World Petro War II

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Petro-Currency War II
by David Chibo
After World (Empire) War I Halford John Mackinder eloquently summarised his Heartland Theory in which the Geographical pivot of the world was described as:

"Who rules East Europe commands the Heartland;
who rules the Heartland commands the World-Island;
who rules the World-Island controls the world."

The world today is currently ruled culturally, militarily, geographically and, more importantly, financially by the American empire. This fact is masked by a compliant media who instead portray it as a benevolent, albeit misguided, superpower, labouring at its own expense to export democracy and free markets to the furthest reaches of the globe.

To debunk this myth we must return to the height of the Vietnam War when the cost of the war – paid for in gold-backed US dollars - depleted the US gold supply at Fort Knox and caused the US to technically default on it debts and stop the gold-backing of its dollar.
 
In hindsight this marked the turning point when the US Government fully transitioned from a civilian-led, but corporate influenced Government to a corporate-led, but civilian influenced, Government. From 1971 onwards the gap dividing public opinion and Government policy – known as the democratic deficit - steadily grew into a chasm and led to the “grass roots” Occupy Wall Street movement, whose main aim today is the constitutional ‘Separation of Corporation and State.’

The US Government’s economic sovereignty, and subsequently, foreign policy were effectively handed over to the privately owned Federal Reserve and its corporate banks. They through Henry Kissinger were able maintain a strong US economy and a strong US dollar - while extracting stupendous profits for themselves - through an ingenious petro-dollar recycling plan that required the world to purchase oil denominated in US dollars.

The US’s grand strategy then became to maintain its economic supremacy which depends entirely on a strong dollar and relies on its ability to force nations to make their energy acquisitions in US dollars and invest their petrodollars in US Treasuries and ultimately US banks. The US banks then use fractional reserve banking to earns around half a trillion dollars yearly while allowing the US to run up trillions in debt. If the dollar were not backed by black-gold, then central banks throughout the world would dump it overnight.
 
With the majority of the black-gold reserves that it needs to back its dollar sourced from the Middle East, the region’s wealth can only be recycled back into the US economy by controlling the entire Middle Eastern oil production to transaction chain. Thus, with US support, Anglo-Saxon oil conglomerates extract, refine, distribute and sell the world’s oil, strictly in US dollars on the two dollar denominated oil exchanges - New York's NYMEX and London's IPE - before depositing (recycling) the petro-dollars with the Federal Reserve who then distributes them to its members - the major US banks.

The Federal Reserve also shares these capital flows between the US “world banker,” and its mostly West European allies and Japan, the G7 “franchisees,” in return for their full diplomatic and at times military support in the petro-dollar recycling plan.  

Meanwhile the “mercenary” Israel always on call to do the US’s bidding, and acting as a convenient scapegoat with the “Jewish Lobby” conspiracy theory, is kept perpetually at war with its Arab neighbours, who are intent on liberating themselves from US imperialism. In return it is rewarded with $3 billion in foreign “aid” – 75% of which flows back into the US military industrial complex’s coffers and eventually US banks.

The first real threat to the US world banker’s petro-dollar recycling plan came in the form of the euro, which floated in 1999. At the time the leaders of “Old Europe” split the G7 “franchisees” by attempting to wrest control of the world’s capital flows for themselves. They convinced Saddam Hussein to dump the petro-dollar, which he foolishly did in November 2000, and adopt the petro-euro, in exchange for “Old Europe’s” diplomatic support at the UN Security Council. When the US realised that “Old Europe,” France and Germany, along with Russia and China, would veto its second resolution it bypassed the UNSC and illegally invaded Iraq anyway.

The so called “War on Terror” could be termed Petro-currency War I. It was effectively an offensive campaign launched to maintain the petro-dollar recycling plan, by blocking the petro-euro competitor, and securing US military bases, not only in the heart of Middle Eastern (energy reserves in Iraq, but along the proposed oil pipeline in Afghanistan that links Central Asia and the Caspian Sea to world markets.

The US however didn’t count on the valiant Iraqi resistance, which succeeded in militarily and politically resisting the US and its Western occupiers and strategically defeating them and forcing most of them to leave at the end of 2011, without securing their coveted long-term military bases. Meanwhile the Afghanis are also bravely resisting their occupation and are similarly on the verge of driving out the US earlier than was expected without having secured the path for a future oil pipeline.

In Africa, Muammar Gaddafi tried to find a middle path by giving up his WMDs and adopting the petro-dollar and even allowing the West’s rendition and torture of the “War on Terror” POWs to be outsourced to Libya’s intelligence services. But when he foolishly decided to quit selling Libyan oil in US dollars — demanding payment instead in gold-backed “dinars” – and sought to establish an African bank, he had inadvertently crossed Washington's "red line." Riding on the coat-tails of the Arab Spring a Western supported civil war was manufactured and the friendless leader was murdered by US drone strike and US supported mercenaries after China and Russia abstained at the UN Security Council.
    
However, rather than having toppled Iran, the US has instead strengthened the nation that has come to economically defy it by opening its own oil bourse - trading in non dollar currencies - in 2008. And with the US now being forced to strategically retreat from the Middle East, many regional analysts believe, it was Tehran, not Washington, that "won" the war in Iraq.

