Oil, money, war and geopolitics

some articles of interest with URLs as Iran and other countries are
about to switch from petrodollars to petroeuros:



End of the Petro-dollar? (Excerpt)
by William Norman Grigg
March 6, 2006

Is Tehran about to deploy an economic weapon potentially more deadly
than a nuclear bomb?

If Iran is years away from developing a nuclear weapon, why is
Washington girding for war within a matter of months, or weeks? Some
economic analysts believe that the real weapon of mass destruction
Tehran is preparing to deploy is not a nuclear bomb, but rather the
proposed Iranian Oil Bourse (IOB), which is scheduled to open in
March.

The IOB, writes Dr. Krassimir Petrov of the American University in
Bulgaria, will be a petroleum commodity market "based on a euro-oil-
trading mechanism that naturally implies payment for oil in euro,"
rather than in dollars. This would constitute a direct challenge to
the "petro-dollar" economy that has existed since the mid-1970s.

In 1971, notes Dr. Petrov, the Nixon administration severed the last
remaining link between the dollar and gold. From that point, "the
United States had to force the world to continue to accept ever-
depreciating dollars in exchange for economic goods and to have the
world hold more and more of those depreciating dollars. It had to
give the world an economic reason to hold them, and that reason was
oil." The link between the dollar and oil, Petrov asserts, resulted
from "an iron-clad arrangement with Saudi Arabia to support the
House of Saud in exchange for accepting only US Dollars for its oil."

F. William Engdahl, author of A Century of War: Anglo-American
Politics and the New World Order, describes the U.S.-Saudi pact in
detail:

By their firm agreement with Saudi Arabia, as the largest OPEC oil
producer,... Washington guaranteed that the world's largest
commodity, oil, essential for every nation's economy, the basis of
all transport and much of the industrial economy,... could only be
purchased in world markets in dollars. The deal [was] fixed in June
1974 by Secretary of State Henry Kissinger, establishing the US-
Saudi Arabian Joint Commission on Economic Cooperation. The US
Treasury and the New York Federal Reserve would "allow" the Saudi
central bank, SAMA, to buy US Treasury bonds with Saudi
petrodollars. In 1975, OPEC officially agreed to sell its oil only
for dollars. A secret US military agreement to arm Saudi Arabia was
the quid pro quo.

"The economic essence of this arrangement," points out Dr.
Petrov, "was that the dollar was now backed by oil." The emergence
of an alternative petroleum market setting the price in a different
currency, such as the euro, would cause a rapid flight from the
greenback. Should the IOB go into operation, Petrov predicts, "it
will eagerly be embraced by major economic powers and will
precipitate the demise of the dollar."

Petrov, Engdahl, and other analysts point out that in 2000, Saddam
Hussein began to demand euros, rather than dollars, for his oil
exports; once Saddam was deposed, Iraq's oil exports were once again
sold in dollars. This illustrates that the war in Iraq "was not
about Saddam's nuclear capabilities, about defending human rights,
about spreading democracy or even about seizing oil fields; it was
about defending the dollar," Petrov concludes.

Other analysts aren't entirely convinced.

found at
http://www.thenewamerican.com/artman/publish/article_3372.shtml

____

Iran/Venezuela Declares Economic War On US
Contributed by: Diogenes

It might be in Canada's interest to be up on this

Iran/Venezuela Declares
Economic War On US

By Ed Haas
Muckraker Report
2-17-6

During a recent visit to Caracas, Venezuela, Iranian parliamentary
speaker Gholam Ali Hadad Adel said U.S. opposition to Iran's nuclear
program was "only a pretext." "They are worried that we want to be
independent," Hadad Adel said through an interpreter.[1] Adel was
kind to use the word "pretext". A more direct statement by Adel
would have been to say that U.S. opposition to Iran's nuclear
program is more of the same hardliner propaganda coming out of the
Bush Administration, meant to drum up public support for additional
Bush Administration sponsored, pre-emptive strikes against nations
that dare to abandon the U.S. dollar in favor of the euro or any
other foreign currency.

Why else would Adel say that the U.S. opposition to Iran's nuclear
program was "only a pretext" if he didn't possess full knowledge of
what he believed to be the real reason why the Bush Administration
and its supporters in the U.S. Congress have suddenly gotten
themselves all hot and bothered over a nuclear program that has been
in play for decades and is by many accounts, at least ten more years
away from being able to produce even a single nuclear weapon? What
did Adel mean when he said that "they are worried that we want to be
independent" when Iran is already an independent country? No foreign
army is presently occupying Iran. It holds elections. In 2000, the
U.S. applauded when the Iranian people elected reformists to the
Iranian Parliament. In 2004, the Bush Administration, the spread
democracy by spraying bullets administration, frowned when those
same Iranian voters elected the resurgent conservatives into power
once again. The point here is that Iran is already independent by
all accounts, so what did Adel mean when he said that the Bush
Administration and its NEO-CON supporters are worried that Iran
wants to be independent?

When mining alternative media sources (the mainstream media in the
United States is not and will not report this information) to catch
a glimpse of what Iran is attempting to become independent of, the
only plausible explanation to be uncovered suggests that Iran wants
to become independent of the U.S. dollar. It is of great importance
to understand that only those countries that are adversarial to the
U.S. dollar have earned the scorn of Bush's Global, Big Brother
Machine.

