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Iran's Oil Exchange Threatens the Greenback
by Mike Whitney
January 24, 2006
The Bush administration will never allow the Iranian government to open an oil exchange (bourse) that trades petroleum in euros. If that were to happen, hundreds of billions of dollars would come flooding back to the United States crushing the greenback and destroying the economy. This is why Bush and Co. is planning to lead the nation to war against Iran. It is straightforward defense of the current global system and the continuing dominance of the reserve currency, the dollar.

The claim that Iran is developing nuclear weapons is a mere pretext for war. The NIE (National Intelligence Estimate) predicts that Iran will not be able to produce nukes for perhaps a decade. So too, IAEA chief Mohammed ElBaradei has said repeatedly that his watchdog agency has found "no evidence" of a nuclear weapons program.

There are no nuclear weapons or nuclear weapons programs, but Iran's economic plans do pose an existential threat to America, and not one that can be simply brushed aside as the unavoidable workings of the free market.

America monopolizes the oil trade. Oil is denominated in dollars and sold on either the NYMEX or London's International Petroleum Exchange (IPE), both owned by Americans. This forces the central banks around the world to maintain huge stockpiles of dollars even though the greenback is currently underwritten by $8 trillion of debt and even though the Bush administration has said that it will perpetuate the deficit-producing tax cuts.

America's currency monopoly is the perfect pyramid scheme. As long as nations are forced to buy oil in dollars, the United States can continue its profligate spending with impunity. (The dollar now accounts for 68% of global currency reserves up from 51% just a decade ago) The only threat to this strategy is the prospect of competition from an independent oil exchange, forcing the faltering dollar to go nose-to-nose with a more stable (debt-free) currency such as the euro. That would compel central banks to diversify their holdings, sending billions of dollars back to America and ensuring a devastating cycle of hyperinflation.

The effort to keep information about Iran's oil exchange out of the headlines has been extremely successful. A simple Google search shows that NONE of the major newspapers or networks has referred to the upcoming bourse. The media's aversion to controversial stories which serve the public interest has been evident in many other cases, too, like the fraudulent 2004 presidential elections, the Downing Street Memo, and the flattening of Falluja. Rather than inform, the media serves as a bullhorn for government policy, manipulating public opinion by reiterating the specious demagoguery of the Bush administration. As a result, few people have any idea of the gravity of the present threat facing the American economy.

This is not a "liberal vs. conservative" issue. Those who've analyzed the problem draw the very same conclusions: if the Iran exchange flourishes the dollar will plummet and the American economy will shatter.

Here is what author Krassimir Petrov, Ph.D in economics, says in a recent article, "The Proposed Iranian Oil Bourse":
From a purely economic point of view, should the Iranian Oil Bourse gain momentum, it will be eagerly embraced by major economic powers and will precipitate the demise of the dollar. The collapsing dollar will dramatically accelerate U.S. inflation and will pressure upward U.S. long-term interest rates. At this point, the Fed will find itself between ... between deflation and hyperinflation-it will be forced fast either to take its "classical medicine" by deflating, whereby it 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, or alternatively, to take the Weimar way out by inflating, whereby it pegs the long-bond yield, raises the Helicopters and drowns the financial system in liquidity, bailing out numerous LTCMs and hyperinflating the economy.

No doubt, Commander-in-Chief Ben Bernanke, a renowned scholar of the Great Depression... , will choose inflation. ... The Maestro has taught him the panacea of every single financial problem-to inflate, come hell or high water. ... To avoid deflation, he will resort to the printing presses... and, if necessary, he will monetize everything in sight. His ultimate accomplishment will be the hyperinflationary destruction of the American currency ...

So, raise interest rates and bring on "total financial collapse" or take the "Weimar way out" and cause the "hyperinflationary destruction of the American economy."

