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The Proposed Iranian Oil Bourse
Financial Sense Online ^ | January 20, 2006 | Krassimir Petrov, Ph.D.

Posted on 01/20/2006 4:40:58 PM PST by hubbubhubbub

Abstract The American Empire depends on the U.S. dollar. The proposed Iranian Oil Bourse will accelerate the fall of the U.S. dollar and hence the fall of the American Empire.

I. Economics of Empires A nation-state taxes its own citizens, while an empire taxes other nation-states. The history of empires, from Greek and Roman, to Ottoman and British, teaches that the economic foundation of every single empire is the taxation of other nations or of their subjects. The imperial ability to tax has always rested on a better and stronger economy, and as a consequence, a better and stronger military that peacefully or militarily enforced the tax. One part of those taxes went to improve the living standards of the empire and the other part went to reinforce the military dominance necessary to enforce those taxes.

Historically, taxing the subject state has been in various forms, usually gold and silver, where those were considered money, but also slaves, soldiers, crops, cattle, or other agricultural and natural resources, whatever economic goods the empire demanded and the subject-state could deliver. Historically, the taxation has always been direct: the subject state handed over the money (gold/silver) or the economic goods directly to the empire.

For the first time in history, in the twentieth century, America was able to tax the world indirectly—not by enforcing the direct payment of taxes like all of its predecessor empires did, but by distributing its own currency, the U.S. Dollar, to other nations in exchange for goods with the intended consequence of devaluing over time those dollars and paying back later each dollar with less economic goods. The difference between the value of the dollar during the initial purchase and the devalued dollar during the repayment was the U.S. imperial tax. Here is how this happened.

Early in the 20th century, the U.S. economy began to dominate the world economy. At the time the U.S. dollar was tied to gold, so that the dollar neither increased, nor decreased its value, but was always convertible into the same amount of gold. The Great Depression with its the preceding inflation from 1921 to 1929 substantially increased the amount of paper money in circulation without the correspondent increase in gold. This rendered the effective backing of the U.S. dollar by gold impossible. As a consequence, President Franklin Delano Roosevelt decoupled the dollar from gold in 1932. Up to this point, the U.S. may have well dominated the world economy, but from an economic point of view, it was not technically an empire. The fixed value of the dollar for gold did not allow the Americans to extract economic benefits from other countries by supplying them with gold-backed dollars.

Economically, the American Empire was born with the establishment of the Bretton Woods system in 1945. The dollar was made only partially convertible to gold—convertibility to gold was available to foreign governments only, but not to private institutions. At this time the US dollar was established as the international reserve currency. This was possible, because during WWII, the United States had supplied its allies with food and military provisions, accepting gold as payment, thus accumulating significant portion of the world’s gold.

An economic Empire would not have been possible if the dollar remained fully backed by gold, i.e., if the dollar supply was kept limited and within the availability of gold, so as to exchange back dollars for gold at the pre-agreed exchange ratio. However, the dollar supply was actually increased far beyond its gold backing and handed over to foreigners in exchange for economic goods. There was no prospect of buying back those dollars at the same value—the amount of gold was not sufficient to redeem those dollars, while the quantity of dollars continually increased, so that those dollars constantly depreciated. The constant depreciation of the increasing dollar holdings of foreigners via persistent U.S. trade deficits was tantamount to a tax—an inflation tax.

When in 1971 foreigners demanded payment for their dollars in gold, The U.S. Government defaulted on its payments on August 15. The popular spin of this default was that “the link between the dollar and gold was severed”. The proper interpretation is that the U.S. Government went bankrupt, just like any commercial bank is declared bankrupt.

However, by doing so, the U.S. declared itself an Empire. It had extracted an enormous amount of economic goods from the rest of the world, with no intention or ability to return those goods. The world was effectively taxed and it could not do anything about it: it could not force the U.S. in bankruptcy proceedings and take possession of its gold and other assets for payment, nor could it take forcefully what it was owed by declaring war and winning it. Essentially, the U.S. imposed on the world an inflation tax and collected an imperial seigniorage!

From that point on, to sustain the American Empire and to continue to tax the rest of the world via inflation, the United States had to force the world to continue to accept ever depreciating dollars in exchange for economic goods and to have the world hold more and more of those dollars, while those dollars depreciated. It had to give the world an economic reason to hold dollars, and that reason was oil.

In 1971, as it became clear that the U.S. Government would not be able to buy back its dollars for gold, it prepared an alternative arrangement to hold the world hostage to its fiat dollar: during 1972-1973 it struck an iron-clad arrangement with Saudi Arabia—to support the rule of the House of Saud in exchange for accepting only dollars as a payment for Saudi oil. By imposing the dollar on the OPEC’s leader, the dollar was effectively imposed on all OPEC members. Because the world had to buy oil from the Arab oil countries, it had the reason to hold dollars as payment for oil. Because the world needed ever increasing quantities of oil at an ever increasing oil prices, the world’s demand for dollars could only increase. Even though dollars were no longer exchangeable for gold, they were now exchangeable for oil.