Iraq stopped using U.S. dollars in 2000 under the U.N. monitored Oil
for Food Program. Two months after the U.S. invaded Iraq, all
purchases of Iraqi oil were returned to petrodollars once again.
Venezuela President Hugo Chavez, who is considered a dangerous
adversary by the Bush Administration, has declared war on the U.S.
dollar. In October 2005, Chavez announced that Venezuela was ready
to move the county's foreign-exchange holdings out of the dollar and
into the euro.[2]

Now Iran and Venezuela have joined together to gain independence
from the U.S. Dollar. Chavez supports the opening of the Iran Oil
Bourse on March 20, 2006. The Iran Oil Bourse will challenge U.S.
dollar supremacy in global oil market transactions executed on the
New York Mercantile Exchange and London's International Petroleum
Exchange by creating the opportunity for countries to shift foreign-
exchange holdings out of dollars and into euros or other currencies.

http://www.teamliberty.net/id223.html


found at http://www.vivelecanada.ca/article.php/2006021720431382

_____

Petrodollars and Nuclear Weapons Proliferation: Understanding the
Planned Assault on Iran

By Michael Keefer
February 10, 2006
From... GlobalResearch.caIran has been in the gun-sights of George
W. Bush and his entourage from the moment that he was parachuted
into the presidency in November 2000 by his father's Supreme Court.

A year ago there were signs, duly reported by Seymour Hersh and
others, that the United States and Israel were working out the
targeting details of an aerial attack on Iran that it was
anticipated would occur in June 2005 (see Hersh, Gush Shalom,
Jensen). But as Michel Chossudovsky wrote in May 2005, widespread
reports that George W. Bush had "signed off on" an attack on Iran
did not signify that the attack would necessarily occur during the
summer of 2005: what the `signing off' suggested was rather "that
the US and Israel [were] `in a state of readiness' and [were]
prepared to launch an attack by June or at a later date. In other
words, the decision to launch the attack [had] not been made"
(Chossudovsky: May 2005).

Since December 2005, however, there have been much firmer
indications both that the planned attack will go ahead in late March
2006, and also that the Cheney-Bush administration intends it to
involve the use of nuclear weapons.

It is important to understand the nature and scale of the war crimes
that are being planned—and no less important to recognize that, as
in the case of the Bush regime's assault on Iraq, the pretexts being
advanced to legitimize this intended aggression are entirely
fraudulent. Unless the lurid fantasies of people like former
Undersecretary for Arms Control and International Security and now
Ambassador to the United Nations John Bolton count as evidence—and
Bolton's pronouncements on the weaponry supposedly possessed by
Iraq, North Korea, Cuba and Venezuela show him to be less acquainted
with truth than Jean Harlow was with chastity—there is no evidence
that Iran has or has ever had any nuclear weapons development
program. Claims to the contrary, however loudly they may have been
trumpeted by Fox News, CNN, or The New York Times, are demonstrably
false.

Nor does there appear to be the remotest possibility, whatever
desperate measures the Iranian government might be frightened into
by American and Israeli threats of pre-emptive attacks, that Iran
would be able to produce nuclear weapons in the near future. On
August 2, 2005, The Washington Post reported that according to the
most recent National Intelligence Estimate (NIE), which represents a
consensus arrived at among U.S. intelligence agencies, "Iran is
about a decade away from manufacturing the key ingredient for a
nuclear weapon, roughly doubling the previous estimate of five
years" (Linzer, quoted by Clark, 28 Jan. 2006).

The coming attack on Iran has nothing whatsoever to do with concerns
about the proliferation of nuclear weapons. Its primary motive, as
oil analyst William Clark has argued, is rather a determination to
ensure that the U.S. dollar remains the sole world currency for oil
trading. Iran plans in March 2006 to open a Teheran Oil Bourse in
which all trading will be carried out in Euros. This poses a direct
threat to the status of the U.S. dollar as the principal world
reserve currency—and hence also to a trading system in which massive
U.S. trade deficits are paid for with paper money whose accepted
value resides, as Krassimir Petrov notes, in its being the currency
in which international oil trades are denominated. (U.S. dollars are
effectively exchangeable for oil in somewhat the same way that,
prior to 1971, they were at least in theory exchangeable for gold.)

But not only is this planned aggression unconnected to any actual
concern over Iranian nuclear weapons. There is in fact some reason
to think that the preparations for it have involved deliberate
violations by the Bush neo-conservatives of anti-proliferation
protocols (and also, necessarily, of U.S. law), and that their long-
term planning, in which Turkey's consent to the aggression is a
necessary part, has involved a deliberate transfer of nuclear
weapons technology to Turkey as a part of the pay-off.

