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Petro-Euro Vs Petro-Dollar?
The Voice ^ | May 2006, Issue 264 | steve masterson

Posted on 07/10/2008 2:41:33 AM PDT by Vanders9

Iran has really gone and done it now. No, they haven't sent their first nuclear sub in to the Persian Gulf . They are about to launch something much more deadly -- next week the Iran Bourse will open to trade oil, not n dollars but in Euros' This apparently insignificant event has consequences far greater for the US people, indeed all for us all, than is imaginable.

Currently almost all oil buying and selling is in US-dollars through exchanges in London and New York . It is not accidental they are both US-owned.

The Wall Street crash in 1929 sparked off global depression and World War II. During that war the US supplied provisions and munitions to all its allies, refusing currency and demanding gold payments in exchange.

By 1945, 80% of the world's gold was sitting in US vaults. The dollar became the one undisputed global reserve currency -- it was treated world-wide as `safer than gold'. The Bretton Woods agreement was established.

The US took full advantage over the next decades and printed dollars like there was no tomorrow. The US exported many mountains of dollars, paying for ever-increasing amounts of commodities, tax cuts for the rich, many wars abroad, mercenaries, spies and politicians the world over. You see, this did not affect inflation at home! The US got it all for free! Well, maybe for a forest or two.

Over subsequent decades the world's vaults bulged at the seams and more and more vaults were built, just for US dollars. Each year, the US spends many more dollars abroad that at home. Analysts pretty much agree that outside the US , of the savings, or reserves, of all other countries, in gold and all currencies -- that a massive 66% of this total wealth is in US dollars!

In 1971 several countries simultaneously tried to sell a small portion of their dollars to the US for gold. Krassimir Petrov, (Ph. D. in Economics at Ohio University ) recently wrote, 'The US Government defaulted on its payment on August 15, 1971 . While popular spin told the story of `severing the link between the dollar and gold', in reality the denial to pay back in gold was an act of bankruptcy by the US Government.' The 1945 Breton Woods agreement was unilaterally smashed.

The dollar and US economy were on a precipice resembling Germany in 1929. The US now had to find a way for the rest of the world to believe and have faith in the paper dollar. The solution was in oil, in the petrodollar. The US viciously bullied first Saudi Arabia and then OPEC to sell oil for dollars only -- it worked, the dollar was saved. Now countries had to keep dollars to buy much needed oil. And the US could buy oil all over the world, free of charge. What a Houdini for the US ! Oil replaced gold as the new foundation to stop the paper dollar sinking.

Since 1971, the US printed even more mountains of dollars to spend abroad. The trade deficit grew and grew. The US sucked-in much of the world's products for next to nothing. More vaults were built.

Expert, Cóilínn Nunan, wrote in 2003, 'The dollar is the de facto world reserve currency: the US currency accounts for approximately two thirds of all official exchange reserves. More than four-fifths of all foreign exchange transactions and half of all world exports are denominated in dollars. In addition, all IMF loans are denominated in dollars.' Dr Bulent Gukay of Keele University recently wrote, 'This system of the US dollar acting as global reserve currency in oil trade keeps the demand for the dollar `artificially' high. This enables the US to carry out printing dollars at the price of next to nothing to fund increased military spending and consumer spending on imports. There is no theoretical limit to the amount of dollars that can be printed. As long as the US has no serious challengers, and the other states have confidence in the US dollar, the system functions.'

Until recently, the US-dollar has been safe. However, since 1990 Western Europe has been busy growing, swallowing up central and Eastern Europe . French and German bosses were jealous of the US ability to buy goods and people the world over for nothing. They wanted a slice of the free cake too. Further, they now had the power and established the euro in late 1999 against massive US-inspired opposition across Europe , especially from Britain - paid for in dollars of course. But the euro succeeded.

Only months after the euro-launch, Saddam's Iraq announced it was switching from selling oil in dollars only, to euros only -- breaking the OPEC agreement.. Iran , Russia , Venezuela , Libya , all began talking openly of switching too -- were the floodgates about to be opened?

Then aero planes flew into the twin-towers in September 2001. Was this another Houdini chance to save the US (petro) dollar and the biggest financial/economic crash in history? War preparations began in the US But first war-fever had to be created -- and truth was the first casualty. Other oil producing countries watched-on. In 2000 Iraq began selling oil in euros. In 2002, Iraq changed all their petro-dollars in their vaults into euros. A few months later, the US began their invasion of Iraq .