These are not good choices, and yet, we're hearing the same pronouncements from right-wing analysts. Alan Peter's article, "Mullah's Threat not Sinking In", which appeared in FrontPage Magazine.com, offers these equally sobering thoughts about the dangers of an Iran oil-exchange:

A glut of dollar holdings by Central Banks and among Asian lenders, plus the current low interest rate offered to investor/lenders by the USA has been putting the dollar in jeopardy for some time... A twitching finger on currency's hair-trigger can shoot down the dollar without any purposeful ill intent. Most estimates place the likely drop to "floor levels" at a rapid 50% loss in value for a presently 40% overvalued Dollar.

The erosion of the greenback's value was predicted by former Fed chief Paul Volcker, who said that there is a "75% chance of a dollar crash in the next 5 years."

Such a crash would result in soaring interest rates, hyperinflation, skyrocketing energy costs, massive unemployment and, perhaps, depression. This is the troubling scenario if an Iran bourse gets established and knocks the dollar from its lofty perch. And this is what makes the prospect of war, even nuclear war, so very likely.

Peter's continues:

With economies so interdependent and interwoven, a global, not just American Depression would occur with a domino effect throwing the rest of world economies into poverty. Markets for acutely less expensive US exports would never materialize.

The result, some SME's estimate, might be as many as 200 million Americans out of work and starving on the streets with nobody and nothing able to rescue or aid them, contrary to the 1920/30 Great Depression through soup kitchens and charitable support efforts.

Liberal or conservative, the analysis is the same. If America does not address the catastrophic potential of the Iran bourse, Americans can expect to face dire circumstances.

Now we can understand why the corporate-friendly media has omitted any mention of new oil exchange in their coverage. This is one secret that the boardroom kingpins would rather keep to themselves. It's easier to convince the public of nuclear hobgoblins and Islamic fanatics than to justify fighting a war for the anemic greenback. Nevertheless, it is the dollar we are defending in Iraq and, presumably, in Iran as well in the very near future. (Saddam converted to the euro in 2000. The bombing began in 2001)

There are peaceful solutions to this dilemma, but not if the Bush administration insists on hiding behind the moronic deception of terrorism or imaginary nuclear weapons programs. Bush needs to come clean with the American people about the real nature of the global energy crisis and stop invoking Bin Laden and WMD to defend American aggression. We need a comprehensive energy strategy, (including government funding for conservation projects, alternative energy-sources, and the development of a new line of "American-made" hybrid vehicles) candid negotiations with Iran to regulate the amount of oil they will sell in euros per year (easing away from the dollar in an orderly way) and a collective "international" approach to energy consumption and distribution (under the auspices of the UN General Assembly)

Greater parity among currencies should be encouraged as a way of strengthening democracies and invigorating markets. It promises to breathe new life into free trade by allowing other political models to flourish without fear of being subsumed into the capitalist prototype. The current dominance of the greenback has created a global empire that is largely dependent on debt, torture, and war to maintain its supremacy.

Iran's oil bourse poses the greatest challenge yet to the dollar-monopoly and its proponents at the Federal Reserve. If the Bush administration goes ahead with a preemptive "nuclear" strike on alleged weapons sites, allies will be further alienated and others will be forced to respond. As Dr. Petrov says, "Major dollar-holding countries may decide to quietly retaliate by dumping their own mountains of dollars, thus preventing the U.S. from further financing its militant ambitions."

There is increasing likelihood that the foremost champions of the present system will be the very one's to bring about its downfall.

Mike Whitney
January 24, 2006

SEE ALSO: 27.Jan.2006 00:36

pdx indy

The Proposed Iranian Oil Bourse

The Oil Bourse: Iran's Really Big Weapon

Iran: U.S. GO or NO SHOW? 27.Jan.2006 03:15

g.d. dem

Mighty Mike presents one side of the Iran situation. That the US Dollar has been in trouble has been obvious to the professional money tenders - managers of various little pools within the great congomerate of global capital - for some time now. It is indeed a pyramid scheme and a collapse is overdue.

As Mighty Mike notes, there are many major as well as minor players who will be more than happy to climb on the Euro bandwagon and sell dollars short, once the snow ball starts rolling down the hill.

