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The Greenback War

Every so often, I find something like this in my mail:

“You are obviously against the war in Iraq. Why don’t you speak out against it in your blog?”

I’ve thought about this a lot. I’ll give you the short version first:

Just because I know better than to put an aluminum ladder next to a power line it doesn’t logically follow that I know how to treat electrocution.

The long version might seem equally cryptic, so please bear with me. We still have no idea why the Bushies were so incredibly eager to get into this war in the first place. On September 11, 2001, Dick Cheney was already telling his staff to find a link to Saddam because an invasion of Iraq was already on his mind. Nevermind the complete lack of evidence tying things together – Cheney wanted Saddam.

This is important as we try to figure out how we are going to get out because we need to be sure that we don’t cause even more misery on the way out of this mess. I’m not against war as much as I am against international power games causing death and destruction and servitude. War is only one part of this equation.

How did we get into this mess then?

I have a tendency to see current events as nothing more than a diversion away from what’s really going on. When a story becomes so big it dominates the nooze constantly, it is what goes unreported that you have to pay attention to. That’s where people get away with things.

The most obvious real power play in this is the scramble for oil. I’ve long accepted this as the real issue in some form, if for no other reason than it was our addiction to oil that shoveled hundreds of billions of dollars at Saddam (and other dictators) allowing him to create the world’s fifth largest army in 1990. You can’t get away from oil as a central issue. But what it’s really about is the money needed to keep all of this going.

Consider for a moment that Saddam started pricing his oil in Euros in 2000. You can do a search on “saddam euro” and find many people who have written on this, which makes me wonder where they were when I was first on this in 2003. Why is this so important?

Oil is priced in US Dollars worldwide. Period. If you want oil, and what industrial nation doesn’t, you have to have dollars to do it. At about 32 billion barrels a year running around $75 each we’re talking about $2.5 Trillion in global commerce that requires the greenback to take place. For comparison purposes, this is about 22% of our 11.8T$ GDP or about 25% of the total money in place, as defined by M3, at about 10T$. Petrotrading is a big part of what makes the buck what it is.

If oil was priced in other things? Well, people around the world wouldn’t need as many dollars. They wouldn’t buy US bonds as a hedge for their oil needs in order to smooth out the currency translation. The appetite for all things American would go down considerably.

Think this over for a moment. We have an addiction to oil, but it’s sold based on a Dollar Standard. We get to print the currency that is used to support our addiction. Without that power, our addiction becomes even more dangerous, and our ability to pay for it with paper printed as T-Bills and bucks is drastically limited.

In short, I think this war is about the US Dollar, not just oil.

Why on earth does this matter? It maters a lot. You have to believe that the Saud family has accepted this war, either by giving it their blessing or by accepting that they have no choice. Their assets are denoted largely in dollars, and our largess has allowed them to accumulate their share of our war toys. If the dollar were to crash, so would the Saud family. So would Israel, for that matter. There would be a lot more misery than there is now if this kind of turmoil was unleashed suddenly on the world.

That doesn’t mean it’s not something we’ll just have to get through, and it doesn’t make the illegal and immoral war that we are in the middle of any more acceptable. It merely highlights the simple and obvious truth of the whole situation – war doesn’t’ solve a damned thing.

Getting out of this is going to be tricky, but getting out of this without any more avoidable misery is going to be even harder. Without an administration that is willing to be honest about why we went in, we are likely to blunder our way out much as we blundered our way in.

I don’t know exactly what is going on here, but I do know one thing for sure: we are responsible. First we have to be honest about what’s going on, and then we can take responsibility for what we have done. Until we’re honest, I’m afraid we are likely to only make things worse no matter what we do.

2 thoughts on “The Greenback War

  1. Pingback: The Implosion Begins « Barataria - the work of Erik Hare

  2. Pingback: Post Dispatch « Barataria - the work of Erik Hare

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