The economic essence of this arrangement was that the dollar was now backed by oil. As long as that was the case, the world had to accumulate increasing amounts of dollars, because those dollars were needed to buy oil. As long as the dollar was the only payment for oil, its dominance in the world was assured, and the American Empire could continue to tax the rest of the world. If, for any reason, the dollar lost its oil backing, the American Empire would cease to exist, because it would no longer be able to tax the world by making them accumulate ever more dollars. Thus, Imperial survival dictated that oil be sold only for dollars. It also implied that oil reserves were spread around various sovereign states that none was strong enough, economically or militarily, to demand payment for oil in something other than dollars. If someone demanded a different payment, he had to be convinced, either by political or by military means, to change his mind.

The man that actually did demand Euro for his oil was Saddam Hussein in late 2000. At first, his demand was met with ridicule, later with neglect, but as it became clearer that he meant his demand and even converted his $10 billion reserve fund at the U.N. into Euro, political pressure was exerted to change his mind. Other countries, like Iran, also wanted payment in other currencies, most notably Euro and Yen. The danger to the dollar was clear and present, so a punitive action was in order. Bush’s war in Iraq was not about existing weapons of mass destruction, about defending human rights, about spreading democracy, or even about seizing oil fields. It was about defending the dollar, ergo the American Empire; it was about setting an example that anyone who demanded payment in currencies other than U.S. Dollars would be likewise punished.

Many have criticized Bush for staging the war in Iraq in order to seize Iraqi oil fields. However, those critics can’t explain why Bush would need to seize those fields—he could simply print dollars for nothing and use them to get all the oil in the world that he needs. He must have had some other reason to invade Iraq.

History teaches that an empire goes to war for one of two reasons: (1) to defend itself or (2) benefit from war. Economically speaking, in order for an empire to initiate and conduct a war, its benefits must outweigh its military and social costs. Benefits from Iraqi oil fields are hardly worth the long-term, multi-year military cost. Bush went into Iraq to defend the American Empire. Indeed, this is the case: two months after the United States invaded Iraq, the Oil for Food Program was ended, the country’s accounts were switched back to dollars, and oil began to be sold once again only for U.S. dollars. No longer could the world buy oil from Iraq with Euro. Global dollar supremacy was once again restored. Bush descended from a fighter jet and declared himself the victor: the mission was indeed accomplished—Bush successfully defended the U.S. dollar, and thus the American Empire.

II. Iranian Oil Bourse The Iranian government has recently proposed to open in March 2006 an Iranian Oil Bourse that will be based on an euro-based oil-trading mechanism that naturally implies payment for oil in Euro. In economic terms, this represents a much greater threat to the hegemony of the dollar than Saddam’s, because it will allow anyone willing either to buy or to sell oil for Euro to transact on the exchange, thus circumventing the U.S. dollar altogether. If so, then it is likely that much of the world will eagerly adopt this euro-denominated oil system:

The Europeans will not have to buy and hold dollars in order to secure their payment for oil, but would instead use with their own currency. The Chinese and the Japanese will be especially eager to adopt the new exchange. It will allow them to drastically lower their enormous dollar reserves and diversify them with Euros. One portion of their dollars they will still want to hold onto; another portion of their dollar holdings they may decide to dump outright; a third portion of their hoards they will decide to use up for future payments without replenishing their dollar holdings, but building up instead their euro reserves. The Russians have economic interest in adopting the Euro – the bulk of their trade is with European countries, with oil-exporting countries, with China, and with Japan. Adoption of the Euro will immediately take care of the first two blocs, and will over time facilitate trade with China and Japan. Also, Russians seemingly detest holding depreciating dollars, for they have recently found a new religion with gold: their central bank is diversifying out of dollars and accumulating gold. Russians have also revived their nationalism; 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 diversification against rising mountains of depreciating dollars. Just like the Russians, their trade is mostly with European countries, and therefore will prefer the European currency both for its stability and for avoiding currency risk. Only the British will find themselves between a rock and a hard place. They have had a strategic partnership with the U.S. forever, but have also had their natural pull from Europe. So far, they have had many reasons to stick with the winner. However, when they see their century-old partner falling, will they firmly stand behind him or will they deliver the coup de grace? Still, 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 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. It is here noteworthy that for all the rhetoric about the reasons for the surviving British Pound, the British most likely did not adopt the Euro namely because the Americans must have pressured them not to: otherwise the London IPE would have had to switch to Euros, thus mortally wounding the dollar and their strategic partner.

At any rate, no matter what the British decide, should the Iranian Oil Bourse gain momentum and accelerate, the interests that matter—those of Europeans, Chinese, Japanese, Russians, and Arabs—will eagerly adopt the Euro, thus sealing the fate of the dollar. Americans cannot allow this to happen, and if necessary, will use a vast array of strategies to halt or hobble the exchange’s operations:

Sabotaging the Exchange—this could be a computer virus, network, communications, or server attack, various server security breaches, or a 9-11-type attack on main and backup facilities.