Prior to her public exposure by Karl Rove, Lewis `Scooter' Libby,
and other senior administration officials in July 2003, CIA agent
Valerie Plame was reportedly involved in undercover anti-
proliferation work focused on transfers of nuclear technology to
Turkey that were being carried out by a network of crooked
businessmen, arms dealers, and `rogue' officials within the U.S.
government. The leaking of Plame's identity as a CIA agent was
undoubtedly an act of revenge for her husband Joseph Wilson's public
revelation that one of the key claims used to legitimize the
invasion of Iraq, Saddam Hussein's supposed acquisition of uranium
ore from Niger, was known by the Bush regime to be groundless. But
Plame's exposure also conveniently put an end to her investigative
work. Some of the senior administration officials responsible for
that crime of state have long-term diplomatic and military
connections to Turkey, and all of them have been employed in what
might be called (with a nod to ex-White House speechwriter David
Frum) the Cheney-Bolton Axis of Aggression. Thanks to the courage
and integrity of former FBI translator Sibel Edmonds, there is
evidence dating from 2002 of high-level involvement in the
subversion of FBI investigations into arms trafficking with Turkey.
The leaking of Valerie Plame's identity as a CIA agent may therefore
have been not merely an act of revenge for her husband's
contribution to the delegitimizing of one war of aggression, but
also a tactical maneuver in preparation for the next one.

George W. Bush made clear his aggressive intentions in relation to
Iran in his 2002 State of the Union address; and his regime's record
on issues of nuclear proliferation has been, to put it mildly,
equivocal. If, as seems plausible, Bush's diplomats had been
secretly arranging that Turkey's reward for connivance in an attack
on Iran should include its future admission into the charmed circle
of nuclear powers, then the meddling interference of servants of the
state who, like Plame and Edmonds, were putting themselves or at
least their careers at risk in the cause of preventing nuclear
weapons proliferation, was not to be tolerated.

The ironies are glaring. The U.S. government is contemplating an
unprovoked attack upon Iran that will involve "pre-emptive" use of
nuclear weapons against a non-nuclear-weapons-holding state.
Although the pretext is that this is necessary to forestall nuclear
weapons proliferation, there is evidence to suggest that planning
for the attack has involved, very precisely, nuclear weapons
proliferation by the United States.

It would appear that this sinister complex of criminality involves
one further twist. There have been indications that the planned
attack may be immediately preceded (and of course `legitimized') by
another 9/11-type event within the U.S.

Let us review these issues in sequence.

Plans for a conventional and `tactical' nuclear attack on Iran

On August 1, 2005 Philip Giraldi, an ex-CIA agent and associate of
Vincent Cannistraro (the former head of the CIA's counter-
intelligence operations and former intelligence director at the
National Security Council), published an article entitled "Deep
Background" in The American Conservative. The first section of this
article carried the following headline: "In Washington it is hardly
a secret that the same people in and around the administration who
brought you Iraq are preparing to do the same for Iran." I quote the
first section of Giraldi's article in its entirety:

"The Pentagon, acting under instructions from Vice President Dick
Cheney's office, has tasked the United States Strategic Command
(STRATCOM) with drawing up a contingency plan to be employed in
response to another 9/11-type terrorist attack on the United States.
The plan includes a large-scale air assault on Iran employing both
conventional and tactical nuclear weapons. Within Iran there are
more than 450 major strategic targets, including numerous suspected
nuclear-weapons-program development sites. Many of the targets are
hardened or are deep underground and could not be taken out by
conventional weapons, hence the nuclear option. As in the case of
Iraq, the response is not conditional on Iran actually being
involved in the act of terrorism directed against the United States.
Several senior Air Force officers involved in the planning are
reportedly appalled at the implications of what they are doing—that
Iran is being set up for an unprovoked nuclear attack—but no one is
prepared to damage his career by posing any objections."

The implications of this report are breathtaking. First, it
indicates on the part of the ruling Cheney faction within the
American state a frank in-house acknowledgment that their often-
repeated public claims of a connection between Saddam Hussein's
regime and the 9/11 attacks are the rubbish that informed people
have long known them to be.

At a deeper level, it implies that "9/11-type terrorist attacks" are
recognized in Cheney's office and the Pentagon as appropriate means
of legitimizing wars of aggression against any country selected for
that treatment by the regime and its corporate propaganda-
amplification system. (Though the implicit acknowledgment is
shocking, the fact itself should come as no surprise, since recent
research has shown that the Bush administration was deeply
implicated not merely in permitting the attacks of September 11,
2001 to happen, but in actually organizing them: see Chossudovsky
2002: 51-63, 144-56; Chossudovsky 2005: 51-62, 135-46, 237-61;
Griffin 2004: 127-46, 169-201; Griffin 2005: 115-35, 277-91; Marrs
134-37; and Ruppert 309-436.)

And finally, Giraldi's report suggests that the recent U.S.
development of comparatively low-yield nuclear weapons specifically
designed to destroy hardened underground facilities, and the recent
re-orientation of U.S. nuclear policy to include first-strike or pre-
emptive nuclear attacks on non-nuclear powers, were both part of
long-range planning for a war on Iran.

Articles published by William Arkin in the Washington Post in May
and October 2005 reported on what the U.S. military's STRATCOM calls
CONPLAN 8022, a global plan for bombing and missile attacks
involving "a nuclear option" anywhere in the world that was tested
in an exercise that began on November 1, 2005; the scenario for this
exercise scripted a dirty-bomb attack on Mobile, Alabama to which
STRATCOM responded with nuclear and conventional strikes on an
unnamed east-Asian country that was transparently meant for North
Korea.