The whole world was watching: very few aware that the US was engaging in the first oil currency, or petro-dollar war. After the invasion of Iraq in March 2003, remember, the US secured oil areas first. Their first sales in August were, of course, in dollars, again. The only government building in Baghdad not bombed was the Oil Ministry! It does not matter how many people are murdered -- for the US , the petro-dollar must be saved as the only way to buy and sell oil - otherwise the US economy will crash, and much more besides.

In early 2003, Hugo Chavez, President of Venezuela talked openly of selling half of its oil in euros (the other half is bought by the US ). On 12 April 2003, the US-supported business leaders and some generals in Venezuela kidnapped Chavez and attempted a coup. The masses rose against this and the Army followed suit. The coup failed. This was bad for the US .

In November 2000 the euro/dollar was at $0.82 dollars, its lowest ever, and still diving, but when Iraq started selling oil in euros, the euro dive was halted. In April 2002 senior OPEC reps talked about trading in euros and the euro shot up. In June 2003 the US occupiers of Iraq switched trading back to dollars and the euro fell against the dollar again. In August 2003 Iran starts to sell oil in euros to some European countries and the euro rises sharply. In the winter of 2003-4 Russian and OPEC politicians talked seriously of switching oil/gas sales to the euro and the euro rose. In February 2004 OPEC met and made no decision to turn to the euro -- and yes, the euro fell against the dollar. In June 2004 Iran announced it would build an oil bourse to rival London and New York , and again, the euro rose. The euro stands at $1.27 and has been climbing of late.

But matters this month became far, far worse for the US dollar. On 5th May Iran registered its own Oil Bourse, the IOB. Not only are they now selling oil in euros from abroad -- they have established an actual Oil Bourse, a global trading centre for all countries to buy and sell their oil!

In Chavez's recent visit to London ; he talked openly about supporting the Iranian Oil Bourse, and selling oil in euros. When asked in London about the new arms embargo imposed by the US against Venezuela , Chavez prophetically dismissed the US as 'a paper tiger'.

Currently, almost all the world's oil is sold on either the NYMEX, New York Mercantile Exchange, or the IPE, London's International Petroleum Exchange. Both are owned by US citizens and both sell and buy only in US dollars. The success of the Iran Oil Bourse makes sense to Europe , which buys 70% of Iran 's oil. It makes sense for Russia , which sells 66% of its oil to Europe . But worse for the US , China and India have already stated they are very interested in the new Iranian Oil Bourse.

If there is a tactical-nuclear strike on - deja-vu - `weapons of mass destruction' in Iran , who would bet against a certain Oil Exchange and more, being bombed too?

And worse for Bush. It makes sense for Europe , China , India and Japan-- as well as all the other countries mentioned above -- to buy and sell oil in Euro's. They will certainly have to stock-up on euros now, and they will sell dollars to do so. The euro is far more stable than the debt-ridden dollar. The IMF has recently highlighted US economic difficulties and the trade deficit strangling the US-- there is no way out.

The problem for so many countries now is how to get rid of their vaults full of dollars, before it crashes? And the US has bullied so many countries for so many decades around the world, that many will see a chance to kick the bully back. The US cannot accept even 5% of the world's dollars -- it would crash the US economy dragging much of the world with it, especially Britain .

To survive, as the Scottish Socialist Voice article stated, 'the US , needs to generate a trade surplus to get out of this one. Problem is it can't.' This is spot on. To do that they must force US workers into near slavery, to get paid less than Chinese or Indian workers. We all know that this will not happen.

What will happen in the US ? Chaos for sure. Maybe a workers revolution, but looking at the situation as it is now, it is more likely to be a re-run of Germany post-1929, and some form of extreme-right mass movement will emerge...

Does Europe and China/Asia have the economic independence and strength to stop the whole world's economies collapsing with the US ? Their vaults are full to the brim with dollars.

The US has to find a way to pay for its dollar-imperialist exploitation of the world since 1945.. Somehow, eventually, it has to account for every dollar in every vault in the world.

