SC40

http://www.cpa.org.au/garchve07/1314iran2.html

The proposed Iranian oil bourse will
accelerate the fall of the US Empire


.....................Iranian Oil Bourse

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 [proposed] Iranian Oil Bourse. (Note: it was to have been opened in March 2006 but has been delayed and is even now not open. Its opening would almost certainly result in immediate bombing and invasion by US and Israeli forces).

In economic terms an Iranian oil market would represent a much greater threat to the hegemony of the dollar than Saddam’s, because it would allow anyone willing either to buy or to sell oil for Euros, thus circumventing the US dollar altogether. It is likely that almost everyone would eagerly adopt this euro oil system.

The Europeans would not have to buy and hold dollars in order to secure their payments for oil, but would instead pay with their own currencies. The adoption of the euro for oil transactions will provide the European currency with a reserve status that will benefit the Europeans at the expense of the Americans.

The Chinese and the Japanese would 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.

The Russians have inherent economic interests 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. If embracing the Euro will stab the Americans, they will gladly do it and smugly watch the Americans bleed.

The Arab oil-exporting countries will eagerly adopt the Euro as a means of diversifying against rising mountains of depreciating dollars. Just like the Russians, their trade is mostly with European countries, and they will prefer the European currency both for its stability and for avoiding currency risk, not to mention their jihad against the Infidel Enemy.

Only the British will find themselves between a rock and a hard place. So far, they have had many reasons to stick with the winner. When they see their century-old US partner falling, will they firmly stand behind him or will they deliver the coup de grace? We should not forget that currently 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.

It seems more likely that the British will have to go down with the sinking ship, for otherwise they will be shooting themselves in the foot by hurting their own London IPE interests.

[For all these reasons] the Americans cannot allow an Iranian oil bourse to happen, and if necessary, will use a vast array of strategies to halt or hobble the operation.

Of course, a government coup is clearly the preferred strategy, for it will ensure that the exchange does not operate at all and does not threaten American interests. Feverish rhetoric about Iranians developing nuclear weapons undoubtedly serves to prepare this course of action. A nuclear strike is a terrible strategic choice [and] the Americans will likely use Israel to do their dirty nuclear job.

Unilateral Total War is obviously the worst strategic choice. The US military resources have been already depleted with two wars [and] the Americans would further alienate other powerful nations. Major dollar-holding countries may decide to quietly retaliate by dumping their own mountains of dollars, thus preventing the US from further financing its military ambitions.

From a purely economic point of view, should the Iranian Oil Bourse gain momentum, it would be eagerly embraced by major economic powers and will precipitate the demise of the dollar. The collapsing dollar will dramatically accelerate US inflation and will pressure upward US long-term interest rates. At this point, the Fed will find itself between deflation and hyperinflation. Deflation raises interest rates, thus inducing a major economic depression, a collapse in real estate, and an implosion in bond, stock, and derivative markets, with a total financial collapse.

Alternatively, it could take the course of inflation which would drown the financial system in liquidity. Sooner or later, the monetary system must swing one way or the other, forcing the Fed to make its choice. No doubt the chairman of the Fed Reserve Bank Ben Bernanke, who is a renowned scholar of the Great Depression, will choose inflation.

To avoid deflation, he will resort to the printing presses and monetise everything in sight. His ultimate accomplishment will be the hyperinflationary destruction of the American currency...........