Jorge Hirsch has outlined the deployment of key administrative
personnel and of ideological legitimations in preparation for a
nuclear attack on Iran (Hirsch, 16 Dec. 2005). And Michel
Chossudovsky has described the command structure that has been set
up to implement STRATCOM's current plans for preemptive `theatre'
nuclear warfare (see Chossudovsky 2006). But it must be emphasized
that these plans, as tested in November 2005 in the exercise
referred to by Arkin, involve the creation of an impression of what
theorists of nuclear war call "proportionality." An attack on Iran,
which would presumably involve the use of significant numbers of
extremely `dirty' earth-penetrating nuclear bombs, might well be
made to follow a dirty-bomb attack on the United States, which would
be represented in the media as having been carried out by Iranian
agents.

Yet as Giraldi indicates, although the bombing of Iran would follow
and be represented as a response to "another 9/11-type terrorist
attack on the United States," the planned pattern involves a cynical
separation of appearance from reality: "the response is not
conditional on Iran actually being involved in [this] act of
terrorism…."

Earth-Penetrator `dirty bombs

Talk about "low-yield" nuclear weapons, by the way, means simply
that the most recent U.S. nuclear weapons can be set to detonate
with much less than their maximum explosive force. The maximum power
of the B61-11 earth-penetrating "bunker-buster" bomb ranges, by
different accounts, from 300 to 340 or 400 kilotons (see Nelson;
Hirsch, 9 Jan. 2006). (By way of comparison, the bomb dropped on
Hiroshima in August, 1945, killing some 80,000 people outright, and
a further 60,000 over the next several months due to radiation
poisoning and other injuries, had a yield of 15 kilotons.) The
lowest-yield setting of the BL61-11 is reportedly 0.3 kilotons—
equivalent, that is to say, to the detonation of 300 tons of TNT.

But since these new weapons are designed as earth-
penetrating "bunker-buster" rather than air-burst bombs, each one
can be expected to produce large volumes of very `dirty' radioactive
fallout. Robert Nelson of the Federation of American Scientists
writes that even at the low end of the B61-11 bomb's yield
range, "the nuclear blast will simply blow out a huge crater of
radioactive material, creating a lethal gamma-radiation field over a
large area." The very intense local fallout will include
both "radioactivity from the fission products" and also "large
amounts of dirt and debris [that] has been exposed to the intense
neutron flux from the nuclear detonation"; the blast cloud produced
by such a bomb "typically consists of a narrow column and a broad
base surge of air filled with radioactive dust which expands to a
radius of over a mile for a 5 kiloton explosion."

Yet wouldn't the "tactical" and "low-yield" nature of these weapons
mean that civilian casualties could be kept to a minimum? A study
published in 2005 by the National Research Council on the Effects of
Nuclear Earth-Penetrator and Other Weapons offers estimates of the
casualties that could be caused by these weapons. According to
Conclusion 6 of this report, an attack in or near a densely
populated urban area could be expected, depending on the B61-11's
yield setting, to kill from several thousand to over a million
people. An attack in a remote, lightly populated area might kill as
few as several hundred people—or, with a high-yield setting and
unfavourable winds, hundreds of thousands.

But what kinds of yield settings might the U.S. military want to
use? Conclusion 5 of the NRC report might seem to suggest that
genuinely low-yield settings might be possible: the yield
required "to destroy a hard and deeply buried target is reduced by a
factor of 15 to 25 by enhanced ground-shock coupling if the weapon
is detonated a few meters below the surface." Conclusion 2, however,
is more sobering. To have a high probability of destroying a
facility 200 metres underground, an earth-penetrating weapon with a
yield of 300 kilotons would be required—that is to say, a weapon
with twenty times the explosive power of the Hiroshima bomb.
Extrapolating from the information the report provides, one might
guess that a weapon in the 7-8 kiloton range—with half the power of
the Hiroshima bomb—could be deployed against a facility like Natanz,
the sensitive parts of which are buried 18 metres underground and
protected by reinforced concrete (Beeston). A similar or smaller
weapon might be used against the uranium fuel enrichment facility at
Esfahan—a city of two million people which is also, by the way, a
UNESCO World Heritage City.

The NRC report, it should be noted, was written by a committee, and
one that on the issue of civilian casualties seems to have had some
difficulty in making up its collective mind. Conclusion 4 of the
report informs us that "For the same yield and weather conditions,
the number of casualties from an earth-penetrator weapon detonated
at a few meters depth is, for all practical purposes, equal to that
from a surface burst of the same weapon yield." But Conclusion 7
tells a different story: "For urban targets, civilian casualties
from nuclear earth-penetrator weapons are reduced by a factor of 2
to 10 compared with those from a surface burst having 25 times the
yield."

The most charitable interpretation I can give to Conclusion 7 is
that it was composed for a readership of arithmetical illiterates—
who the authors assume will be unable to deduce that what is
actually being said (assuming a linear relation between yield and
casualties) is that an earth-penetrating weapon will cause from 2.5
to 12.5 times more casualties than a surface-burst weapon of the
same explosive power.

In light of the fact that the NRC report was commissioned by the
United States Congress, we can ourselves conclude that the U.S.
government is contemplating, open-eyed, a war of aggression that
American planners are fully aware will kill—at the very least—many
tens of thousands, and perhaps many hundreds of thousands of
civilians.

