The Fall of the American Economic Empire

Please excuse the over simplification of the money markets that i’m about to talk about, i’m not an economist.

In June 2003, Iraq, under U.S guidance started trading Oil in U.S Dollars again. Which certainly gives credit to the idea that The Bush Administration, with it’s ties to the Oil business and it’s incessant need to expand it’s supply; invaded Iraq for two reasons Firstly, because they needed to increase supply. And secondly, to revert back to trading in U.S Dollars, something Sadam Hussain put a stop to back in 2000. And although I despise the Bush Administration, and it’s horribly reclusive policies, i’m a little sceptical when my fellow lefties try to find even the slightest shred of evidence that could be used by the Bush Administration as a pretext for war for oil. I just don’t buy it.

As far as i’m aware Iran doesn’t trade Oil in dollars. Hasn’t for a couple of years. And surely if America were so committed to being the dominant force in Global finance, economists must have noticed that promoting Democracy and Capitalism across the Globe, would not help that cause, and in fact, would lead to the growth of foreign currencies that inevitably challenge the dominance of the Dollar?
The Oil Bourse in Iran opened in 2007, trading oil in Euros and not Dollars, with no interference to try to prevent it from the U.S. Surely if they cared that much, something would have been done? And since then, transactions in Euros (among others) on the IOB have been worth well over $1.5bn. Surely the U.S would have intervened if it were THAT concerned? Obviously not militarily, given that the public wouldn’t support it after the debacle surrounding Iraq, and troops are already preoccupied with Iraq and Afghanistan, but even covertly, nothing has been done. Which to me suggests that although the Johnson/Nixon Administrations with the help of Kissinger may have needed the trade deals between the U.S and Persian Gulf States to boost America’s economic standing in the World during the late 60s and 70s, it’s not as important now as it was back then, because no matter how much the US now tries to sustain it’s economic dominance, inevitably it isn’t going to last all that much longer. Especially given that the the Dollar isn’t considered as “risk free” as it has been for decades.

The Euro was created to almost counter the dominance of the Dollar. So why hasn’t the EU been the target of U.S aggression? Given that most countries (Russia has decreased it’s Dollar reserves recently) now have a split reserve, between Dollar and Euro, that isn’t a good sign for the almighty Dollar, and in the long run, is hugely damaging, much more so than Iran’s IOB. And much more so than Sadam and his decision to stop trading in Dollars.

Also, Russia, Saudi Arabia (after refusing to cut interest rates in line with the U.S back in 2007), South Korea (who shifted investment from US currency to other currency in 2005 and fears that it may sell $1bn US Bonds in the not too distant future), China, Sudan (who suggested dumping the Dollar as far back as 1997) and Venezuela are considering doing the same as Iran at the moment.

Surely the more aggressive the U.S is with the World, the less likely other Nations are to feel happy about trading in Dollars? Aggression caused by the U.S need to prevent any challenge to it’s economic Empire is only going to isolate the U.S further.

I can understand the point on Iraq, given that Iraq mysteriously started trying Oil in Dollars again after the invasion, so yes, that was definitely a motive perhaps because the Republicans at the time thought ruling the World through fear was the only way to stay on top of the World. But Iran’s move to open the IOB was a far greater kick in the teeth to America, than Sadam was, and Iran haven’t been the target of such a mass invasion or even threat of invasion. Certainly the Bush Administration had harsh words for Tehran But no more so than Tehran has for Tel Aviv and their allies.

I think Iraq went a lot deeper. Crap intelligence (the U.S is good at that) and personal vendetta. If America were committed to sustaining it’s dominance economically across the Globe, invading one nation because they stopped trading oil in dollars, is pretty insignificant given that there’s half a World willing to do the same in the not too distant future. Iraq wasn’t just about oil.

If devalue of the Dollar were considered enough reason to go to war, then in the next twenty – thirty years, the U.S is going to have to commit to taking on pretty much the entire World, (either that, or creating a brand new common currency with Russia and China) because as the Euro will inevitably start to pick up pace, and nations start to shrink their Dollar reserves even more, and corporations then start to sell their dollar short for financial gain; Iran selling it’s oil in another currency will seem like nothing in comparison.

The problem I foresee for President Obama and President Bush, is that Republicans and Democrats will start to find reasons to blame them both respectively, when America starts losing it’s economic dominance, even though, it’s merely a case of Economic Evolution.

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