Coup d’état—this is by far the best long-term strategy available to the Americans.

Negotiating Acceptable Terms & Limitations—this is another excellent solution to the Americans. 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.

However, if an attempted sabotage or coup d’etat fail, then negotiation is clearly the second-best available option.

Joint U.N. War Resolution—this will be, no doubt, hard to secure given the interests of all other members of the Security Council. Recent rhetoric about Iranians developing nuclear weapons undoubtedly serves to prepare this course of action.

Unilateral Nuclear Strike—this is a terrible strategic choice for all the reasons associated with the next strategy, the Unilateral Total War. The American will likely use Israel to do their dirty nuclear job.

Unilateral Total War—this is obviously the worst strategic choice. First, the U.S. military resources have been already depleted with two wars. Secondly, the Americans will alienate other powerful nations. Third, major reserve countries may decide to quietly retaliate by dumping their own mountains of dollars, thus preventing the U.S. from further financing its militant ambitions. Finally, Iran has strategic alliances with other powerful nations that may trigger their involvement in war; Iran reputedly has such alliance with China, India, and Russia, known as the Shanghai Cooperative Group, a.k.a. Shanghai Coop.

Whatever the strategic choice, 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.

III. The Demise of the Dollar The collapsing dollar will dramatically accelerate U.S. inflation and will pressure short-term and long-term interest rates much higher. At this point, the Fed will find itself between two equally disastrous options—deflation or hyperinflation. The first option, deflation, known in the international finance literature as the “classical medicine”, requires stopping the monetary expansion and raising interest rates, thus inducing a major economic depression, a collapse in real estate prices, and an implosion in bond, stock, and derivative markets, most likely precipitating a total financial collapse. The alternative option is to take the easy way out by inflating, whereby the Fed pegs the long-bond yield, raises the Helicopters and drowns the financial system in liquidity, bailing out numerous LTCMs and hyperinflating the economy.

The Austrian theory of money, credit, and the business cycle teaches us that ultimately there is no in-between the mythological Scylla and Charybdis scenario—between deflation and hyperinflation. Sooner or later, as pressure on the dollar rises and inflation rears its ugly head, the monetary system must swing one way or the other, forcing the Fed to make its choice. There is no doubt that the newly-appointed Commander-in-Chief of the Federal Reserve, Ben Bernanke, an renowned scholar of the Great Depression and an adept helicopter pilot, will choose the latter course of action—hyperinflation. Bernanke has learnt well the lessons of the Great Depression and the destructiveness of deflations. He has also learnt well from the Maestro the panacea of every financial problem—to inflate his way out, come hell or high water. He has even devised ingenious unconventional ways around the deflationary liquidity trap and teaches the Japanese how to apply them. To avoid deflation, he has publicly stated that he will accelerate the printing presses and “drop money from helicopters”. If necessary, he will monetize everything in sight. He will ultimately destroy the American currency in Hyperinflation.

Hyperinflations, however, do not happen in an instant. It usually takes years before the final collapse. The Weimar hyperinflation began around 1920 and ended in 1923 with the total destruction of the currency. Similar was the fate of some post-communist countries: it took Russia and Bulgaria 7-8 years to hyperinflate their currencies before they ultimately destroyed them.

However, because the dollar is the reserve currency of the world, hyperinflating the dollar will be fundamentally different in two ways from all hyperinflations in history. On the one hand, there are tens of trillions of dollar-denominated debt and hundreds of trillions of dollar-denominated derivatives. Given that the ratio of currency to debts and derivatives is tiny, the coming hyperinflation must be necessarily of epic proportions. On the other hand, central banks around the world will fight tooth and nail to support the dollar, so that world financial system does not collapse and that their reserves do not evaporate into the nothingness. Many central banks will choose willy-nilly to support the dollar by inflating their own currencies. Thus, these two powerful forces will drive the dollar in opposite directions. Its inevitable demise may be swift and sudden, or it may be protracted and painful.

Whatever the speed of hyperinflation, ordinary Americans will have few available options to protect themselves—during crises, peoples’ first instinct is to resort to more “stable” fiat currencies of neighboring countries, like the Canadian Dollar and the Mexican Peso, but their availability will prove limited and complicated as people will most likely have to cope with governmentally-imposed capital controls. Next, people instinctively convert hyperinflating currencies to hard assets like land and real estate, but sellers refuse to accept the hyperinflating currency and quickly disappear from the market. Having run out of meaningful options to protect themselves, ordinary people will have little choice, but to convert their dollars to hard currencies like gold and silver, thus driving their prices much higher. On the other hand, central banks have no other options but gold. First, in times of crises, central banks fear the risk inherent in all fiat currencies. Moreover, not even the largest fiat currencies will accommodate their need to convert their reserves. Also, it is not practical for central banks to hold real estate and land. Thus, central banks will have no alternative, but to scramble to convert their reserves to the only hard currency known to man—gold. Historically, in times of crises, gold has always been the ultimate safe haven. When people and central banks flee en masse to gold, its value has always skyrocketed. This time, it will be no different.