Bombing Iran could backfire tremendously. It would bring Iran openly into the war in Iraq , behind the Shiite majority. The US cannot cope even now with the much smaller Iraqi insurgency. Perhaps the US will feed into the Sunni v Shiite conflict and turn it into a wider Middle-East civil-war. However, this is so dangerous for global oil supplies. Further, they know that this would be temporary, as some country somewhere else, will establish a euro-oil-exchange, perhaps in Brussels .

There is one `solution' -- scrap the dollar and print a whole new currency for the US . This will destroy 66% of the rest of the world's savings/reserves in one swoop. Imagine the implications? Such are the desperate things now swimming around heads in the White House, Wall Street and Pentagon.

Another is to do as Germany did, just before invading Poland in 1938. The Nazis filmed a mock Polish Army attack on Germany , to win hearts and minds at home. But again, this is a finger in the dam. So, how is the US going to escape this time? The only global arena of total superiority left is military. Who knows what horrors lie ahead. A new world war is one tool by which the US could discipline its `allies' into keeping the dollar in their vaults.

The task of socialists today is to explain to as many as possible, especially our class, that the coming crisis belongs purely to capitalism and (dollar) imperialism. Not people of other cultures, not Islam, not the axis of evil or their so-called WMDs. Their system alone is to blame.

The new Iranian Oil Bourse, the IOB, is situated in a new building on the free-trade-zone island of Kish , in the Persian Gulf . It's computers and software are all set to go. The IOB was supposed to be up and running last March, but many pressures forced a postponement. Where the pressure came from is obvious. It was internationally registered on 5th May and supposed to open mid-May, but its opening was put off, some saying the oil-mafia was involved, along with much international pressure. ...........................

In 2007 Crude was trades around 60 usd. Everyone know dollar was getting weaker and weaker day by day. Than US with the help of their two NYMEX & IPE exchange started rising the price of crude by Future trading on crude( called speculation). Today crude is around 140 usd. It means whole world who were paying 60 usd, now paying 140 usd, means demand of dollar increase to 230% and dollar start again rising.

Even OPEC recently that in hike og crude, 60% contribution is due to speculation (Future market).

Moral of story is USA has & will go to destroy any nation to keep its monopoly of dollar in world.


TOPICS: Business/Economy; Military/Veterans
KEYWORDS: 911truthers; conspiracy; conspircy; dollar; energy; energyprices; iran; marxism; notthisfecesagain; oil; reservecurrency; tinfoil; trade; wot
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To: Vanders9

The full scope of my hatred for the Liechtensteiniacs would take too long.

But, since they are a country of 30,000 that prospers solely from hiding taxes of the rich of other countries (mostly Germany) essentially they are 30,000 criminals. Ok a few make hand-tools so they might be spared.

They are run by a monarch names “Prince von und zu Liechtenstein”. That is really is name. For that reason alone he should suffer a slow death. Perhaps it is hard to understand how ludicrous this name is without understanding German, but trust me.

So we have a tiny nation of 30,000 criminals run by a ludicrous and tyrannical monarch in the heart of Europe. What more reason do we need? If you need a final reason here it is - They have a Germanic name for their country BUT THEY SPEAK FRENCH!

Besides, the country is so small it would only take 2 bombs.


21 posted on 07/10/2008 11:48:58 PM PDT by Einigkeit_Recht_Freiheit (Bomb Liechtenstein!)
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OPEC Has Already Turned to the Euro
GoldMoney Alert
February 18, 2004
...The source for the euro exchange rate is the Federal Reserve, and I have calculated the euro's average exchange rate to the dollar for each year based on daily data.
US Imports of Crude oil
(1)
(2)
(3)
(4)
(5)
(6)
Year
Quantity (thousands of barrels)
Value (thousands of US dollars)
Unit price (US dollars)
Average daily US$ per € exchange rate
Unit price (euros)

2001

3,471,066
74,292,894
21.40
0.8952
23.91
2002
3,418,021
77,283,329
22.61
0.9454
23.92
2003
3,673,596
99,094,675
26.97
1.1321
23.82
We can see from column (4) in the above table that in 2001, each barrel of imported crude oil cost $21.40 on average for that year. But by 2003 the average price of a barrel of crude oil had risen 26.0% to $26.97 per barrel. However, the important point is shown in column (6). Note that the price of crude oil in terms of euros is essentially unchanged throughout this 3-year period.

