Saturday, March 10, 2007

Iranian Oil Bourse

Earlier in this blog, we have looked at the interests of the Israel lobby in the current standoff between Iran and the US . However, the Israel's wish for military campaign against Iran is not new. Whereas Ahmadinejad's blundering comments have provided the crisis-making ink for the Zionist propaganda leaflets, it is not the security of the Jewish state, nor the Zionist regime that motivates America. We should not forget the Petro-Dolldar Warfare!

I am of firm conviction that Israel's existence in the Middle East is owed to the "empires" design for a trigger to ignite crisis where a crisis is needed to mask out the colonial and military presence of the empire: "We are here to protect Jews!" ...Yah right!

Americans have been threatening to not tolerate Iran's stubborn refusal to halt its legal and peaceful pursuit of nuclear energy technology , aimed at addressing energy and fuel problem for the growing economy and the growing population of Iran, who is well aware of the oil reserves running out. However, the most defying gesture of Iranians in warding off America's influence has been the Iranian Oil Bourse.

As Krassimir Petrov wrote last year in the Energy Bulletin
The Iranian government has finally developed the ultimate “nuclear” weapon that can swiftly destroy the financial system underpinning the American Empire. That weapon is the Iranian Oil Bourse slated to open in March 2006.


So how is the Iranian Oil Bourse a danger to the American economy?

Iranian Oil Bourse is based on a euro-oil-trading mechanism. Therefore, it will allow anyone willing either to buy or to sell oil for Euro to transact on the exchange, thus circumventing the U.S. dollar altogether.

I have summarized Petrove's comprehensive description:

A nation-state taxes its own citizens, while an empire taxes other nation-states. The imperial ability to tax has always rested on a better and stronger economy, and as a consequence, a better and stronger military. Historically, imperial taxation has always been direct: the subject state handed over the economic goods directly to the empire. However, for the first time in history, in the 20th century, America began to tax the world indirectly, through inflation:

It distributed the U.S. Dollar, to other nations in exchange for goods with the intended consequence of inflating and devaluing those dollars and paying back later each dollar with less economic goods—the difference capturing the U.S. imperial tax.

A time line of this process provides an interesting perspective:

  • Early 20th century: The U.S. dollar was tied to gold, so that the value of the dollar neither increased, nor decreased, but remained the same amount of gold.
  • 1932: The great depression of 1929 led Roosevelt to decouple the dollar from gold. Because, up to that point, although US was a great economic power, but it was not an empire. The fixed value of dollar tied to gold did not allow for ripping empire worthy benefit from exchange with other economies.
  • 1945 : The Bretton Wood system is established. Although the U.S. dollar was not coupled to gold, but it was made convertible to gold only to foreign governments; thus established the dollar as the reserve currency of the world. This was made possible because of the WWII! [the US had supplied its allies with provisions, received gold as payment, thus accumulated significant portion of the world’s gold. Thus the rest of the world didn't have a choice but to use US$ as reserve]
  • 1960’s : the dollar supply was relentlessly increased to finance Vietnam and Johnson’s Great Society. Most of those dollars were handed over to foreigners in exchange for economic goods, without the prospect of buying them back at the same value. (thustaxablity from inflation.)
  • 1970-1971 : foreigners demanded payment for their dollars in gold, The U.S. Government defaulted on its payment on August 15, 1971. The denial to pay back in gold was an act of bankruptcy by the U.S. Government but the U.S. also declared itself an Empire. (we saw a recent example of this in defiance of the UN and attack on Iraq!)
  • 1972-73 : an iron-clad arrangement with Saudi Arabia to support the power of the House of Saud in exchange for accepting only U.S. dollars for its oil. The rest of OPEC was to follow suit. Because the world had to buy oil from the Arab oil countries, it had to hold dollars as payment for oil, thus abandoning demand for gold-payment.
  • 2000 : Saddam Hussein demanded Euro in exchange for oil. The danger to the dollar was clear and present, and a punitive action was in order: the Shock and Awe operation.
  • 2005 : Iran initiates the Iranian Oil Bourse to be opened in March 2006.
  • 2006 : US Federal Reserve stops to publis information about the M3 money supplies, that represent US dollar's strengt. Ron Paul the republican representative from Texas protests .

What are the implications of the Iranian Oil Bourse for America?