© 2006 Krassimir Petrov, Ph.D.


TOPICS: Business/Economy; Government
KEYWORDS: bourse; currency; dollar; energy; gold; goldbuggery; goldbugs; iran; oil
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1 posted on 01/20/2006 4:41:00 PM PST by hubbubhubbub
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To: hubbubhubbub

Hmmm...Thanks, something to think about. 8^|


2 posted on 01/20/2006 4:45:57 PM PST by skinkinthegrass (Just because you're paranoid, doesn't mean they aren't out to get you :^)
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To: hubbubhubbub

incorrect


3 posted on 01/20/2006 4:51:16 PM PST by lonestar67
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To: hubbubhubbub

Ominous


4 posted on 01/20/2006 4:51:55 PM PST by Enterprise (The MSM - Propaganda wing and news censorship division of the Democrat Party.)
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To: hubbubhubbub

Another go-to-gold article.
Strange that he job hunts in his bio. Opportunism I guess.

From 321Gold:
About the Author
Krassimir Petrov has received his Ph. D. in economics from the Ohio State University and currently teaches Macroeconomics, International Finance, and Econometrics at the American University in Bulgaria. He is looking for a career in Dubai or the U.A.E.


5 posted on 01/20/2006 4:56:13 PM PST by gotribe (Hillary: Accessory to Rape)
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To: gotribe
Another go-to-gold article.
Strange that he job hunts in his bio. Opportunism I guess.

Maybe he wants to rake in the dinars. Gold dinars, that is.


6 posted on 01/20/2006 5:01:38 PM PST by Max in Utah (By their works you shall know them.)
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To: lonestar67
I agree......most middle eastern logic revolves around 2,000 year old theology that is lacking in anything positive....they just want to kill / destroy any culture other than Islam......they will receive total destruction for their deeds and the rest of the world will have to learn how to live without Islamics oil.......
7 posted on 01/20/2006 5:02:35 PM PST by chuckr
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To: hubbubhubbub

When you take into account that North Korea has been printing $100,000,000 per year in US currency and distributing it into the worlds money supply, we could be in for some real inflation. I have already noticed the cost of consumable goods increasing way more since 2000 than they did in the 90's. I don't know about this Empire that taxes other nations through devalued currency nonsense though. I think China still holds a considerable interest in the value of the dollar. Hyperinflation here means we don't buy products there.


8 posted on 01/20/2006 5:02:57 PM PST by willyd (No nation has ever taxed its citizens into prosperity)
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To: hubbubhubbub
Thus, these two powerful forces will drive the dollar in opposite directions. Its inevitable demise may be swift and sudden, or it may be protracted and painful.

So should I be excited or terrified.... or just call a gold broker to convert my worthless dollars?

9 posted on 01/20/2006 5:04:51 PM PST by operation clinton cleanup
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To: operation clinton cleanup

Mr. Petrov will be happy to take your money for his estate outside Dubai.


10 posted on 01/20/2006 5:07:20 PM PST by gotribe (Hillary: Accessory to Rape)
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To: hubbubhubbub
Three points:

1. If Oil is replaced by another technology developed, or heavily invested by the United States, this authors fantasy is over.

2. There is no stable currency without the US Dollar. Is he suggesting that the Euro is backed by Gold? Of all the exports in the World oil may be critical, but it's a very small percentage of World trade. Even if oil prices switched to Euros, which it will not do, Economies must still buy the oil. Chinas exports are bought by those with money, not oil. Do you think China would trade off having the US as a customer to having only the Middle East as a Trading Partner?

3. We have FOOD, and the ability to produce alot more than we do already. I say Food is the new oil, under the authors scenario, because nations states will have a hell of a time producing enough on their own, and maybe we just "don't accept Euros for Grain"

Another doubter of the future of America. He may be right that things would get tough, probably real tough. But, if he thinks the world is ready to jump into a global depression just for the sake of one dictator in Iran, he's crazy.
11 posted on 01/20/2006 5:12:10 PM PST by Greenpees (Coulda Shoulda Woulda)
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To: lonestar67
This piece is not half-baked. It's not even warm. the author is either ignorant or attempting to mislead.

If this aweful (!) thing should come to pass, producers will have excess euro's to sell, not excess dollars. No net effect on the dollar vs the euro, because the lower consumer demand for dollars is exactly offset by the lower producer supply of dollars.

moreover, if anyone wants to buy oil in euros or zlottys or cowpies, they can. find a seller who wants cowpies or a bank that will cowpies for dollars, and you are in business.

12 posted on 01/20/2006 5:16:03 PM PST by nj_pilot
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To: hubbubhubbub

Financial Sense Online is run by a pro-Metals brokerage,
which means you can ignore this as scare-mongering. Kind of like the peak oil folks.


