Structural Changes–Destruction Of The U.S. Dollar
By David J. Jonsson (03/25/2006), American Daily - Phoenix, Arizona
FULL REPORT: http://americandaily.com/article/12589
[SNIP]
Structural Changes
The destruction of the Dollar is a complex issue. In most cases, the proponents of the destruction fall into the camps of marketers of gold and followers of Peak oil theories. In most instances the case is based on looking at one particular event and not connecting the dots among multiple simultaneous events. Any one event would not make the sky fall. I like many others discounted the theory on that basis. Unfortunately, the perfect storm of destruction of the Dollar are also occurring at a time and contributing to the Perfect Storm which is ushering in the New World Order—the post post Cold War Era.
The goal of the Leftist/Marxist – Islamist Alliance is also to create a new world order. This alliance or Cabal realizes that that they may not have the military might against the greatest military power and hence plan to use economic, energy, transportation infrastructure and political action to achieve their goals. Therefore a critical element of the plan is replacing the Dollar as the world’s reserve currency. The Cabal brings together the members of Shanghai Cooperation Organization (SCO), the Organization of Islamic Conference (OIC) and its related organization the Islamic Development Bank (IDB), and Mercosur as well as other lesser participants.
The structural changes that are occurring include numerous trade agreements between members of Cabal that trade in a currency of their choice. The goal of these agreements is to develop large markets, which will ultimately equal or exceed the U.S. market thus allowing countries such as China to reduce their holding of U.S. treasuries. In many cases the market development also included arms trafficking in exchange for long-term government–to-government energy supply deals. The ultimate goal is to create the bipolar New World Order.
In a meeting at the Arab Brazilian Chamber of Commerce Jordanian Prince El Hassan Bin Talal—a Muslim and president of the Club of Rome and former Brazilian president Fernando Henrique Cardoso and with the mayor of São Paulo, José Serra on March 21, 2006, he stated that Latin America plays an important part in the strengthening of South-South cooperation. "Latin America plays an important part in bringing new dynamics to South-South dialogue. Talal believes that the countries of the so-called BRIC (Brazil, Russia, India and China) have conditions to articulate themselves to develop policies aimed at multilateralism and to influence the reform of the United Nations (UN). "The Prince was very impressed with the possibility of dialogue not only between Brazil and the Arab countries” “It is essential to fight for something,” he said, referring to a New World Order based on humanitarianism and peace.
Factors Destabilizing the Dollar
· Oil Trading in Euro and the Iran Oil Bourse
· The real-estate bubble starts collapsing
· Bank of China’s decision to allow investors to buy and sell gold using their USD
· Continued increase of U.S. public and trade deficits in 2006
· Growing doubts in the U.S. themselves on the reliability and interpretation of US economic statistics
· The Potential for Military Intervention in Iran
· Increasing risk of Conflict with China
The Future of Oil Trading in Euro - Creation of the Iranian Oil Bourse
One of the elements of the plan includes the pricing and trading of oil in Euros. For the plan to work oil producing countries and purchasers will gradually convert the oil trading to alternate currencies. The primary issue is when will the Euro be a significant currency of oil trade—not specifically on the Iran Oil Bourse. With the conflicts existing between the Shia and Sunni countries, the IOB may not have the major impact some anticipate. Iran oil production amounts to 4 percent of world oil.
Iran's opening of an Oil Bourse priced in Euros (And possibly ultimately in the Islamic Gold Dinar.) was originally planned to initiate operations at the end of March 2006. According to the Iran Ministry of Petroleum the delayed opening is a result of “technical glitches.” No new date has been set. While Pravda on January 21 indicated that the IOB opened. The opening may be the end of the monopoly of the Dollar on the global oil market and potentially impact the Dollar as the reserve currency for world trade. The longer-term result is likely to upset the international currency market, as producing countries will be able to charge their production in Euros also. In parallel, European countries in particular will be able to buy oil directly in their own currency without going though the Dollar.
Concretely speaking, in both cases this means that a lesser number of economic actors will need a lesser number of Dollars. This double development will thus head to the same direction, i.e. a very significant reduction of the importance of the Dollar as the international reserve currency, and therefore a significant and sustainable weakening of the American currency, in particular compared to the Euro. The most conservative evaluations give €1 to $1.30 US Dollar by the end of 2006. But if the crisis reaches the scope anticipated, estimates for the Euro in 2007 are even higher.
Iran’s plan is to open a new oil bourse (exchange) on which countries all over the world can buy and sell oil and gas in Euros. It also establishes a new oil “ marker “ based on Iranian crude and denominated in Euros, in open rivalry to the existing West Texas, Norway Brent and UAE Dubai markers, all of which are calculated in U.S. dollars. It should be obvious that if the bourse opens as planned that it would reduce considerably, over time, the need for dollars by all the Eurozone and as well as much of the rest of the world. Russia has already moved in this direction.
