Several decades back, the U.S. and Saudi Arabia worked out a deal that said that all oil transactions would be conducted exclusively in US$. This effectively tied the world’s petroleum purchases to the value of the dollar, meaning that it’s in all countries’ best interest for the value of our dollar to be as high as possible. The higher the US$, the less everyone’s oil costs.
If you hadn’t heard, Iran recently declared that they would no longer conduct OPEC business in US dollars. So what, right? Fuck ’em, we don’t need ’em.
Wrong.
The last country to stop conducting business in dollars was Iraq, just prior to the 1991 U.S.-led invasion. The invasion of Kuwait would have been a mere historical footnote, utterly ignored by the United States, if not for this. The reasons for the original invasion were merely a pretext for a much more important (U.S.) economic reason–we couldn’t afford to have our currency devalued. How many countries were invaded before and after, and we didn’t lift a finger? The war was sold for two reasons–oil and the primacy of the dollar.
I’m not the only one who thinks so. So does John McCain.
By removing themselves from the dollar, Iran has deliberately and disastrously provoked the Bush administration. According to this article–which unfortunately sites no reliable sources–a covert offensive against Iran “unprecented in its scope” has already been approved. We’re going to war with Iran.
I hope I’m wrong on this, I really do–but we know our government doesn’t listen to us. The Bush administration invaded Iraq despite the world’s largest protest. What hope do we have? People like John Conyers, threatened to impeach Bush if he invades Iran. Whoopty fuck–once the damage is done, then you’re willing to do something? How about now? How about now, when it might actually fucking matter?!
Update: I just found this article, though it was written a few days before this post. The last two paragraphs nicely sum up my point, albeit with less profanity:
It is some economic analyst’s belief that Saddam Hussein’s decision to switch from accepting the dollar to accepting the euro in 2000 was one of the significant developments that transformed opinions in Washington such as Vice President Dick Cheney’s into believing that regime change in Iraq was necessary to protect American interests.
Some American economists fear that by Iran dumping the dollar it could lessen the need for other countries around the world to hold onto their large reserves of United States Federal Reserve notes. This would likely result in the further plunging of the dollar as well as the continuing climb of fuel prices.