BushCo is solidly prepared for this development, just as they were prepared for the collapse of Enron -- having long before taken their winnings out, via the limited partnership mechanism, into untraceable off-shore accounts. As Mighty Mike says, "the foremost champions of the present system will be the very ones to bring about its downfall." I would say that those "champions" - assuming that means the neo-cons - have been effectively undermining the present system since Richard Nixon undermined the Bretton-Woods agreement.

For their part, the neo-cons have never believed in the dollar system - anymore than they believe in socialism - and that has given them enormous freedom and flexibility in riding it to its ultimate collapse. So, it's important to understand that BushCo has no fear of the downfall of the US Dollar and they are already well prepared to reap enormous profits from it.

What the entire US establishment - including notably the military-industrial complex - is afraid of is a stinging military defeat of the U.S. in the Persian Gulf - and radical destabilization of the U.S. as fall out from such a defeat. Mighty Mike is correct that the possibility of revolution finally coming to our neighborhood is really a part of the calculations being made in this Iran game.

Check out article and comment --



-- with comment ("Iran: U.S. GO or NO SHOW?") documenting quasi-official statements by U.S. military industrial complex and current non-leadership in the White House.

Here it is in a nutshell: The powers-that-be, including those that operate primarily in the U.S.A., can accept that Iran is to be the last straw that breaks the back of the overburdened camel of the global dollar system. They always knew that was coming some day, just as they knew (with insider info) that Enron would eventually collapse.

The powers-that-be, including those that operate primarily in the U.S.A., can also accept, if necessary, that Iran has nukes -- just as they accepted reality when the U.S.S.R., France, China, India and Pakistan (not to mention Israel) got nukes.

What the powers-that-be, including those that operate primarily in the U.S.A., cannot accept is shutting down of the Persian Gulf. Iran, very likely, has the capability to shut down the Gulf and throw the entire global economy into the mother of all tail spins. So the strategy breaks down to the old Mutually Assured Destruction script. That implies a waiting game.

If there were thirty years worth of oil anywhere outside the Persian Gulf . . . if the machinery of the fascist state were better established than it is . . . if the corporate globalized world system were more secure than it is . . . if the U.S. already had a draft in place . . . if the U.S. military were not exhausted . . . if there was no anti-war movement . . . if China wasn't already ruling the roost in Asia . . . if major players like Al Gore weren't talking about impeaching Bush . . . if only it was as easy to manipulate reality as it is to manipulate the perception of reality by the American people . . . if, if, if . . . if wishes were horses, beggars would fly!

MAYBE, there will be a nuke attack by the U.S. on Iran. Okay, that's true, as true as any 'maybe' can be.

But it's also true that such an attack presumes, according to Scott Ritter, that the U.S. Marines can seize and hold the Iranian side of the Straits of Hormuz. That's the same Marines that are tied down in the little old on-going mess in Iraq! It would be a major disaster to take the Straits of Hormuz if the revolving door effect would be for pro-Iranian forces to sweep the U.S. presence out of Iraq, which would then have to retreat into Kuwait, which likely could not hold! (So pro-Iranian Shiite forces would end up, eventually, with the OTHER side of the Straits!)

Maybe, maybe, maybe. Most notably, MAYBE Iran already has enough nukes to blow the lid off the Persian Gulf -- and then all bets have to be called off. Not even BushCo is prepared for that. (What? Someone would sell them nukes for mere $$$ billions in gold? What kind of ultimately cynical people would do a thing like that?)

It's conventional wisdom that it MAY be as long as ten years before Iran gets nukes. But it's also conventional wisdom that Iran already has a real air defense system, effective medium range missiles and all kinds of fire power on the Straits. And that's all just a lot of maybe's -- and don't forget the big maybe that Iran already has somehow managed to acquire a few nukes!

Saddam did all he could to make it look like the really had nukes. Iran is doing everything possible to make it look like they don't have them. Saddam was bluffing. Hmmmm . . .

So MAYBE Bush is ready to risk everything. But it could also be that the U.S will be a NO SHOW when it comes time to nuke Teheran.

Somebody must be bluffing. Somebody has to fold. Let's see, how many aces ARE there in this deck?

