Why are we going to attack Iran? Same reason we attacked Iraq.

Folks, we might have to change our "No blood for oil" signs to "No blood for dollars." Dollars as opposed to euros, that is.

Right now, oil is traded in dollars. That's great for us--when we run out, we just print more. But everyone else actually has to have dollars to buy oil. If they don't have enough through trade, they have to borrow...and pay interest...in dollars...creating a worldwide demand for...dollars!

When Iraq began trading oil for euros, we attacked. Iran is planning to start a euro-based oil exchange in, I believe, June.

Here's an excerpt from an article which lays the whole thing out:
http://www.informationclearinghouse.info/article9936.htm

"One of the major unstated reasons the United States invaded Iraq was to stop Saddam Hussein from trading oil for euros, which he had begun in 2000. Hussein actually made more money selling oil for euros, as the euro appreciated 17 percent against the dollar between 2000 and 2003. Other countries in the region, particulary Iran and Syria, began public musing about switching from dollars to euros around the same time.

All three countries were subject to a barrage of threats from the United States government, but only Iraq went through with the switch, and it was summarily invaded. One of the US government's first acts in Iraq was to switch oil sales back to dollars.

Now, Iran plans not just to sell oil for euros, but to create an exchange market for parties to trade oil for euros. The oil bourse will provide a euro-based price standard, the way West Texas Intermediate crude (WTI) and North Sea Brent crude do today. To the extent that the balance of reserve holdings starts to shift from dollars to euros, that's very bad news for America's system of dollar hegemony."

Iran, China and Russia have signed a mutual defense alliance. I haven't seen reports of that in other places, but somehow I think attacking Iran is going to be something that is threatened but is not done. Otherwise.....

The Chimp is a bully. He won't pick on someone he doesn't think he can have others beat up easily...of course Iraq has been something of a problem since he's lost that fight, but that's another story.

According to an Iranian friend of mine, both China and Russia have long-standing cultural ties with Iran. More importantly, perhaps, they both have an economic interest in seeing oil traded in Euros:

"The Chinese and the Japanese will be especially eager to adopt the new exchange, because it will allow them to drastically lower their enormous dollar reserves and diversify with Euros, thus protecting themselves against the depreciation of the dollar. One portion of their dollars they will still want to hold onto; a second portion of their dollar holdings they may decide to dump outright; a third portion of their dollars they will decide to use up for future payments without replenishing those dollar holdings, but building up instead their euro reserves.

· The Russians have inherent economic interest in adopting the Euro – the bulk of their trade is with European countries, with oil-exporting countries, with China, and with Japan. Adoption of the Euro will immediately take care of the first two blocs, and will over time facilitate trade with China and Japan. Also, the Russians seemingly detest holding depreciating dollars, for they have recently found a new religion with gold. Russians have also revived their nationalism, and if embracing the Euro will stab the Americans, they will gladly do it and smugly watch the Americans bleed."

http://www.energybulletin.net/12125.html

This same article lays out some potential results for the U.S:

"Whatever the strategic choice, from a purely economic point of view, should the Iranian Oil Bourse gain momentum, it will be eagerly embraced by major economic powers and will precipitate the demise of the dollar. The collapsing dollar will dramatically accelerate U.S. inflation and will pressure upward U.S. long-term interest rates. At this point, the Fed will find itself between Scylla and Charybdis—between deflation and hyperinflation—it will be forced fast either to take its “classical medicine” by deflating, whereby it raises interest rates, thus inducing a major economic depression, a collapse in real estate, and an implosion in bond, stock, and derivative markets, with a total financial collapse, or alternatively, to take the Weimar way out by inflating, whereby it pegs the long-bond yield, raises the Helicopters and drowns the financial system in liquidity, bailing out numerous LTCMs and hyperinflating the economy."


The real question is, will Bush act like a cornered animal and attack despite the mutual defense alliance? He just might.

Iraq had planned to start selling oil via the euro, instead of the US greenback. The US couldn't allow this to happen, so Bu$h unable or unwilling to diplomatically change Saddam's mind about selling oil via euros attacked Iraq.

Well now it's Iran's turn, Iran had planed to start selling it's oil via euros back in March 2006. But for some reason, changed it's mind and decided to wait until June 2006.

Perhaps the were waiting until the calendar turned to 6-6-6 before making the leap, but either way the US will not allow any country to change the sell of oil from greenbacks.

Ever since we went into Iraq, it's been said we went there for the oil. And that's partly true, it was for the currency for witch all oil is traded the american greenback.

with a post of yours a day or so ago.

Our currency used to be backed by gold. Now its backed by oil. But if oil can be traded in euros, then dollars aren't really backed by anything. Sounds like the Weimar Republic to me.

Happy to hear someone picked up on the oil for greenback connection, i have been posting that connection but didn't think anyone was paying attention.

I had the best story on the connection, but my computer crashed a couple of weeks ago and i lost all my material. I'll see if i can't retrieve it and send it your way, if you're interested?

If you find it, I'd love to see it. I'm pretty new to DU, so I missed it.

Euro's up to $1.24 this AM; up a nickle in the last few weeks.