13 posted on 01/20/2006 5:21:22 PM PST by KingKenrod
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To: Greenpees
"But, if he thinks the world is ready to jump into a global depression just for the sake of one dictator in Iran, he's crazy."

They might not do it for Iran. They might do it because they are European, they have been taught to hate our wealth and power. They might do it just to watch us bleed out.

He is right about inflation. It is as much a tax on the rest of the world as on Americans.
14 posted on 01/20/2006 5:41:27 PM PST by Pete from Shawnee Mission
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To: hubbubhubbub

I'm still perplexed why we didn't put a oil embargo on Iran after naming them to the Axis of Evil. By not doing so we kinda supported their military build up and such.


15 posted on 01/20/2006 5:49:19 PM PST by Tyche (A half truth is a whole lie)
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To: Enterprise

OK, I'm dumb. So what if the dollar is 1-1.2E or 1-1.5E? It just makes our exports cheaper, and imports more expensive. People will travel here, not us there. Why again is this bad?


16 posted on 01/20/2006 6:29:17 PM PST by uscabjd ( a)
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To: hubbubhubbub

Well, keep in mind that a similar scheme proposed in Dubai went nowhere. That said, the Iranians have a bigger incentive - namely, destroying the petrodollar - to push their bourse than the complacent Arab oil sheikhs ever did. However, given the internal ferment in Iran at the moment, I don't expect the March-slated bourse to open much before 2007.


17 posted on 01/20/2006 6:32:56 PM PST by Lejes Rimul (I was right about Iraq all along. Told you so.)
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To: Jackknife

MAJOR PING


18 posted on 01/20/2006 6:37:01 PM PST by The Drowning Witch (Sono La Voce della Nazione Selvaggia)
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To: willyd
When you take into account that North Korea has been printing $100,000,000 per year in US currency

$100 million isn't a threat to country with a GDP of $11,750,000,000,000. About .0008% wouldn't affect us at all.

19 posted on 01/20/2006 6:48:30 PM PST by sharkhawk (Bear Down Chicago Bears)
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To: hubbubhubbub
So does this mean I should sell my house, and all my assets and start hoarding gold coins in my crawlspace????

I've got my broker on hold RIGHT NOW....and he's about to call the white-jacketed men on me......

20 posted on 01/20/2006 6:48:59 PM PST by The Drowning Witch (Sono La Voce della Nazione Selvaggia)
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To: hubbubhubbub

Ah, this dolt is way behind the curve. The world doesn't really even run on dollars anymore. It runs on credit, the future, promises.

That's it.

Don't like it, go to all trade goods. No one is stopping you. Life would be like..like...any rural third world pit.


21 posted on 01/20/2006 7:16:17 PM PST by Leisler ("For English, please press two.")
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To: Greenpees; Lejes Rimul

Thxs, for your interesting points..


22 posted on 01/20/2006 8:28:06 PM PST by skinkinthegrass (Just because you're paranoid, doesn't mean they aren't out to get you :^)
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To: hubbubhubbub

Why should the Euro or any other currency be any more desirable than the dollar? It seems more likely to me that our foreign trading partners would simply start be insist on payment via some sort of international barter.


23 posted on 01/21/2006 2:53:00 AM PST by The Duke
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To: The Drowning Witch
Thanks for the ping.
24 posted on 01/21/2006 9:27:58 AM PST by Jackknife ( "I bet after seeing us, George Washington would sue us for calling him 'father'." óWill Rogers)
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To: hubbubhubbub

YAWN!!


25 posted on 01/21/2006 9:29:41 AM PST by DCPatriot ("It aint what you don't know that kills you. It's what you know that aint so" Theodore Sturgeon)
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To: The Duke; All; DoctorZIn; RaceBannon; humint

Barter would make Islamic Iran deliriously happy.

The populace is already living at a subsistence level that AhmadiNejad can sustain through barter. Even employed workers have been searching through garbage bins to find enough food to feed their families. Many have not been paid for months and months.

Nor is there anyone internally who can firmly oppose his (and Ayatollah Mesbah Yazdi's) emerging dictatorship backed by the IRGC commanders he has put in place in all serious government positions.

The recent Falcon air crash took out all the top IRGC commanders of the Ground forces, who were virtually Rafsanjanis only available military backing.

The new leadership - unlike the old guard Clerics - has few if any assets worth protecting against international currency crashes.

With substanial oil and natural gas reserves he has "oil barter currency" more than sufficient unto the day.

And finally, as the disruption to most of the rest of the world occurs, he glories in achieving his Hojatieh apocalyptic philosophy, which promotes misery, death and destruction and opposes efforts to prevent it.

May I humbly suggest that doubters about the serious disruption that may happen with the destabilization of the US Dollar through Iranian action and consequently of the Euro and the domino effect that occurs, still think in terms of rational input and global responsibility being shown by all countries.