Check it out --




<Interview With Michel Chossudovsky>


And then again, why bother trying to read the leaves at the bottom of some multi-billionaires' tea cups? After all this is all about THEIR weird twisted reality. It's OUR reality that counts.

"Que sera sera. The future's not ours to see. What will be will be."

What ?? 27.Jan.2006 11:38


"Que sera sera. The future's not ours to see. What will be will be."

what f*cking passive words !!

you're full of stock options or what ?

hey dude ! It's YOUR country or THEIR country ?? It's YOUR army or it's THEIRS ?? huh ?

f*ck'em !

you have an independent media ? use it !
you have friends ? tell'em !
you have legs, hands, a throat ! use them !

you have a gun at home ? use it goddamn it !!!!

it's up to US to stop this f**king HOLOCAUST !!!

Hey John! 27.Jan.2006 12:18

g.d. dem

Thanks for calling me on that.

But actually what I meant was that our action needs to be local and anti-war regardless of the false picture given us by corporate media about Iran or anything else. So our action needs to be informed by OUR reality, not theirs.

My comments are just for the purpose of exploding the latest corporate media Bush-wah, but not intended to devalue anti-war efforts. As I noted, one of the big "if's" that global capital would like to wish away is the anti-war mmovement. THE ANTI-WAR MOVEMENT DOES MAKE A DIFFERENCE.

However, we shouldn't let ourselves be all wrapped up with the "great game" being played by opposing forces of global capital, which do include the Iranian petroleum bourse and the EU, as well as the U.S., Kuwait, Israel and Saudi Arabia. Bottom line, the anti-war movement can't determine whether BushCo goes ahead with the nuke attack on Iran. The anti-war movement can, however, make them aware of the stakes involved in such a desperate gamble -- meaning radical political instability of the U.S.A.!

Here's the conclusion to my comment at the <Iranian Security Dilemma> article: "We still are left with the same problems -- how to oppose the fascist tendency, how to oppose imperialism and global capital, how to stop the Iraq slaughter, how to survive, how to live free . . . ?"

How ? 27.Jan.2006 13:42


How to stop the Iraq slaughter ? BY FORCE !!!!! Do you see another solution ?

To stop the nuke attack,

let's take control of the PENTAGON BY FORCE.

Let's occupy it with a massive anti-war crowd from every state until a non agression act is signed.

The streets are useful, yes, if you want... but useless to be really effective. We see it everyday.
You tell it yourself : the mainstream media will manage to make it useless.

Let's change our strategy :

Let's not ASK for power anymore, let's TAKE it.

It's OUR country, OUR democracy, WE have to stop this holocaust.

F*ck the dollar, i'm already on slave-job. So what's the difference ?

We're talking about a NUCLEAR HOLOCAUST !

You want to be bombed by all nations in their quest for 'liberation' ?


The future is in our hands let's do this for humanity, and the future will reward us, the history is on OUR side.


So, before it's too late, let's organise,
The first step to stop this apocalypse is taking back the military control, OUR military force.

the pentagon under siege ? 27.Jan.2006 14:45


you're crazy. they will shoot us ! the fascists give commands, and they have to obey.
haven't you seen that with katrina ?

Much like Iraq, Iran's ethnic groups are being ignored 28.Jan.2006 17:15

socialists of iran

I'm afraid Iran as a country is in trouble.

to me, the biggest threat to iran's existence is the rising discontent among not only the youth, which make up 70% of the populous, but the numerous ethnic and religious minorities inside iran.

the main stream media portrays iran as a homogenous country with one race, the "persians". infact, iran may have as many as 15 distinct ethnic groups with populations ranging from a few thousand to the largest "minority" in iran the azeris with numbers as high as 30 million. today, the azeris are challenging the power of the persian elitists. for example, iran's supreme leader khamenei is of azeri origin. he's more like an uncle tom or collin powell or condi rice or alberto gonzalez.

i still cannot believe the western media is ignoring the above facts.

the kurds have been carrying out a militant resistance to tehran for 80 years.

