August 1, 2007
Michael has asked me to post this comment here and I oblige:
Gordon Brown on his recent visit to the USA to pay homage to Bush said that Britain and the USA has shared values. He is correct of course, unfortunately, Britain is very much tied to the failure or success of the USA, Blair made that choice when he involved Britain in the illegal invasion of Iraq instead of moving closer to both Germany and France which had the good sense to oppose it and not to get involved. The Poodle of course is still happily wagging his tail, Bush managed to get him a highly paid job masquerading as a “Peace Envoy” for the Middle East.
But let’s not fool ourselves, there’s a war raging right now but I’m not referring to either Iraq or Afghanistan, although both are a direct consequence of the real battle that is taking place and the reason British soldiers are dying. The war I’m referring to is the attempted preservation of the United States dollar as the world’s reserve currency, which the USA hoped, would be used for all oil transactions. At one time every country that purchased oil from OPEC had to pay in U.S. dollars.
This enormously increased the demand for the floating dollar. Oil importing countries were faced with the problem of how to earn or borrow dollars to pay for their oil. OPEC oil countries were soon overflowing with oil dollars. Most of these oil dollars ended up in accounts in London and New York banks, but that’s changing.
It’s a battle, which in reality is already lost, the first shots actually came from that “Arch Villain” Saddam Hussian, an act which eventually led to his own death, because in November 2000 he exchanged $10 billion dollars to Euros and also started selling oil in Euros.
It is no coincidence of course that a new “Arch Villain” in our lives, Mahmoud Ahmadinejad of Iran, has declared that he will accept payment for oil in any currency. It’s no coincidence that Russia is also slowly being added to the “ Axis of Evil” and that China will surely follow. China currently holds over $1 trillion as a part of their reserves but have indicated that they are going to move some of that and also reduce their monthly investment of US$ back into the US economy. It’s not a coincidence that over a year ago the US Treasury stopped issuing a report (M3) concerning money supply, because the bottom line is that the US$ is slowly becoming a currency backed by not gold or oil, but printing presses.
Since 2003 the US$ has fallen by 23% against the Euro and has fallen against all other major currencies, not surprising at all when you consider the fact that the USA is haemorrhaging money to the tune of $60 billion a month in regards to their trade deficit. A deficit that refuses to improve despite the fact that in theory US exports should be cheaper. But how much is it being affected by the fact that the USA has become the most distrusted nation in the word and that’s not just my view but also the results of many opinion polls. Investment of surplus dollars by countries such as China, Russia and the OPEC countries is falling sharply and is hardly surprising, it’s a little like asking someone to invest with a 3% interest return with 8% account charges,
The future seems uncertain in regards to the real war, which is taking place, not in relation to who the eventual victor will be, but in regards to how desperate the USA will become, and what final throws of the dice will take place.
Yes of course we have “shared values” which include bringing death and destruction all over the world simply for economic reasons, although I have to say it’s a shame those shared values didn’t end in 1776 when a group of terrorist insurgents declared independence.