The pretexts

The principal reason being advanced for an attack upon Iran is the
claim that Iran is on the verge of becoming a nuclear threat with
the capacity and presumably the intention of launching nuclear
ballistic-missile attacks upon Israel and even western Europe and
the United States.

Iran does possess ballistic missiles, including the Shahab-3, which
with a range of 1300 kilometers is capable of striking Israel, as
well as U.S. forces throughout the Middle East. (Why Iran would
dream of initiating military aggression against the U.S. or against
Israel, which possesses an arsenal of some 200 nuclear warheads,
together with multiple means of delivering them, including ballistic
missiles, is not explained.)

A fear-mongering article published by The Guardian on January 4,
2006, included the information that the next generation of the
Shahab missile "should be capable of reaching Austria and Italy."
The leading sentence of this same article declares that "The Iranian
government has been successfully scouring Europe for the
sophisticated equipment needed to develop a nuclear bomb, according
to the latest western assessment of the country's weapons
programmes" (Cobain and Traynor). But neither this article nor a
companion piece (Traynor and Cobain) published the same day provides
any evidence that Iran actually has a nuclear weapons program, even
though both articles were based upon a "report from a leading EU
intelligence service," a "55-page intelligence assessment, dated
July 1 2005, [that] draws upon material gathered by British, French,
German and Belgian agencies."

There is in fact very good evidence, in the form of exhaustive
inspections by the International Atomic Energy Agency since 2003,
that Iran does not have and has never had any such program. As the
physicist Gordon Prather wrote in September 2005, "after two years
of go-anywhere, see-anything inspections, [the IAEA] has found no
indication that any special nuclear materials or activities
involving them are being—or have been—used in furtherance of a
military purpose" (Prather, 27 Sept. 2005).

But what about intentions? The Guardian journalists inform us
that "western leaders … have long refused to believe Tehran's
insistence that it is not interested in developing nuclear weapons
and is only trying to develop nuclear power for electricity" (Cobain
and Traynor). Perhaps it is time these "western leaders"—George W.
Bush, Tony Blair, and whatever rag-tag and bob-tail of lesser
luminaries they are dragging after them—began to attend to the
facts.

A good place to start might be with William Beeman's and Thomas
Stauffer's assessment of the physical evidence for an Iranian
nuclear weapons program. (Stauffer, by the way, is a former nuclear
engineer and specialist in Middle Eastern energy economics; Beeman
directs Brown University's Middle East Studies program; both have
conducted research on Iran for three decades.) Beeman and Stauffer
note that Iran has three principal nuclear facilities.

Of the first two, a uranium enrichment plant in Natanz and a
deuterium research facility in Arak, they remark that "Neither is in
operation. The only question of interest is whether these facilities
offer a plausible route to the manufacture of plutonium-based
nuclear bombs, and the short answer is: They do not."

Beeman and Stauffer compare the third facility, the PWR
pressurized "light-water" reactor under construction at Bushehr,
with Israel's heavy-water graphite-moderated plant at Dimona. The
Bushehr reactor is designed to maximize power output through long
fuel cycles of 30 to 40 months; it will produce plutonium isotopes
(PU240, 241 and 242) that are "almost impossible to use in making
bombs"; and "the entire reactor will have to shut down—a step that
cannot be concealed from satellites, airplanes and other sources—in
order to permit the extraction of even a single fuel pin." Israel's
Dimona plant, in contrast, produces the bomb-making isotope PU239;
moreover, it "can be re-fueled `on line,' without shutting down.
Thus, high-grade plutonium can be obtained covertly and
continuously."

Claims emanating from the U.S. State Department to the effect that
Iran possesses uranium-enrichment centrifuges or covert plutonium-
extraction facilities are dismissed by Beeman and Stauffer as
implausible, since "the sources are either unidentified or are the
same channels which disseminated the stories about Iraq's non-
conventional weapons or the so-called chemical and biological
weapons plant in Khartoum."

As Michael T. Klare remarks, the U.S. government's "claim that an
attack on Iran would be justified because of its alleged nuclear
potential should invite widespread skepticism." But skeptical
intelligence appears to be the last thing one can expect from the
corporate media, whose organs report without blinking Condoleezza
Rice's threat that "The world will not stand by if Iran continues on
the path to a nuclear weapons capability" (see [Rice]), and George
W. Bush's equally inane declaration, following the IAEA's vote to
refer Iran to the UN Security Council, that "This important step
sends a clear message to the regime in Iran that the world will not
permit the Iranian regime to gain nuclear weapons" (see [Bush]).

There is much to be said about the sorry process of propagandizing,
diplomatic bullying, and behind-the-scenes blackmail and arm-
twisting within the IAEA and in other forums—all of it strongly
reminiscent of the maneuverings of late 2002 and early 2003—that has
led to the present situation, where in early March the Security
Council will be called upon, as in the case of Iraq three years ago,
to accept and legitimize the falsehoods on which the new war of
aggression is to be based. The early stages of this process were
lucidly analyzed by Siddharth Varadarajan in three fine articles in
September 2005. Its more recent phases have been assessed by Gordon
Prather in a series of articles published since mid-September 2005,
and also, with equal scrupulousness and ethical urgency, by another
well-informed physicist, Jorge Hirsch, who has been publishing
essays on the subject since mid-October. I will not repeat here the
analyses developed in their articles (the titles of which are
included in the list of sources which follows this text). But
Varadarajan's recent summary judgment of the diplomatic process is
worth quoting: "Each time it appeases Washington's relentless
pressure on Iran, the international community is being made to climb
higher and higher up a ladder whose final rungs can only be
sanctions and war. This is precisely the route the U.S. followed
against Iraq in its quest to effect regime change there"
(Varadarajan, 1 Feb. 2006).