In order to contemplate the consequences of the opening of the Euro oil market in Iran, it is necessary to look at its origins. However surprising this may be, the man behind the idea is the British financier Chris Cook, former director of the International Petroleum Exchange in London. In 2001 he wrote a letter to the head of the Iranian Central Bank Mohsen Nourbakhsh.
The letter said that the structure of the international oil markets is closely linked to trade brokers, and especially to investment banks, which has a disadvantageous effect on states such as Iran, which are both producers and consumers at the same time. Chris Cook advised Iran to make a decision as soon as possible about creating a Middle East exchange for energy resources, which would set a new standard for oil prices in the Persian Gulf.
And not a word was said about “opposing the Atlanticists.” Ideas for shaking the dollar through unilateral efforts have always fallen apart – Iran, if anyone, should know about that.
We remember how at the end of the 1970s, when the OPEC countries agreed to sell oil for dollars and inflated the selling cost of a barrel, oil prices rocketed up by 400%. France, Germany and Japan suddenly decided to purchase oil in their own currencies and thus lower the pressure from the American currency.
According to the Pravda analysis: In reply the U.S. Treasury and the Pentagon did everything they could to ensure that this did not happen: secret diplomatic treaties, threats and military agreements were taken between the USA and the main OPEC oil producer, Saudi Arabia.
This is what started a new stage in the unlimited power of American financial system. Profit from the export of oil dollars by OPEC countries ended up in the hands of large banks in New York and London and resurfaced in the form of loans to countries experiencing an oil deficit. For example, to Brazil and Argentina, which would later be caught up in the quagmire of the tragic Latin American debt crisis.
On February 14, 2006 Syria switched all of the state's foreign currency transactions to Euros from dollars amid a political confrontation with the United States. The switch would mean Euro pricing for crude oil sales, a major foreign currency earner for Syria.
The latest official figures show Syria imported $6.7 billion goods in 2004 and exported $5.4 billion. Oil output is about 400,000 barrels a day.
Venezuela’s President Hugo Chavez is also trying to get away from the fiat Dollar. He had entered into trade agreements with other South American countries, such as Cuba, to barter services and goods for oil without the use of any currency. Bolivia’s new President Evo Morales has promised to nationalize the country’s oil fields, and has also shown tendencies to shy away from the Dollar. On December 30, 2005 Venezuela's central bank said it plans to approve the use of the Euro to service demand from foreign companies as well as to further distance the country from its dollar dealings.
If all oil producing countries switch to Euro the rest of the world would dump the Dollar causing it to drastically lose its value. To understand the seriousness of this let us look at China alone. China has an excess of $800 billion in its foreign exchange reserves and may increase to $1 trillion soon. China buys most of its oil from Saudi Arabia and trade between the two countries has exceeded $14 billion in late 2005. In 2006 China also entered into government-to-government deals with Saudi Arabia. Iran is also a major supplier. If China alone dumps the Dollar the American economy would suffer greatly. Now imagine what would happen if other countries, such as Japan, India, Pakistan, and Saudi Arabia and all the Organization of Islamic Conference (OIC) countries, would also dump the Dollar.
The IOB in itself cannot break the dollar. The long-term goal of the OIC is to ultimately convert the trading into the Islamic Gold Dinar. This of course would have greater implications if ultimately accomplished. Other countries including Norway are considering a new oil bourse to trade in Euro. The issue of currency selection for oil trading has been around for some years. However, when this issue is combined with the other events and the global alignment of nations, the issue must be considered as to its long-term implications. With over three-fifths of the world’s population within the SCO countries combined with the 200 million within Mercosur plus all the 57 countries of the OIC lining up to create a new nuclear-armed multi-polar world, we should take notice.
Whether the IOB will impact the dollar remains to be determined. The IOB may not open as scheduled and/or the IOB may not attract the trading as the Iranians anticipate. Certainly, the issues surrounding the potential sanctions on Iran may determine the near-term impact. However other factors such as the U.S. balance of trade will compound events on the IOB.
Economic Indicators to Consider
FULL REPORT:
http://americandaily.com/article/12589
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Structural Changes–Destruction Of The U.S. Dollar
By David J. Jonsson (03/25/2006), American Daily - Phoenix, Arizona
http://americandaily.com/article/12589
============================
Wake Up America - The Federal Reserve System
#1 http://www.apfn.net/audio/L003I060312114818-fed-reserve1.MP3 (5.16MB) 22Min 33 Sec
#2 http://www.apfn.net/audio/L004I060312121819-fed-reserve2.MP3 (5.97MB) 26Min 6 Sec
Fed (clip) http://www.apfn.net/audio/L003I060313182306-fed-clip.MP3 (1.22MB)
clip Randi Rhodes re: Why we went to war in Iraq!
audio: http://www.apfn.net/audio/RANDI-EURO-2-22-06.mp3
WHY WE WENT TO WAR WITH IRAQ....!!!
http://www.apfn.org/apfn/Iraq_reason.htm
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