It will bring the American hegemony to an end. And in fact, the Iranian shiite hegemony that they claim they are fighting, is precisely the Iranian-initiated anti-dollar hegemony that will be embraced by most of the world, to date kept hostage to America's inflated dollar!
  1. The Europeans will no longer have to buy and hold dollars in order to secure their payment for oil. The adoption of the euro for oil transactions will provide the European currency with a reserve status that will benefit the European at the expense of the Americans.
  2. The Chinese and the Japanese will be especially eager to adopt the new exchange, because it will allow them to drastically lower their enormous dollar reserves and diversify with Euros, thus protecting themselves against the depreciation of the dollar.
  3. The Russians have inherent economic and nationalist interest in adopting the Euro – the bulk of their trade is with European countries, with oil-exporting countries, with China, and with Japan. The Russians seemingly detest holding depreciating dollars and prefer to replace them with gold. Russians have also revived their nationalism, and embracing the Euro will serve as revenge.
  4. The Arab oil-exporting countries will eagerly adopt the Euro as a means of diversifying against rising mountains of depreciating dollars. The regional anti-American anti-israeli sentiments add to the incentive of distancing themselves from America.
  5. The British will find themselves squeezed: They have a strategic partnership with the U.S. but they also have their natural pull from Europe. Furthermore, the two leading oil exchanges are the New York’s NYMEX and the London’s International Petroleum Exchange (IPE), even though both of them are effectively owned by the Americans. Thus, it seems more likely that the British will go down with the sinking ship, unless they pull the plug on the London IPE interests and their century-old partner.

Also see Rudo de Juijter's analyses in Dollar Contributions, Wars and Collapse and How can the Dollar Collapse in Iran? He provides figures and numbers for a more quantitative understanding of the situation.

This again, confirms my opinion that the Zionist lobby is not the cause of the American hostility towards Iran, it is just (as it has been over the past century) the agent in the service of the empire! This is what I call systematic anti-semetism!

I like to thank Dave on Fire for reminding me of this much forgotten discourse! It is frustrating at times, how intelligent bloggers like Fanonite are so focused on Zionism that they miss the bigger picture!

31 comments:

MarcLord said...

When asked what the people should do about their Roman occupiers, Jesus asked someone to pass him a coin. He said, "Whose image is on this coin?," and they said, "Why of course, it is that of Caesar." Whereupon Christ tossed the coin back and said, "You should give unto Caesar that which is Caesar's."

So it is with the Almighty Dollar.

N. said...

Great to see you MarcLord. And what a suitable quote.

betmo said...

whew!! lot's of info- i did not know this side of the coin. i do know that all we ever hear here in the states is- buy, buy, buy! to keep the economy afloat. i can't say as i am surprised- the whole government process here has moved towards dictatorship- and now i know why.

N. said...

Hi Betmo, welcome to my blog.

Yes, consumerism is what is chaining us, and is wrecking our planet. We need to push the brake on our desires, if we are to rid ourselves of the BushCo

N. said...

Bet, I thing your post so well fits this one. It's always good to know how empires recruit fighting bodies.

nunya said...

Is that a reference to the fall of the Roman Empire? If it is, there are plenty of people making that comparison, myself included.
I watched this movie this morning, and it outlines exactly how the American economy is imploding:
In Debt We Trust

Heck N, we don't need Iran to do us in financially, we can do that all by ourselves, with the help of the banking/credit card industry lobbyists.

I find it ironic that the British Empire dumped their hardened criminals in Austrailia and there seems to be a large number of alcoholic/abusive men there, and the British dumped their debtor prisons in the American colonies, and guess what? The US has a serious debt problem.

N. said...

No Nunya, my post was not refering to the similarities to the Roman Empire. That has been a much popular comparison for years, predating the neoconservative uprising!

And no, Iran is not pulling the financial plug on America, Iran is just cleverly taking advantage of America's decadance! With the Russian, Chinese and European empires watching droolingly!

N. said...

:) Nunya,

I like to blame this one on the British too, though :))

nunya said...

N, I wasn't blaming it on the British, I just think it's a bit ironic. I tend to believe that the American Empire picked up steam when the British Empire waned after WWII. They don't make those comparisons in American History classes, nor do they let American students (or taxpayers) learn about all the nasty things that the CIA does all over the world. I didn't know about Mossadegh until 4 years ago and that happened before I was born. I guess everyone has their spies, though. Did you catch this article?

Mossad implicated in missing defector mystery
By Tim Butcher in Jerusalem
Last Updated: 1:43am GMT 09/03/2007
I don't know if you know that my favorite author is Chalmers Johnson, author of "Blowback", "The Sorrows of Empire" and "Nemesis." The trilogy is part of the American Empire project

I have signed copies of his books. I consider them prized possesions.

Amre El-Abyad said...

well, you have a great blog. you writings are charged with passion and rebelion .. I also like the delicate layout of your blog

cheers
Amre

N. said...

Welcome to my blog Amre. and thank you for your kind words. See you around.

Monte said...

Hmm, now, this is fascinating! Thanks for the tips and links! Looking forward to taking some time and thinking through the implications of it.

HopeSpringsATurtle said...