the people who reside in oil rich areas are not persian speakers. in the south, it's mostly arabs of different origin. and around the caspian sea, it's Turkoman, Talish and Azeris.

if war is averted, i believe that the people of iran will errect a democratic/socialist republic much like turkey. after all the first democracy in the middle east happened in iran and it had a strong socialist twist before it was torn down by the US and the shah with the help of the Mullahs i might add.

an even older democracy was errected in azerbaijan in NW iran and the republic of azerbaiajan. After the end of World War One Turkey had to withdraw its troops from Baku. On November 17, British troops under the command of General Thompson entered Baku. On 26 December 1918 General Thomson bowed to the pressure and recognised the Democratic Republic of Azerbaijan. On 19 November 1918, the Government of Azerbaijan announced the creation of the Parliament as the National Congress of Azerbaijan was transformed into a parliament. The British troops left Baku in August 1919.

Shut up little soldier 29.Jan.2006 08:29


think ya so convincing ?

an ineresting article on the azeri question in Iran 29.Jan.2006 13:51


CULTURE January 29, 2006

Afshin Molavi: 4/15/03
A EurasiaNet Commentary

Iranian Azeris, who comprise at least one-quarter of Iran's population and possibly more, are attracting increased interest from US policy-makers, especially those who are interested in promoting "regime change" in Tehran. Some American analysts view Iranian Azeris as a potential source of instability for Tehran.

At present, there is little tangible evidence to support the notion that Iranian Azeris are prepared to confront the government in Tehran. Iranian Azeris are widely known to be well-integrated into Iranian society and the state. Nevertheless, a new book by Brenda Shaffer, Harvard University's Director of Caspian Studies, has reportedly captivated the attention of "regime change" advocates in Washington. In her book, "Borders and Brethren: Iran and the Challenge of Azerbaijani Identity," Shaffer challenges the widely held view in contemporary Iranian scholarship that a broad Iranian identity supersedes ethnic identities.

Shaffer describes a cultural reawakening among Iranian Azeris, calls Iran's national and ethnic-minority policy unjust and suggests that Iranian support for Armenia over the Nagorno-Karabakh dispute stems from a fear of the Republic of Azerbaijan becoming strong and, as she said in a recent London lecture, emerging as "a source of attraction to [Iran's] own Azerbaijanis."

Washington policy-makers have also expressed an interest in the views of Iranian Azeri cultural rights activist and political dissident Mahmudali Chehregani, a former Tabriz University Professor who was jailed briefly three years ago in Iran, and who currently resides in the United States.

On April 9, he told an audience of policy-makers, diplomats, journalists and students at the Johns Hopkins University Central Asia-Caucasus Institute that a strong sense of Azerbaijani nationalism is growing in Iran, predicting the possibility of Azeri-led unrest unless the demands of this "movement" were met. He predicted "radical changes" in Iran within three to five years, hinting that those changes could emanate from unrest among Iran's large Azeri population.

Chehregani also complained that Iran's central government bans the use of Azeri language in schools, changes Azeri geographical names, harasses and imprisons Azeri cultural activists and underreports the Azeri population, which he claims is 35 million (which would make it an ethnic majority).

The CIA World Factbook estimates Iranian Azeris as comprising nearly 16 million, or 24 percent of Iran's population. The United Nations human rights report on Iran notes that "there may be as many as 30 million" ethnic Azeris in Iran.

Chehregani backers in Turkey and in the Republic of Azerbaijan have hinted and said publicly that Iran's Azeri community should unite with Azerbaijan, a view with virtually no support among Iranian Azeris, most on-the-ground observers agree.

Chehregani publicly disassociated himself with the unification idea in his Central Asia-Caucasus Institute Speech, instead arguing for more cultural rights for Azeris, and a future Iranian government with "a federal structure resembling the United States, where Azeris can have their own flag and parliament."

