‘could only by of you had dota, an only oe county had he night pn oars = te US. “ton th oer hard OPEC were 6 deco to accep euros ony for iso assuring for moment ‘wor alowed to make ths decison), then American scoremic dominanes would be over. Not ony ‘would Europe nol toad as many dors anymore, bl Japan whi imps aver 8% of 8S oF om the Mle East would thre # wise to convert a lage porn f ts dolar asses to auto asses (Japan iste maj subsizarof he US bocause i olds 20 many lat ivesnets). The US onthe eet hand, beng the works aigost of mpertr would have, © ren a rade surplus o aqure exes. The ‘conversion rom rade doit to vadesuplus would have tobe acrieved at atime when propery ‘and sock mare pices ware colapsing are domes supp of land ges were contacting. ‘woukd be very pant conversion. “Te purely economic arguments for OPEC convert 10 the eu, at bas for # whe, soem vary stiong. The Euo-zone doos nol run a huge ade detroit heel lndabted to tho est the ‘wold ke the US and inert losin the Euo-zone ae leo sitar higher, The Ero zope Mas 2 Tagar share of wo! ace than the US ans the Middle East's ain Yang pate. Rnd nay ‘everthing yeu can buy fr dollars you can alo buy fr oures ~ spar of cours, Homo “Ao ss bad news for he US econary and te dor. The fas fox Washington wi be that not le: C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., Page 22 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. mhtmk: ‘onl wlth furs price of int be ght, but he uroncy might rt b ght sith. Which parhaps habs explain why the US is neal uting tes Sacond mar oot dominating word ala: rary tre" 7) Saving the American Experiment (March 10, 2003), ‘Considering the coe economle challenges that our nation faces, and the deplorable ll curency war that I fear we are about to witness in Ira, this author advocates thatthe global monctary system he reformed ithowt delay. This would inclide the dollar and cura designated. as equal dnterational reserve curries, and placed within an exchange band along with a dual-OPEC ofl nsiction cureney standard, Addldonaly, the GT natons should aso explore a tin! reserve curreney opton regarding a yewyuan bloe for Asi. Such veforms may lower our ability to fun musive def ‘iVenergy. and project a global miliary force, but they could improve the quality of our ives and that of ‘ur children by reducing animosity towards the U.S. and force our government to purse more iseally responsible polices, {Given that 98% ofthe work's transportation sytem is dependent on depleting hydrocarbons, the urgeney in which we must pursue new and altemative methods of energy production cannot be overstated. Indeed, it is plausible tha if the US goverment effectively advocates energy reform regarding our own consumption fevels, we as a ation could simuancously pursue the crocal patriotic goal of enhancing the securlty of our nation by hecoming one of the worlds leaders in developing and implementing ltemative energy sources, This s the missed opportunity thi real US leadership could have provided in the aftermath of U11. We could have received an inspiring call duty, challenging our nation to “po 19 the moon” by the end of this decade regarding energy policy, bu instead the message was: “Unite. Go shopping. sd don't he afraid vo My.” Failing rally the citizen For truly pattie purposes to strengthen ‘ur ation was perhaps one ofthe greatest mised opportunities since the end ofthe Cold War ‘We nocd areal National Energy Policy Instead ofan “endless war on erorism." Faday’s “blowback” bs parly duo to our ongoing support of coerupt Middle East rogimes/dctatoships. 8) Creating a more ‘uilble global monstary system while maintaining a strong transatlantic relationship with Europe is in the long-erm national security interest of the U.S. Hopefully monetary andl energy reform could mitigate ature armed or evoaomic warfare over oll thus uhimately fostering a mow stable, safer, and prosperoes 2st century ‘Tragically, President Bush's administration does not appest willing to initiate the arduows stuctrat ‘changes that our economy’ must undertake IF we ate to adapt and aeeommodate the eu asthe second ‘World reserve curency, Futhermoe, this administration has not communicated tothe People the urge ‘eed for energy reform. Instead, they intend to enforce global dollar monopoly for ol transactions via the application of superior U.S. military force. My’ essay was written out of patriotic duty in an effort iusrate dat such a mitary-cenrie geostratepy for Empire has produced intetationa isolation of the US. and may ultimately zesult ia our economic fall, I firmly believe our mation wll be beter pepared to meet this docade'schallnges i the citizenry is cognizant of why the worldview is coalescing aginst the U.S, shy obr nation is attemping by fore 4 secure Tras ol, reer its ol earency back 10 the Solar, and install @ permanent US military presence inthe Persian Gulf region. We must not allow the snilitant imperialism of this adminiseation co bring down the Amerian Experiment ‘lak grap ma a nn id ne rein nt Sephora my oe tea mem acne epi ome oo References: Addendum Section le: C:\Revisited - The Real Reasons for the Upcoming War in Iraq A Macroecono., Page 23 of 42 y9n011Revisited - The Real Reasons for the Upcoming War in Iraq: A Macroeconomic and G. mhtmk: “44. Associted Press, US Della on Shaky Ground” January 2, 2008 45. McCarthy, Graime “Dola’s Dscine Staring To Ascseraie, Rating. News Dow Jones Newsie, sanuary 26,2003 +46. Huon, Wi, wn hush is sunk without ane” The Observer, January 26,2009, 47 inan, Coin, “Ol, Cuaney, andthe Ws on ns" Fassia. January 2009 (PDE) 448, Johnson, Chae, Blowback: The Gost ard Consequences of American Emp, Ow Becks (2015) Post-War Commentary (January 1, 2004) “susson has rot doisloped any seniicantcapabity with respect to weapons cf mess dosbucton Tioteunade tprjetcancentena power aganst" nage” Pol Fane eNO Coin Powell on February 24,2001 “Dur coneavatin aint at aq ade hos, slob of Eewsgn 100 and S00 fn of Gover of agent woud enate Sasa Husean fo cause mae easustos soes more an 100 Saar mis etry. an area nay ve bes he sizeof anata Goin Pow atthe UN on February 5, 2008 “Simply states, ter sno dou that Saddam Hussain now has weapons of mass destucton, my “Bes Chaney on August 2, 2002 “retigace leaves no dou that ag conus to possess and canoe hal weapons " ps ‘George W tush March 18,2003, “ie ae asted to accept Saddam decided Io Gestoy Hose weapons | say thal such a cian Is pale asi." “Tony Bia on March 16,2008, “ity ofcourse te peor dort wart wat. Thats understond. Fut air al tse leaders the