After 9/11 word from chimpy on high, "Go shopping." The depth of corruption from petro-dollars makes me feel ill. I chip away at the information you provide Naj in small, digestible pieces. Thank you for the information and all your hard work.

Brother Tim said...

Excellent post, Naj. Well-researched and presented. I posted on this over a year ago when this all came out.

The Iranian Oil Bourse is a definite threat to the US economy. The US tried to hedge the situation by ceasing to publish the M-3 Reports by the Federal Reserve in March 2006.

The M-3 was used by the world's banking conglomerates to track the strength of the US dollar. Amongst other things, it included, Euro strength, Repurchase Agreements, and the amount of new currency printed and put into circulation.

It is the latter that has me concerned. With both China and Japan being heavily dependent on Iranian oil, and at the same time being the largest holders of US debt; if they decide to start cashing in their US dollar holdings, where will the money come from?

It will come in the form of printing more dollars. Without the M-3, there will be no way of tracking how much money is being put out by the Fed. This will eventually lead to a weakening of the dollar, if not a total collapse.

I am an American, through and through, and I love my country; but if the American people cannot, or will not, reverse the trends of this nefarious and criminal Administration running this country, then it is incumbent on the world community to straighten it out for us.

Fleming said...

Naj, I am impressed! This is an extremely informative post, very well presented, and most of what you've written is news to me. I want first to tell you how enlightening and helpful your post is, and then I'm going to study it carefully and probably "steal" a little from it in my own discussions. You and I tend to deal with the same kinds of issues and to share many of the same opinions, but your expertise about Iran is unique and helps make up for my ignorance. You do a wonderful job.

I'll be back to comment further.

Naj said...

hi dear Nunya, Monte, Hope, Tim, Fleming.

Thanks for the links Nunya and Tim.

Fleming, Hope, please take away as much as you like. I love building these knowledge networks; and I am certainly discovering the documented facts that are part of the undocumented daily Iranian narrative.

I was reading a book about the history of modernity in Iran. The book is in Persian, but it is by Abbas Milani, who is an American-Iranian scholar in California. He is drawing attention to the History of Iran over the past 1000 years; and is pointing out how everytime that Iran/Persians have tried to recover from the Arab invasion (Samanian, kharazmian, Safavids, for example) they have suffered a great setback by a foreign invasion.

And the motives for the attack have always been the same: Persian richness.

Frankly, I marvel that we have been able to rescue our language, traditions, ethics ... and I tend to give the credit to our collective political cynicism, and acute awareness of the world that unravels around us.

thepoetryman said...

LIKE SHEEP GOVERNED BY JACKALS


In the color of awakening our eyes glimpse frontward;
The still picture of life choosing our strange development.
Only as god-headed Anubis rises do we begin to sit up.
Does our blood not run with its unique being until shadow?
Our choices aren’t merely life, but its dancing nourishment
Of wish, yet we seem content in our slack jawed living,
Startled, like sheep governed by jackals.

Now is the occasion of our most hallowed sanctuary;
We are stirring the untamed humility of a new province
And we should, we must, see the angels motioning to us
From their silver-lined occurrence.
We’re tasting an account of empire that is infected
And has begun to sketch our days in thickened blood.
The hope of kindness is being spent in fees of silence,
Slain, like sheep governed by jackals.

War and theft are now boarders in our homes,
Sharing a bed and smacking their greedy lips at our table.
Accounts seem lost to these events in the steady drum,
The throb of liberty and speech blasted thickly in it.
Are we awake? Are we alive? Are we beckoning to it?
We see, we smell, we hear it, must we suffer it, too?
If we’re dead how might we then change course;
Voiceless, like sheep governed by jackals.

The jackal’s eerie howling and scavenging senses
Are most suitable for our dank and willful gloom,
Picking over the carcass of our living, dying and dead.
The leopard, hyena and eagle dare not answer
For they know they too have lost the spirit to fight.
Does our blood not run in our being until shadow?
Are our ideals dead? We’ve no more yearning than this?
You can rest assured that the jackal does.

bijan said...

Wow Naj! Great post! I need time to digest all of this. Thanks for now. (Barefot Laborer:I'm gonna have some cheese now and then rebalance my stock portfolio, but's all in Godless Dollar)

Naj said...

Yes Bijan I know. All of us North American dwellers are complicit in crimes as this repeating in front of our very eyes, every day!

Naj said...

THANK YOU POETRY MAN.

Speaking of Jackals ...

Yes, slaine, silences, comatose we are! I go to the mall to feel better now, feel depressed!!

Wolfie said...

Clever girl. I'm impressed.

Manas Shaikh said...

naj, what I don't like about iranian oil is that they import about 50% of consumption. why don't they invest more on refinement?

Brother Tim said...