Instead of a Pol Pot lunacy that may not be powerful enough to do harm on purpose but can create untold damage by entering the game and upsetting long established apple carts. Some of which currently teeter-totter at a point of imbalance where a slight shove can tumble them like a house of cards. Beyond the power of any economy or group of economies to counteract the cataclysm.

I have no personal wealth, nor investments in gold, just an expertise about Iran and a working knowledge of intertwined world economies.

What seems to throw off accurate analysis and assessment is cultural experience, mindsets based purely on Western logic and the recent past. This tends to skew the picture and mislead the analysts as it misses the utterly inconceivable that's now present in the shadows.


26 posted on 01/21/2006 11:47:59 AM PST by FARS
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To: FARS
upsetting long established apple carts... throw off accurate analysis and assessment.

Thanks for the ping. Yes the Iran problem is very big, antagonists do challenge the status quo and yes, sometimes analysts are wrong for more reasons than are worth counting. You've painted a clear picture of your perception of Iran but given no indication of how it should be or how to achieve how it should be. What are some of your opinions, analysis and suggestions to resolve the problem?

27 posted on 01/21/2006 12:55:55 PM PST by humint
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To: humint; All; DoctorZIn; RaceBannon

In the past, when time frames permitted, I had suggested psyops as a weapon of choice to undermine and weaken the Mullahs, followed by a government in exile - such as the one being adopted with the leading Syrian defector and some selective, dark Special Ops activity from perhaps Baluchistan to remove key individual targets.

I had hands-on experience with psyops when I tried to help deal with a dozen urban guerilla tacticians brought into the Soviet embassy in Tehran to destabilize the Shah and orchestrate the daily activities of the anti-Shah groups like the MEK, the Fedayeen and the pro-Khomeini Hezbollahs.

The overthrow of the late-Shah, in case someone still does not know, was initiated by the Soviets and assisted through Jimmy Carter, whom many in Europe called the best Soviet President the Americans ever had.

The Marxist-Islamist MEK and Fedayeen would have been in power today had it not been for the only organized structure left in Iran after the fall of the Shah being the hundreds of mosques throughout the country. Similarly to more recently in Iraq, the clerics took charge of neighborhoods, then towns etc., leading to the implacable hatred between the MEK and Mullahs we see today.

Seeing "their" revolution stolen out from under them, the MEK bombed, assassinated and otherwise killed the clerics at the highest levels.

They fought against Iran in the Iran-Iraq war, not as enemies of the Iranian populace but as foes of the Mullahs, in an effort to remove them.

Ever since they have been hunted down and abused even more stringently than Iranian students. Among whom they also numbered. And in turn they have used similar tactics to retain a following of what has become a counter-productive but virulently anti-Mullah personality cult of Massoud and Mariam Rajavi.

Note, however, that having the MEK in power would be as bad if not worse than the Mullahs, even under President AhmadiNejad.

Also, their becoming labeled a terrorist group, originated in an effort to negotiate with the Mullahs who fear and hate the MEK and offer them assurances that America would not back or support their staunchest enemy group.

To cut this short, there is no one-step solution I can think of, since there is no charismatic figure or leader, not even among the Monarchists, who can achieve step one - to eradicate the Mullahs. The young Shah cannot afford to spill the amount of blood needed for him to take over power without it coming back to bite him.

Nobody else has the military means or an adequate number of followers inside or outside Iran.

A drastic possibility, which might work, is a two step one. A government in exile that becomes recognized by the Wetern world and unleashes the MEK (no, I do not like them either, I'm being an analyst/tactician) into Iran.

They do the killing for everyone, demand and receive temporay power and then are removed in phase two, perhaps violently - as murderers for the blood they shed. Much easier to achieve than uprooting hte Mullahs. Unless Putin steps in with total backing of the new MEK government, then we have a problem as bad or worse as before.

Now, with Hojatieh driven AhmadiNejad at the helm and nuclear cabability perhaps emerging as soon as March, a virtual destruction of some 5,000 military and nuclear related targets in a single series of bombing raids seems the only option. Sounds horrible, is horrible. Got any better ideas?

Some collateral damage can be reduced if targets and sites built and hidden below towns and neighborhoods receive ample, early warning of being bombed and people are urged and told to leave - or stay at their own risk. No exact date needs to be given away.

Giving up these targets would not help Iran much as they do not have the means to defend so many sites against an armada of bombers.

Please don't label me a warmonger for laying out strategy that might, just might work to stop a lunatic regime from killing millions of us or sending us into financial difficulties that would make our lives resemble those in Iran - even if only for a while.






28 posted on 01/21/2006 1:53:45 PM PST by FARS
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To: FARS

Wow, where we you a few months ago?

Recently, I was posting some articles for a friend who held similar views (He has some personal history on/in Iran) and some personal kowlege of these things.

We both postulated on the possible use of the MEK as part of a coordinated effort to oust the Mullah's controlled system in Iran.

