This author is expounding the theory, popular among economic historians, that all wars have their roots in economic reasons. Additionally, his postulates about empires taxing (demanding tribute) other nations seem to match known historical precedents.
Unfortunately, his arguments about America demanding “tribute” in the stealthy form of insisting that the rest of the world use US currency as a de facto international medium of exchange is more than a bit of a stretch. Even if this author’s theories were true about the US’s “stealthy world taxation,” there are problems with attempting to tie a global economic theory to a single commodity such as oil and to what currency in which it is traded.
Furthermore, as one poster has already pointed out on this thread, oil is not the only component of America’s economy. This simple fact casts a lot of doubt the author’s total “gloom and doom” scenario and his postulated dependence solely on oil.
No doubt that oil is probably the single largest influence on the world’s (especially Europe’s) economy. However, a large problem hidden in the author’s argument is an unstated premise that all of the oil producing countries (except Saudi Arabia) see a problem with trading in US dollars. Another, important, unstated premise in the author’s argument is that the US’s own oil reserves would not be tapped when the price (in whatever currency increases). Additionally, he ignores the contributions of Britain’s North Sea oil contributions as well as Venezuela’s input to the world market.
Yet, another, huge problem with the author’s conclusions is that one of Europe’s major trading partners (arguably the largest) is the US. In fact, the volume of trade between the US and Europe dwarfs the volume between Europe and Iran or any other single oil producing nation. Consequently, as the saying goes, “if the US sneezes (economically) then Europe gets a cold.”
Therefore, it logical to conclude that it is not in Europe’s long term interests to assist oil producing nations in precipitating a US economic collapse, or even, a major depression. This axiom is true regardless of what Iran or any cabal of oil producers may desire in terms of economic (or other) damage to the US.
The net result of the author’s failure to consider all of the economic factors in his argument is that his entire argument is weakened to the point of unbelievability. Therefore, the thoughtful reader is left with the impression that the author’s input is more of screed than a serious economic analysis.
What do you make of this?
TEHRAN, Iran Jan 20, 2006 — A defiant Iran announced Friday it has begun pulling its foreign currency accounts out of European banks to protect its assets from possible U.N. sanctions over its nuclear program.
As analysts estimated the amount of those funds at up to $50 billion, Iran also called for a reduction in OPEC oil production raising the possibility that the country would use oil in its standoff with the West. Iran pumps about 4 million barrels of oil a day, making it the second largest producer in OPEC after Saudi Arabia.
Underlining his challenging stance, Iran's hard-line president, Mahmoud Ahmadinejad, held a meeting in Damascus, Syria, on Friday with leaders from the Palestinian militant groups Hamas and Islamic Jihad.
The two governments expressed support for Iran's right to the peaceful exploitation of nuclear power and criticized what they called the "selective and double-standard policy practiced by some international powers in this regard." The remark was a reference to U.S. and European opposition to Iran's enrichment of uranium, a process that can produce material for atomic bombs.
The meeting came a day after an Islamic Jihad suicide bomber blew himself up in a Tel Aviv restaurant, wounding 20 people. Israel accused Iran and Syria of being behind the attack, a charge both countries denied.
The currency withdrawal signaled that Iran was willing to weather U.N. punishment rather than abandon its nuclear ambitions, which the United States and some in Europe say are to develop atomic weapons. Tehran insists its program is for peaceful purposes only.
Friday's move also deprives Europe of an important lever to influence Iran and could weaken its resolve to push Iran to give up key parts of its nuclear program, analysts said.
Crude oil prices rose above $67 Friday amid concern over the Iranian nuclear dispute, unrest in Nigeria and al-Qaida's threat of terrorist attacks in the United States.
Analysts fear that oil prices could surge much higher even beyond $100 a barrel if the U.N. Security Council imposes trade sanctions on Iran over its nuclear activities.