It is also worth saying something, however briefly, about the media
campaign that has accompanied the diplomatic preparations for war.
This has included, since mid-2005, accusations that that Iran was
involved in the terrorist attacks of 9/11, some of whose
perpetrators are alleged (by members of the wholly discredited Kean
Commission of inquiry into the events of 9/11) to have passed
through Iran on their way to the U.S. (see Coman; Hirsch, 28 Dec.
2005; and also, if you believe The 9/11 Commission Report to have
any credibility, Griffin 2005).

A more relevant accusation surfaced in November 2005, when the New
York Times reported that senior U.S. intelligence officials had
briefed IAEA Director-General Mohamed ElBaradei and his senior staff
on information gleaned from a "stolen Iranian laptop computer" which
they said demonstrated that Iran had developed nuclear weapons
compact enough to fit onto its Shahab missiles. But as Gordon
Prather wrote, "`sources close to the IAEA' said what they had been
briefed on appeared to be aerodynamic design work for a ballistic
missile reentry vehicle, which certainly couldn't contain a nuke if
the Iranians didn't have any. Furthermore, according to David
Albright, a sometime consultant to the IAEA, who has actually had
access to the `stolen Iranian laptop,' the information on it is all
about reentry vehicles and `does not contain words such
[as] `nuclear' and `nuclear warhead'" (Prather, 23 Nov. 2005).

Sorry, boys: no biscuit.

And yet the object of the exercise was evidently not to persuade the
IAEA people, who are not idiots, but rather to get the story into
the amplification system of that Mighty Wurlitzer, the corporate
media.

This strategy has evidently worked. The New York Times, for example,
may have parted company with Judith Miller, the `star' reporter
whose sordid job was to serve as a conduit for Bush regime
misinformation during the lead-up to the invasion of Iraq, but in
Elaine Sciolino they have a reporter who is no less skilled in
passing off neocon propaganda as fact (see Prather, 7 Jan. 2006).
The New York Times also gave front-page space in mid-January to an
article by Richard Bernstein and Stephen Weisman proposing "that
Iran has restarted `research that could give it technology to create
nuclear weapons'" (quoted by Whitney, 17 Jan. 2006). "Perhaps," Mike
Whitney suggests, "the NY Times knows something that the IAEA
inspectors don't? If so, they should step forward and reveal the
facts."

The key facts, as Whitney wrote on January 17, are that there is no
evidence that Iran has either a nuclear weapons program or
centrifuges with which to enrich uranium to weapons-grade
concentration. "These are the two issues which should be given
greatest consideration in determining whether or not Iran poses a
real danger to its neighbors, and yet these are precisely the facts
that are absent from the nearly 2,500 articles written on the topic
in the last few days." Add to these the further fact, noted above,
that the August 2005 National Intelligence Estimate doubled the time
American agencies thought Iran would need to manufacture "the key
ingredient for a nuclear weapon" from the previous estimate of five
years to a full decade.

Why then is the American public being incited to ever greater
anxiety in the face of a weapons program which—on the paranoid and
unproven assumption that it actually exists—is if anything a
receding rather than a gathering threat?

Fox News has led the way among the non-print media in drum-beating
and misinformation—to the extent, as Paul Craig Roberts observes,
that a Fox/Opinion Dynamics poll can plausibly report "that 60% of
Republicans, 41% of Independents, and 36% of Democrats support using
air strikes and ground troops against Iran in order to prevent Iran
from developing nuclear weapons." Worse yet, an LA Times/Bloomberg
poll apparently finds that 57% of the respondents "favor military
intervention if Iran's government pursues a program that would
enable it to build nuclear arms." Any civilian nuclear power program
opens up this possibility (Canada, had it so desired, could have
become a nuclear-weapons power forty years ago)—but the function of
the nuclear Non-Proliferation Treaty is precisely to open the way to
peaceful nuclear power generation while preventing the further
dissemination of nuclear weapons. What the LA Times/Bloomberg poll
therefore means, Roberts says, is that "if Iran exercises its rights
under the non-proliferation treaty, 57% of Americans support a US
military attack on Iran!"

Numbers like these suggest that George W. Bush will indeed get the
new war he so desires. And it appears that he will get it soon. As
Newt Gingrich declared on Fox News in late January, the matter is so
urgent that the attack must happen within the next few
months. "According to Gingrich, Iran not only cannot be trusted with
nuclear technology, but also Iranians `cannot be trusted with their
oil'" (Roberts).