Naj--
Thanks for the comment on my site. My M-3 report posting was on my last blog host and I foolishly didn't keep a hard copy. I am going through my metric tonne of paperwork to retrieve some of the info. This may be a timely thing, as your post shows, for doing another post on the subject.

Peace, Sister,
Bro Tim

Naj said...

wolfie, nice to see you here!

Manas: that's what I dislike about Iranian oil too. Guess "why" we don't have oil refinery: doesn't it give you a hint what they are doing to us now that we are trying to develop nuclear energy?

Tim, I look forward to your post.

The Fanonite said...

I like to thank Dave on Fire for reminding me of this much forgotten discourse! It is frustrating at times, how intelligent bloggers like Fanonite are so focused on Zionism that they miss the bigger picture!

They miss the bigger picture because the discourse is forgotten for a very good reason -- it is nonsense. It was discredited a year back, after being resurrected for the second time: first for Saddam, now for Iran. It was the usual attempt by the dogmatic "left" to erect a strawman which they could bash away at without having to pay a price. In doing so they overlooked the rather simple fact that they were inverting causation. Both Iraq and Iran considered switching the exchange standard AFTER being rebuffed by the empire and there are limits to how far Iran can go, because China's hundreds of billions of foreign exchange reserves happen to be in dollars.

This discussion is too vacuous for me to waste my time with, so i'll just leave you something to ponder on: Empire is not a naturally occuring phenomena -- it is structure, and it requires agency. The guardians of american empire -- especially its economic interests -- have been the likes of Baker, Brzezinski, Bush Sr. et al. American financial health is more important to them, than any one else in the establishment, and their services to the empire are not doubted by any. The reason they oppose war is precisely because they DON'T want these interests jeopardized. This fact has already been borned out in Iraq. Iran will be no exception.

The Baker-Hamilton report will give you far better insights into the thinking of the washington elite than the fantastic speculations of lefists.

Naj said...

Urm .. Thanks Fanonite for your unfriendly message!

I don't see how what I am saying is different from what you are suggesting? My reference to you was in reference to your critique of Chomskey's absence of Israel-bashing! And I am saying Israel is just one part of the problem; and the bigger one is the empire building.

And yes the China has lots of US dollars owed to it, which is preventing it from declaring America bankrupt outright!

Next time you want to spend your precious time to comment here, please don't behave Zionist-like and make clear "exactly" what argument you are opposing; and what alternative argument you are proposing.

I take you think the causation for the war on Iran or one on Iran is Israel?

If so, you may refer to earlier posts and see that that topic is covered ad nauseam! We live in a contingent, multi-causal world, don't you think so?

Wouldn't anti-zionism in this case be "your" straw man? That, you may bash to pieces, but the empire-makers will erect another one, in another form and shape, next time in the form of Ummahtism, maybe!!

Our grand children will testify to that!

Brother Tim said...

Fanonite, you say, "because China's hundreds of billions of foreign exchange reserves happen to be in dollars."

That is the danger to which I referred to, by the Fed ceasing to publish the M-3 Report. China is holding roughly 800 billion in US notes, Japan, slightly more. The combined total is approximately 1.7 trillion dollars.

In the event of a massive sell-off, America will not default or declare bankruptcy. They will print the money they need. It will temporarily be undetectable, as the M-3 Report contained currency printed and put in circulation, as well as Repurchase Agreements, among many more things.

The eventual outcome will be a weakening of the dollar. The real truth will come when the Iranian Oil Bourse starts up. Both China and Japan are hungry buyers of Iranian oil.

This is probably the main reason for Halliburton planning to move to Dubai. They'll be trading on a regional bourse; and it's possible Halliburton will be used as a government money-laundering operation.

Sophia said...

Naj,
I never never buy into the oil argument because there are less expansive means to control a country's oil resources than waging a war. The oil is a component but I think it is made to hide the wars that are being waged in the name of Israel in the region.

Naj said...

And "that"'s precisely where we differ.

I don't understand WHY would the wars be waged in te name of Israel; if Israel is not an "economically" profitable entity for the empire!

No one is making wars to make Israel the empire, right?

And no the war on Iran is not about conrolling its oil. Iran's economy, if unleashed will have the capacity to leave oil behind. And that is why I don;'t think the war on Iran is about Israel.

Naj said...

Sophia, to clarify:

The wars waged in teh name of Israel, are the wars FOR economy, not the war for the sake of the Jewish state!

David Mohammad Yaghoobi said...

Hey Naj, glad I found you. I've been following the Iranian Oil Bourse phenomena with much interest, always pleased for a recap.

Fancy trading links?

Btw, what's that Farsi/Persian icon about? Do they talk German or Deutche? I know I talk Farsi, but you are welcome to say it's Persian.

Keep up the good work. ddmmyyyy