Welcome aboard and how long have you been lurking??? :)


29 posted on 01/21/2006 2:43:07 PM PST by RaceBannon ((Prov 28:1 KJV) The wicked flee when no man pursueth: but the righteous are bold as a lion.)
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To: RaceBannon

Thank you.

Lurking for quite a while, finally came out of the shadows to share some experience by posting - now that Iran has become such a threat.

About your friend, I'm glad that I'm not the only one who thinks this way. Two is better than one. :-))


30 posted on 01/21/2006 2:55:05 PM PST by FARS
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To: FARS

Interesting ideas.

I am very much anti-Marxist - as are most Freepers - but the Communists at least were not such flakes that their big aim in life was to die. Communism simply wanted to dominate us, but because it's a crummy system, it couldn't do so and collapsed.

The Mullahcracy of Islam, on the other hand, is much more dangerous. They want to die and take the whole world down with them.

I think the US is between a rock and a hard place. The Mullahs are bad, the MEK is bad, but there's nobody in between who seems to have the clout to mobilize the probably many Iranians who simply want to get on with their lives and possibly go to Europe or the US to study and come back and build a business and start a life in Iran.

I think that the only thing that is holding the US back is that there are obviously many folks in Iran who just want to get along and have a life (and not kill Jews, Americans, etc.).


31 posted on 01/21/2006 3:03:08 PM PST by livius
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To: nj_pilot; DoctorZIn; nuconvert; FARS; SandRat

What he brought up though, was interesting.

What if these countries just decided to dump dollars?

What if they DID decide to purchase oil with Euros?

While their costs might be higher due to exchange rates, Their decision to go off the dollar and create their own trading block financially IS a de-stabilizer.

The dollar is not a necessity to purchase anything anymore, especialy with an Iranian oil source that can only be closed through an act of war ourselves.
It is the response to this that would prove interesting, for if their little trading bloc took wings, slowly but openly, inflation a divestment in the US due to investors losses based on inflation would be an act of war.


32 posted on 01/21/2006 3:05:55 PM PST by RaceBannon ((Prov 28:1 KJV) The wicked flee when no man pursueth: but the righteous are bold as a lion.)
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To: livius

What is sad, is that the MEK seems to be the only local game, with the only trained people who hold the ideology to actually carry it out...unless things are being done in secret that we are unaware of.


33 posted on 01/21/2006 3:07:27 PM PST by RaceBannon ((Prov 28:1 KJV) The wicked flee when no man pursueth: but the righteous are bold as a lion.)
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To: operation clinton cleanup

Everyone must gather information, analyze and according to their own needs and their station in life make investment decisions that protect their own net worth.


34 posted on 01/22/2006 5:44:00 PM PST by hubbubhubbub
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To: Greenpees

1. Very big if
2. There is no stable currency, period.
3. True, we have food but its production is dependent on abundant supplies of cheap fossil fuels.


35 posted on 01/22/2006 5:46:39 PM PST by hubbubhubbub
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To: KingKenrod

Ignorance is a personal choice.


36 posted on 01/22/2006 5:47:28 PM PST by hubbubhubbub
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To: Tyche

Our military is stretched very thin right now. No one wants a draft.


37 posted on 01/22/2006 5:48:39 PM PST by hubbubhubbub
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To: Lejes Rimul

Time will tell


38 posted on 01/22/2006 5:49:23 PM PST by hubbubhubbub
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To: The Drowning Witch

See post # 34


39 posted on 01/22/2006 5:50:24 PM PST by hubbubhubbub
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To: The Duke

"Why should the Euro or any other currency be any more desirable than the dollar?"

Because there are folks, especially in the Arab world, that hate the U.S.


40 posted on 01/22/2006 5:52:24 PM PST by hubbubhubbub
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To: DCPatriot

Go back to sleep. Didn't mean to wake you up.


41 posted on 01/22/2006 5:53:05 PM PST by hubbubhubbub
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To: FARS
In the past, when time frames permitted, I had suggested psyops as a weapon of choice to undermine and weaken the Mullahs… I had hands-on experience with psyops when I tried to help deal with a dozen urban guerilla tacticians brought into the Soviet embassy in Tehran…

I like to think of American Psychological Operations as spreading the truth. The truth has a very purifying and healthy effect on open societies. Alternatively, it has the opposite effect on elitist and isolationist governing bodies. Governments can and do keep secrets in the name of national security but what matters, with respect to positive social change in my opinion, are the collective knowns. That you personally “helped orchestrate various organizations from the Soviet Embassy to oust the Shah” is not collectively known and cannot be collectively known unless said operations have been declassified. Is there unclassified information available to FR about your personal experiences? It goes without saying that you should keep all classified information you have access to away from those of us without a security clearance.

Without a doubt, the Iranian revolution is a fascinating historical event and, year by year, more light is shed on it. As information like what you’ve shared here is verified and incorporated into analyses, the potential for good decision making in an open and democratic environment increases. That’s more than good, it’s great!