The Euro-denominated Tehran Oil Bourse

Gingrich's wording may sound faintly ludicrous. However, it would
appear to be a slanting allusion to the fact that the Iranian
government has announced plans to open an Iranian Oil Bourse in
March 2006. This Bourse will be in direct competition with the New
York Mercantile Exchange (NYMEX) and London's International
Petroleum Exchange (IPE)—and unlike them will do business not in
U.S. dollars, but in euros. What Gingrich evidently means is that
the Iranians cannot be trusted to market their oil and natural gas
in a manner that continues to benefit the United States.

Peter Phillips and his colleagues in Project Censored explained very
clearly in 2003 how the current U.S. dollar-denominated system of
oil and gas marketing provides the U.S. with a highly advantageous
system of exchange. In 1971, "President Nixon removed U.S. currency
from the gold standard":

"Since then, the world's supply of oil has been traded in U.S. fiat
dollars, making the dollar the dominant world reserve currency.
Countries must provide the United States with goods and services for
dollars—which the United States can freely print. To purchase energy
and pay off any IMF debts, countries must hold vast dollar reserves.
The world is attached to a currency that one country can produce at
will. This means that in addition to controlling world trade, the
United States is importing substantial quantities of goods and
services for very low relative costs." (Phillips)

As Krassimir Petrov has observed, this amounts to an indirect form
of imperial taxation. Unlike previous empires, which extracted
direct taxes from their subject-nations, the American empire
has "distributed instead its own fiat currency, the U.S. Dollar, to
other nations in exchange for goods with the intended consequence of
inflating and devaluing those dollars and paying back later each
dollar with less economic goods—the difference capturing the U.S.
imperial tax."

Oil, backed by military power, has provided the rest of the world
with a reason for accepting depreciating U.S. dollars and holding
ever-increasing amounts of them in reserve. Petrov remarks that in
1972-73 the U.S. made "an iron-clad arrangement with Saudi Arabia to
support the power of the House of Saud in exchange for accepting
only U.S. dollars for its oil. The rest of OPEC was to follow suit
and accept only dollars. Because the world had to buy oil from the
Arab oil countries, it had the reason to hold dollars as payment for
oil. [….] Even though dollars could no longer be exchanged for gold,
they were now exchangeable for oil" (Petrov).

But as Phillips notes, the economic reasons alone for switching to
the euro as a reserve currency have been becoming steadily more
persuasive: "Because of huge trade deficits, it is estimated that
the dollar is currently [in late 2003] overvalued by at least 40
percent. Conversely, the euro-zone does not run huge deficits, uses
higher interest rates, and has an increasingly larger share of world
trade. As the euro establishes its durability and comes into wider
use, the dollar will no longer be the world's only option." The
result will be to make it "easier for other nations to exercise
financial leverage against the United States without damaging
themselves or the global financial system as a whole."

Prior to the invasion of Iraq, several analysts suggested that one
very obvious motive for that war was the fact that, beginning in
November 2000, Iraq had insisted on payment in euros, not dollars,
for its oil. In mid-2003, by which time the U.S. had made clear the
intended terms of its occupation of Iraq, one such analyst, Coilin
Nunan, remarked that it remained "just a theory" that American
threats against Iraq had been made on behalf of the petro-dollar
system—"but a theory that subsequent U.S. actions have done little
to dispel: the U.S. has invaded Iraq and installed its own authority
to rule the country, and as soon as Iraqi oil became available to
sell on the world market, it was announced that payment would be in
dollars only" (Phillips). William Clark writes, more directly, that
the invasion was principally about "gaining strategic control over
Iraq's hydrocarbon reserves and in doing so maintain[ing] the US$ as
the monopoly currency for the critical international oil market"
(Clark, 28 Jan. 2006).

There is currently some debate over the extent to which U.S. war
preparations against Iran are motivated by concern for the continued
hegemony of the petrodollar (see Nunan). I find the analyses of
William Clark and Krassimir Petrov persuasive.

Clark notes that an important obstacle to any major shift in the oil
marketing system has been "the lack of a euro-denominated oil
pricing standard, or oil `marker' as it is referred to in the
industry." (The current "oil markers," in relation to which other
internationally traded oil is priced, are Norway Brent crude, West
Texas Intermediate crude [WTI], and United Arab Emirates [UAE] Dubai
crude—all of them U.S. dollar denominated.) In his opinion, "it is
logical to assume the proposed Iranian bourse will usher in a fourth
crude oil marker—denominated in the euro currency," and will
thus "remove the main technical obstacle for a broad-based petro-
euro system for international oil trades." This will have the effect
of introducing "petrodollar versus petroeuro currency hedging, and
fundamentally new dynamics to the biggest market in the world—global
oil and gas trades. In essence, the US will no longer be able to
effortlessly expand credit via US Treasury bills, and the US$'s
demand/liquidity value will fall" (Clark, 28 Jan. 2006).

An even partial loss of the U.S. dollar's position as the dominant
reserve currency for global energy trading would, as Petrov
suggests, lead to a sharp decline in its value and an ensuing
acceleration of inflation and upward pressure on interest rates,
with unpleasant consequences. "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 […], or
alternatively, to take the Weimar way out by inflating, […] drown
[ing] the financial system in liquidity […] and hyperinflating the
economy."