Still, Iranian officials, as well as some in Iranian Azeri intellectual circles, have expressed alarm with Chehregani's alliances with pan-Turkic backers of secession and/or unification. His web site includes a flag with similarities to the Republic of Azerbaijan's flag. His frequent use of the term "South Azerbaijan" to denote Iranian Azeri territories implies unification and/or secession, and he heads a group known as the South Azerbaijan National Awakening Movement.

While Iranian Azeris may seek greater cultural rights, few Iranian Azeris display separatist tendencies, or go as far as Chehregani does in predicting ethnic-inspired unrest. Extensive reporting by this author in the three major Azerbaijani provinces of Iran, as well as among Iranian Azeris in Tehran, found that irredentist or unificationist sentiment was not widely held among Iranian Azeris. Few people framed their genuine political, social and economic frustration - feelings that are shared by the majority of Iranians - within an ethnic context.

According to Dr. Hassan Javadi - a Tabriz-born, Cambridge-educated scholar of Azerbaijani literature and professor of Persian, Azerbaijani and English literature at George Washington University - Iranian Azeris have more important matters on their mind than cultural rights. "Iran's Azeri community, like the rest of the country, is engaged in the movement for reform and democracy," Javadi told the Central Asia Caucasus Institute crowd, adding that separatist groups represent "fringe thinking." He also told EurasiaNet: "I get no sense that these cultural issues outweigh national ones, nor do I have any sense that there is widespread talk of secession."

Iranian Azeris - much like Persians, Kurds, Baluchis or any other ethnic group - have expressed frustration with the current political gridlock, the country's economic malaise and lack of political freedom. Indeed, Iranian Azeris have played a key role in Iranian nationalist freedom movements throughout the twentieth century. Today, the Azeri city of Tabriz is widely acknowledged as the host of the most active and progressive student democracy movement outside of Tehran, carrying on a long tradition of Tabriz-Tehran nationalist-democratic opposition dating back to Iran's 1905-11 Constitutional Revolution.

Still, Chehregani, Shaffer and others raise important questions when they talk about Azeri cultural rights. Other cultural minorities - Kurds, Baluchis, ethnic Arabs, Turkmens - have often complained about what they characterize as Iran's centralized "Persian chauvinism."

Many Kurdish Iranians, meanwhile, say that the Islamic Republic has continued "the Persian-centric policies" of Iran's Pahlavi kings, adding another layer of "Shi'a chauvinism" that distresses the Sunni-oriented Kurds. In October 2001, all six Kurdish members of Iran's Parliament resigned in protest at what they described in a letter to the interior minister as "denial of their legitimate rights" and the central government's failure to address the "political, economic and cultural rights that they have brought out."

Some experts contend the perception of Shi'a chauvinism is perhaps overblown, suggesting instead that the government tends to favor Tehran at the expense of the provinces. Still, there is no doubt that the central government's heavy hand on cultural issues has embittered many cultural rights activists. It is far less clear, however, whether this heavy hand might have implications for Iran's instability that outweigh the more pressing points of potential instability: joblessness, a stagnant economy, a nascent national democracy movement, an extremely young population eager for political and social change, and the external pressures of the US military on Iran's borders to the East and West.

The overwhelming majority of Iranian Azeris has displayed little interest in ethnic-inspired instability and virtually no interest in secession or unification with the Republic of Azerbaijan. Many view the Republic of Azerbaijan as economically stagnant and politically corrupt. As one Tabriz merchant joked: "We already virtually control Iran. Why would we want to become [Azerbaijani President Heidar] Aliyev's slave?"

Editor's Note: Afshin Molavi, a Washington-based journalist, is the author of Persian Pilgrimages: Journeys Across Iran. He was born in Tabriz, Iran and regularly reports on Iran for a variety of Western publications.

'external pressures' 29.Jan.2006 19:45


"external pressures of the US military on Iran's borders to the East and West."

kidding ?
talkin' about the 'terrorist attacks' in the south ? (containing 90% of iran's oil reserves)

let people of other countries decide what is good for them.
revolutions belong to people, not to stranger armies.

if a regime has to change, it's ours.

Are we serious here ? 29.Jan.2006 19:52

John the patriot

'islamafascists' ?