Iranian elections looking hopeful. But is the Petrodollar Imperative still kicking?
If the early reports of the Iranian elections hold and are instituted, it seems they may exert a moderating influence on the Iranian government — and thus perhaps on the attack-dog elements in Tel Aviv and Washington.
However:
On Monday Iran stated its intention to convert their dollar assets to euros — and to start selling oil in euros instead of dollars.
Next day Tony Blair gives a hyperventilating & fire-breathing (must hurt) speech calling for a united global campaign against Iran. High vitriol. Seemingly from out of nowhere.
And, also Tuesday, the Pentagon announces its intent to frighten Iran by sending aircraft carrier groups to the Persian Gulf.
(Odd, in a way, in that the Navy is scared s–tless by missiles Iran possesses that were made in China to sink big ships. (Recall the shocking destruction of a Brit cruiser in the Falklands war by a French Exocet missile.) Aircraft carriers may be today where battleships were (in the US Navy mind) on December 6, 1941.)
However that may be, threats to sell oil outside the dollar, followed by threats of war, preceded the American attacks on Iraq in 1991 and 2003. Perhaps then the line in the sand is the universal petrodollar regime.
The once almighty dollar is down roughly a third against the euro since the latter was born, and the consensus among finance brains is that the slide will continue into the foreseeable future. Alan Greenspan, for one, surprised the world last week by saying just this, and that it made sense to him that fat holders of foreign exchange (e.g., Japan, China) would continue to diversify out of dollars.
Talk of the petrodollar scheme as irresistable casus belli is old hat among armchair stangeloves. The thesis: the Americans will do anything to protect the dollar from the collapse sure to ensue if people started buying oil in, say, yuan (the Chinese currency). Such people would no longer have to buy dollars to buy oil, and this huge steady drop in demand for dollars would cause them to crash against the major liquid currencies (euro, yen, swiss franc, pound sterling). Americans would experience Weimar-like hyperinflation and their fat-assed so-called lifestyle would go down the toilet.
But it may be that the world turns, and that the increasingly global ruling class is restructuring and relocating its business so radically that the benefits of a lower dollar are perhaps approaching break-even point with the costs. It may be that the owner-operators of the US are less worried about the dollar than the armchairists realize.
Nevertheless, it’s provocative and cause for pause to find the Pentagon rattling sabres and Mr Blair spitting foam for a global crusade the very day after the Iranian announcement. Perhaps, then, it remains indeed unwritten law: If the “wogs” try to sell oil outside the dollar, they get war.
If so, the revived Anglo-American martial passion will gel well with the fire-breathers in Tel Aviv. I read the Jerusalem Post every day. The Menance of Tehran seems to loom large there; the desire for war brazen. Perhaps, despite the encouraging election reports out of Tehran, the war of Iranian pacification first dreamt in public by Richard Perle in 1995 is back on the front burner. To protect the wheezing dollar. Perhaps we’ll know sooner than later.