Any attempt, on the other hand, to preserve what Mike Whitney calls
the "perfect pyramid-scheme" of America's currency monopoly
(Whitney, 23 Jan. 2006) by means of military aggression against Iran
is likely to result in equal or greater disruptions to the world
economy. American military aggression, which might conceivably
include attempts to occupy Iran's oil-producing Khuzestan province
and the coastline along the Straits of Hormuz (see Pilger), will not
just have appalling consequences for civilians throughout the
region; it may also place American forces into situations still more
closely analogous than the present stage of Iraqi resistance to the
situation produced in Lebanon by Israel's invasion of that country—
which ended in 2000 with Israel's first military defeat (see Salama
and Ruster).

The involvement of Turkey

One significant difference between the warnings of a coming war
circulating in early 2005 and those which have appeared in recent
months is the current evidence of feverish diplomatic activity
between Washington and Ankara. The NATO powers have evidently been
co-opted into Washington's war plans: the so-called EU-3 (France,
Germany, and Britain) presented Iran with a negotiating position on
the nuclear fuel cycle for Iran's power plants that seemed designed
to produce an indignant refusal. (As Aijaz Ahmad writes, the
European group "was not negotiating; it was relaying to Iran, and to
all and sundry, what the U.S. was demanding and threatening to
report Iran to the Security Council if the latter did not comply.
Everyone knows that Iran had closed its Isphahan facility
voluntarily, as a confidence-building measure, expecting some
reciprocity, and then re-opened it, in retaliation, after having
waited for reciprocity for many months and not getting it—indeed,
receiving only escalated demands.")

But according to the well-connected Jürgen Gottslich, writing in Der
Spiegel in late December, Iran was not discussed during the new
German Defense Minister Franz Josef Jung's recent visit to
Washington. Gottslich wrote that "the speculation surrounding an
American strike against Iran centers more on developments in Turkey.
There has been a definite surge in visits to Ankara by high-ranking
National Security personnel from the U.S. and by NATO officials.
Within the space of just a few days, FBI Director Robert Mueller,
[CIA] Director [Porter] Goss and then NATO Secretary General Jaap de
Hoop Scheffer visited Turkey." Condoleezza Rice also flew to Turkey
immediately after her December trip to Berlin.

The aim of these visits has quite obviously been to bring Turkey
into line with a planned attack on Iran. As Gottslich writes, "On
his Istanbul visit, Goss is alleged to have given Turkish security
services three dossiers that prove Iranian cooperation with al-
Qaeda. In addition, there was a fourth dossier focusing on the
current state of Iran's nuclear weapons program."

But why, beyond the obvious fact of Turkey's shared border with
Iran, should Turkey be such an important factor in American war
plans? The answer is suggested by an article published by an
American academic, Robert Olson, in the June 2002 issue of Middle
East Policy. According to Noam Chomsky, Olson "reports that 12
percent of Israel's offensive aircraft are to be `permanently
stationed in Turkey' and have been `flying reconnaissance flights
along Iran's border,' signaling to Iran `that it would soon be
challenged elsewhere by Turkey and its Israeli and American allies'"
(Chomsky 159). These Israeli aircraft would evidently take part in
any American and Israeli aerial attack on Iran, and Turkish consent
would no doubt be necessary for their use in such an act.

What advantages might Turkey hope to gain from its consent? The
collaboration of Britain, France and Germany in the cranking up of
diplomatic pressure on Iran might suggest that Turkey's much-desired
admission to the European Union could have been held out as one
carrot—possibly with the argument that participation in an attack on
a fundamentalist Islamic state could be one way of calming European
fears over the entry of a Muslim nation into the Union. An equally
persuasive advantage may have been a secret promise of future
admission to the select group of nuclear powers.

Christopher Deliso has assembled evidence both of Turkey's
persistent involvement in the smuggling and production of nuclear
weapons technology, including centrifuge components and triggering
devices (Deliso, 21 Nov. 2005)—and also of the very interesting fact
that the key administration officials involved in the outing of
Valerie Plame, who was investigating these murky operations,
included people, among them Marc Grossman, former U.S. ambassador to
Turkey, who give every appearance of having been centrally involved
in the very network of nuclear arms proliferation that the CIA was
working to uncover (Deliso, 24 Nov. 2005). Even when supplemented by
Sibel Edmonds' indications of high-level collaboration in the
frustration by Turkish agents of the FBI's parallel investigations
of what appears to be the same network, the evidence remains at best
suppositious. And yet despite the inaccessibility of details—which
will no doubt remain inaccessible for as long as Dick Cheney, John
Bolton and the rest retain the power to frustrate investigations
into the activities of their close associates and subordinates—the
larger pattern is, to say the least, intriguing. The same highly-
placed neoconservatives who have been crying wolf over Iran's non-
existent nuclear weapons appear to have been deeply—and lucratively—
involved in the trafficking of restricted and forbidden weapons
technology into Turkey.

Should this pattern turn out indeed to involve corruption,
hypocrisy, and treachery on the grand scale that Deliso's
investigative reporting would suggest, is there any reason one
should be surprised?

What else, to be frank, would you expect from people such as these?




*************
Global Research Contributing Editor Michael Keefer is Associate
Professor of English at the University of Guelph. He is a former
President of the Association of Canadian College and University
Teachers of English. His recent writings include a series of
articles on electoral fraud in the 2004 US presidential election
published by the Centre for Research on Globalization.



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