TRUTH OPS

As the truth takes hold in Iran so too does the potential for democracy there. Terrorism, nuclear noncompliance and habitual human rights abuse are symptoms of the Iranian government’s elitist and isolation self perception. Elitists and isolationists victimize themselves and thrive on iterations of blame and hatred only breaking the cycle to foment corruption and war. The architecture of power in Iran is truly sick. That sickness manifests itself in the great number of failures of the Iranian government and successes of the Iranian people, in spite of the Iranian government’s oppressive policies. Exposing these truths constitute truth ops. The truth is spreading naturally to Iran and that’s great news for democratically minded Iranians and Americans who long for the day when an American flag may fly beside the flags o other nations in Iran without degradation.

Performing truth operations need not require violence but may elicit violence from the Iranian government. The Iranian government already uses terrorist violence as a tool of foreign policy therefore the threat to society is that Iranian officials may order an increase in its violent foreign policy. So the free world is left to decide; remain in a situation where the Iranian government commits and supports terrorist violence and Free Citizens are required by their governments to accept the decimation of free men, women and children. Or will the free world hold the Iranian government accountable for the terrorism it supports with the explicit intent to end Iranian terrorism, risking a potential escalation of Iranian terrorism. Time has shown that every belligerent act the Iranian government commits, international consensus to confront the government of Iran for its crimes grows. The question is; will consensus grow fast enough to catch the Iranian government’s maneuvers to acquire the capacity to create nuclear explosives? Citizens of free societies can not be expected to tolerate the decimation of entire cities from the face of the earth!

42 posted on 01/23/2006 10:44:12 AM PST by humint
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To: humint

Incidentally, you have just waged an Information Warfare gambit by mis-stating what I had written. You say I wrote or said:

"That you personally 'helped orchestrate various organizations from the Soviet Embassy to oust the Shah"

which is the exact opposite of the truth and what I stated in my post.

I had written that that I had OPPOSED Soviet urban guerilla tacticians based in the Soviet Embassy in Tehran and tried to prevent their efforts to oust the Shah.

You did exactly what I mean by PsyOPs, I noticed, let it slide then decided since your post was public, my correction should be, too. I'm not currently in hunting mode.


43 posted on 01/24/2006 9:32:19 AM PST by FARS
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To: FARS
ORIGINAL: I had hands-on experience with psyops when I tried to help deal with a dozen urban guerilla tacticians brought into the Soviet embassy in Tehran to destabilize the Shah and orchestrate the daily activities of the anti-Shah groups like the MEK, the Fedayeen and the pro-Khomeini Hezbollahs.

UPDATE: I had written that that I had OPPOSED Soviet urban guerilla tacticians based in the Soviet Embassy in Tehran and tried to prevent their efforts to oust the Shah.

Please accept my sincerest apologies. I misinterpreted the context of your comment. What you had originally written led me to believe you were inside the Soviet Embassy and that President J. Carter had ordered Americans to assist the Soviets overthrow the Shah. I had never heard of anything remotely similar to what you were suggesting and that's why I assumed it was either bogus, classified or a misinterpretation therefore I asked for a follow up.

In general, I try to read things very carefully, looking for ideas and interpretations I've not considered before. Your list of experiences and action items provides a lot to consider. Now that you've corrected me, the rest makes far more sense. To be very clear on this, my mistake was not a shot across your bow.

44 posted on 01/24/2006 10:23:57 AM PST by humint
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To: humint

Carter WAS closely linked to the Soviet overthrow of the Shah.

As I may have previously said, in the opinion of many analysts and experts, he was the "best Soviet President America had ever had".

During his term in office, his actions repeatedly favored Soviet international policy rather than that of the USA or Western interests. Specially in Africa and the Far East but also with Cuba.

Your post, unintentionally, provided a perfect example of the type of disinformation we need to use against Iranian clerics.


45 posted on 01/24/2006 11:34:20 AM PST by FARS
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To: hubbubhubbub
The Great Depression with its the preceding inflation from 1921 to 1929 substantially increased the amount of paper money in circulation without the correspondent increase in gold.

Interesting. According to this guy, we had inflation while on the gold standard. I didn't think it was possible.

46 posted on 01/24/2006 12:09:14 PM PST by Toddsterpatriot (Why are protectionists so bad at math?)
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To: Toddsterpatriot

Do you even know what inflation is?


47 posted on 01/24/2006 12:24:19 PM PST by hubbubhubbub
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To: hubbubhubbub

Yes. I also know what deflation is. How about you?


48 posted on 01/24/2006 12:26:40 PM PST by Toddsterpatriot (Why are protectionists so bad at math?)
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To: Toddsterpatriot

What is inflation?


49 posted on 01/24/2006 1:10:25 PM PST by hubbubhubbub
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To: hubbubhubbub
What is inflation?

inflation

2 : an increase in the volume of money and credit relative to available goods and services resulting in a continuing rise in the general price level

What is deflation?

50 posted on 01/24/2006 1:18:34 PM PST by Toddsterpatriot (Why are protectionists so bad at math?)
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