Brushing aside dangerous precedents, Iran dumps the Dollar
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In a significant economic move, Iran has declared that it is no longer going to use US Dollars in its foreign trade transactions.
“In trade exchanges with the foreign countries, Iran uses other currencies, including Chinese Yuan, Euro, Turkish Lira, Russian Ruble and South Korean Won,” Iran’s Central Bank announced on Saturday.
For those of us that aren’t bankers, economists or politicians, this might not mean much. But if we look at how the United States has reacted to oil-rich countries doing such a thing in the past, we quickly realise just how alarming this development might be.
For example, with America’s 2003 invasion of Iraq now understood to have been based on economic grounds rather than on WMDs, let us consider the following precedent.
In his 2005 book Petrodollar Warfare, author William R. Clark makes an interesting revelation on page 28.
“On September 24, 2000, Saddam Hussein allegedly emerged from a meeting of his government and proclaimed that Iraq would soon transition its oil export transactions to the euro currency.”
By 2002, Saddam had fully converted to a Petroeuro – in essence, dumping the dollar.
This was a crisis for the U.S in numerous ways: firstly, because Iraq used the Dollar in its oil trade and, with some 112 billion barrels of oil, represented the fifth largest proven oil reserves in the world.
On March 19, 2003, George W. Bush announced the commencement of a full scale invasion of Iraq.
An article in Global Research finds a similar precedent shortly before NATO’s 2011 war against Libya.
According to a Russian article titled “Bombing of Lybya – Punishment for Gaddafi for His Attempt to Refuse US Dollar,” Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar.
Gaddafi suggested establishing a united African continent, with its 200 million people using this single currency. … The initiative was viewed negatively by the USA and the European Union, with French president Nicolas Sarkozy calling Libya a threat to the financial security of mankind; but Gaddafi continued his push.
Anyone familiar with what followed this can understand how Iran may become targeted for similar action.
With oil prices hovering around $50 per barrel and the U.S shale industry already hurting, is it inconceivable that those with vested interests may be keen to play a part in drumming up another manufactured argument for war?
As we see in the paragraphs above, there is certainly precedent.
The neoconservative political forces in Washington D.C are in lockstep with Israel’s ruling Likud Party in calling Iran an imminent national security threat.
The problem with this for the U.S and Israel is that Iran is not Iraq, or Libya.
Iran is a major regional power with close security ties to Russia and China. It has a defence pact with Syria and a dangerous alliance with Hezbollah (an army with 50,000 rockets ready to fire at Israel’s major cities).
Attacking Iran would guarantee a full-scale regional war in a part of the world where oil accounts for more than 30% of the world’s total supply.
Doom and gloom aside, this move is likely to raise many eyebrows in the energy sector and financial markets alike.
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