[Peace-discuss] Petrodollar

[n.dahlheim at mchsi.com]

Carl is correct in noting that the U.S. gets not much more than 10% of its oil from the Middle East, but 
the key is that the U.S. must have the dominant position in terms of controlling Middle East oil.  Why?  It 
doesn't matter if we consume Middle East oil, it is simply that all world transactions of petroleum must 
occurr in dollars.  This process, that authors John Perkins, David Spiro, and Peter Dale Scott have all 
mentioned in books and articles at length, is petrodollar recycling.  Petrodollar recycling is the only 
thing holding up U.S. currency amidst profligate corporate welfare, massive trade deficits, stupdendous 
accounting deficits, and the lack of any export-based manufacturing.  So, if Iran were to gain control of 
Iraqi oilfields and set up an oil trading market denominated in Euros; a run on the dollar wouldn't be far 
off.  So, all oil trade must be controlled by the United States if the dollar is to remain solvent.  After all, 
there is no other reason to feed this beast if you are an investor.  The threat of force and the stability of 
the global oil trade is the only thing holdin up the dollar's value.  That's one of the reasons why nobody 
in government has offered any real resistance to the Iraq war---our currency depended upon it.  
Saddam Hussein responded to a decade of genocidal U.S. sanctions by striking deals with French, 
Russian, and even a few Chinese oil firms to rebuild it dilapidated oil infrastructure.   Back in November 
of 2000, he added a caveat to these plans that only snuck their way onto the back pages of the 
business pages...  they were going to sell oil from these redeveloped fields on the open market using 
Euros.  125 billion barrels of oil owned by geopolitical competitors eager to destroy petrodollar 
hegemony was not in the U.S. interest.  That explains why realist politicians, businessman, and 
academics acquiesced to the planned invasion of Iraq headed by the more militant neocons.   Well, the 
realists led by Baker, Brezinski, Kissinger, and others are starting to move as evidenced by the slow 
exodus of neoconservatives.  The arrival of Gates from the Baker Study Group as a prime example of 
this process taking place.  The more I look at the Iraq War the more I see it as an inevitability of our 
committment as a society to endless consumption and wasteful living.  Mechanized agriculture, car-
dependent communities, Big Box retailing, massive debt (personal through federal) all were made 
possible by petrodollar hegemony.  As the U.S. sacrifices its cultural, social, and labor capital to the 
amoral economic profit motive driving globalization, the military card used to protect petrodollar 
hegemony is the only one left in the deck.  So, we will not be leaving Iraq unless we change our 
relationship to the material world and the natural world overnight.

I smell a draft....