As the dollar has fallen, the dollar price of crude oil has risen. But the euro price of crude oil remains essentially unchanged throughout this 3-year period. It does not seem logical that this result is pure coincidence. It is more likely the result of purposeful design, namely, that OPEC is mindful of the dollar's decline and increases the dollar price of its crude oil by an amount that offsets the loss in purchasing power OPEC's members would otherwise incur. In short, OPEC is protecting its purchasing power as the dollar declines.

22 posted on 07/11/2008 4:25:43 PM PDT by SunkenCiv (https://secure.freerepublic.com/donate/_________________________Profile updated Friday, May 30, 2008)
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To: Einigkeit_Recht_Freiheit

Those are all very valid reasons (especially the speaking french one) but there are plenty of other little nations around that make their living primarily by manipulating other nations citizens accounts, including for example, Gibraltar, Bermuda, the channel islands, Andorra, and even Monaco.

I think it is very unfair of you to single out only lichtenstein to be bombed. Try raising this issue over at DU - I feel sure they would insist, (in the interests of fairness and equality), that these other countries get bombed as well.


23 posted on 07/14/2008 4:39:57 AM PDT by Vanders9
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To: Vanders9

The US no longer responsibly manages its currency, and in fact is taking steps that will actively devalue it even further.

It takes an openly belligerent enemy to come out and say it, but the dollar is taking slow steps to the exit as a reserve currency, though the unwinding will take years if not decades.


24 posted on 07/14/2008 3:41:25 PM PDT by WoofDog123
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To: WoofDog123

Hmmm...but from what has been said it seems debateable as to whether this is a good thing or a bad thing, or at least there are advantages and disadvantages to it.


25 posted on 07/15/2008 12:23:21 AM PDT by Vanders9
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To: Vanders9; Einigkeit_Recht_Freiheit

World Currency, Gold, Oli, etc

The article does appear amateur and has conspiracy theories galore. But it makes an attempt, and succeeds, in bringing some serious issues to the fore.

Before dismissing the points in this article one should read history, especially the history of money going back to the Roman Republic. The key insights from history are:
- empires rise and fall based on the rise and fall of the value of their currency.
- The history of the invention of banking and the fractional reserve system by a Scotsman (John Law) at the French court in the early 1600s is especially fascinating and illustrates starkly the benefits of issuing paper currency and the dangers of abusing the trust of the public that paper money requires. The French Revolution is a direct consequence of the abuse of the public purse by the French kings of the time.
- the surest way to debilitate a nation is by the devaluation of its currency
- being a world currency bestows a huge value to the issuer in terms of ‘seignorage benefits’ - the benefits that accrue to the issuer of a currency. Refer to ‘Creating New Money’ published by the New Economics Foundation (London). This pamphlet deals primarily with the benefits of Seignorage reform for the UK economy, but is also applicable to the US$ as a world currency.

The key points of this article are consistent with historical parallels. If the Euro (or another $) were to become a dominant world currency it would pose the biggest long-term threat to the dominance and prosperity of the USA. What the US government is doing about it is open to speculation, this is where the article is weak.

Gold is still the only and best store of value known to man. Gold is neutral - no nation dominates on a Gold Standard. Oil could be considered a modern, temporary alternative. It is no co-incidence that the Swiss Franc is one of the strongest currencies in the world, as it has the highest gold backing for its currency. It is inevitable that the Swiss Franc will continue to strengthen against all paper-backed currencies (provided the Swiss maintain their fiscal prudence and independence). The author is right to describe the unilateral decision of the USA to tear up the Bretton-Woods agreement in 1971 as equivalent to dishonoring its debt, which was acquired from others in gold. The repercussions of this action and the subsequent debasement of the paper US$ will take decades, perhaps more than a century to unfold, but one can see the process progressing right now, in our lifetime.

Truly, there is no free lunch. We cannot spend more than we produce, which is what the US has been doing for the past many decades, at an accelerating rate! The day of reckoning will come when the debt will have to be paid - either in war, economic slavery or prolonged hardship.

Unfortunately, these points are rarely communicated to the masses. That is probably a contributing cause of the apathy among the general public on these matters.

Einigkeit_Recht_Freiheit - I liked your reasons for bombing Leichtenstein LOL !! But perhaps one might ask - the tax regime in the other countries might be so unfair and tyrannical that it drives its citizens to take their money to places like Leichtenstein.


26 posted on 07/17/2008 8:13:31 AM PDT by chanakya
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