Iran is regionally allied with Syria, Hezbollah and Hamas who all openly, and proudly, continue to resist Israeli illegal colonisation and the US imperial petro-dollar recycling plan. They have strategically allied with Russia and China, members of the group of nations designated the BRICS – Brazil, Russia, India, China and South Africa – who after the 2008 financial crisis have emerged as regional powers eager to assert their independence from Washington.
 
Regional autonomy is also becoming contagious for Washington and in addition to Russia, India and China other nations such as Turkey and Japan has joined together to buy oil from Iran with their own domestic currencies — but not with the petro-dollar.

Brazil does not recognize unilateral sanctions imposed on Iran, whether by the US or EU and one May 17, 2010, Brazil, Iran and Turkey issued the "Tehran Nuclear Declaration", a joint declaration "in which Iran agreed to send low-enriched uranium to Turkey in return for enriched fuel for a research reactor." With its nuclear charade fully exposed the US and its proxy, Israel, were of course quick to scuttle the proposal.

A low level war has however already begun. In Iran numerous scientists - some not connected to nuclear or military work - have been assassinated by Mossad, with US blessing. Multiple bombings in Khorramabad, Isfahan, close to sensitive nuclear facilities and at a military base killed the architect of the Iran's missile programme along with 16 more of its elite revolutionary guards. Stuxnet, a computer worm believed to have been designed to sabotage Iran's enrichment of uranium was used by the US to damage many of the country's centrifuges last year. In addition repeated and illegal violations of Iranian air space culminated in the Iranian capture of an advanced US stealth drone.

The US is becoming desperate in Syria, as it did in Libya, it has hijacked the peaceful Arab Spring revolution that swept the country and armed former Al Qaeda members along with Western mercenaries and spies that lead covert attacks against Syrian security forces – 2,000 of which have died at the hands of the US insurgents.

Russia however has taken the firmest stand against any military attack on Iran and Syria. It has upgraded its radar station at Tartus to aid Iran against a possible Israeli attack. It did this while boosting its arm sales to Syria and sending a small Russian flotilla led by the Moscow's only aircraft-carrying cruiser - the Admiral Kuznetsov - to its Mediterranean naval base to monitor the Israeli and US preparations for a possible attack. Syria’s refusal – under instructions from Moscow – to allow a gas pipeline through Syrian territory from Qatar to supply Europe is another move designed to scuttle the petro-dollar and reaffirm their alliance.

Russia and China also teamed up at the UN Security Council to veto a resolution - mirroring the one that was used to replace the Gaddafi regime – that would’ve effectively authorised regime change in Syria.

They are not alone. Recent media reports suggest that India has not only ignored the Western imposed sanctions but in addition it agreed to pay the price of crude oil it imports from Iran in gold. And recently India has proposed setting up a multilateral bank that would be exclusively funded by developing nations and finance projects in those countries.
   
While the compliant media promotes a good US superpower, bad Israeli regional power routine against Iran, for public consumption, the rest of the world knows that the US military controls Israel’s Air Defense system, which is integrated into the US global missile defense system. Therefore any illegal attack against Iran will not only be at US decree, but with US involvement.

It is in fact around the petro-dollar recycling plan that the main issues afflicting the world today coalesce. In addition to a decade of US military misadventures, by backing their dollar by black gold it becomes in the US’s interest to consume more fossil fuels which will increase the US money supply – indirectly lead to inflation that is exported to its trading partners. This consumption which is in the interests of both Big Finance and Big Oil is also directly responsible for Climate Change and is causing extensive environmental damage to our planet. This control of the world’s capital flows also led to the Global Financial Crisis in which cheap and abundant finance was used to fuel the housing bubble that burst in 2008.

But it is not too late to change course. A fact noted by Republican 2012 Presidential candidate, Ron Paul, who’s policies of “Ending the Federal Reserve” and “Cutting overseas military adventures,” are a direct threat to the US financial and military industrial complex who have closed ranks to marginalise his policies and candidacy in the media, while denying him corporate campaign financing.

Though Petro-currency War I was about the US unilaterally blocking some of its “franchisees” in the G7 from competing with their own regional petro-currency and wresting control of the world economy, Petro-currency War II will be a war in which the US “banker” and its G7 “franchisees” attempt to block the rise of the regional BRICS’ petro-currencies. Both are essentially economic wars designed to prevent a US economic “bank run” that would destroy the US economy and its control of the world economy.

In a globalised, interconnected financial world Mackinder’s theory is now out-dated. In its place the Economic Pivot of Modern History can be summarised below:

"Who commands the central banking system commands foreign policy"
who commands foreign policy controls the petro-currency"
who controls the petro-currency controls the world economy."

 
 
 
David Chibo is an Australian-born Iraqi from the Assyrian-Christian community. He spent six months prior to the Iraq invasion working in northern Iraq with local aid groups delivering humanitarian relief as well as providing technical training to the local population.

He is also a Melbourne-based freelance journalist for the online Assyrian magazine Zinda and a frequent writer on Orientalism.

  

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