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“It is already decided,” one Saudi prince told an unnamed European official, according to Debka-Net-Weekly. When asked by the ‘European’ if America will back out of the hatched plan to strike Iran, the prince said, “Anything can happen, of course. But this time we’re sure the American decision to attack is final and we are already making appropriate preparations.”
However, according to the source, the prince doesn’t know if a strike on Iran will come before or after the elections in November. But, “the question now isn’t if the Americans will attack Iran, but when,” the prince said.
And the Saudis should know best. Fears of an Iranian attack on Saudi Arabia run deep in the kingdom for its role in allowing a formidable US presence in the Persian Gulf for more than four decades, a sin for which Saudi Arabia will never be forgiven by the Muslim alliance in the region, and has necessitated a close U.S.-Saudi alliance to counter threats from Iraq (no longer an issue), Saudi Shiites and Iran.
Iran’s hatred for the U.S. can be traced to 1953, the year of a successful coup by MI6 and the CIA to overthrow the Mohammad Mosaddegh government. But after the fall of the last Shah of Iran, Mohammad Reza Shah Pahlavi, in 1979, decades of Iranian defiance of American demands to open Persian oil fields to the West, in a similar manner to the Saudi kingdom’s quid pro quo with Washington regarding access to Saudi Arabia’s abundant Ghawar oil fields, have been repeatedly spurned by Iran’s secular and religious leadership. But as long as the Iranians continued to transact in U.S. dollars for Persian oil, a strong case for averting a high-risk war with Iran at this time could be made.
But, Feb. 27, 2012, Iran crossed the proverbial line in the sand following an American-led effort to cut Iran from the international bank clearing system, called SWIFT. The Persian central bank announced that, not only will any country doing business with Iran be allowed to pay in any currency other than the U.S. dollar, but those countries wishing to transact in gold (anti-dollar) are encouraged to do so, with the latter option especially troublesome and defiant.
“Significant difficulties in making dollar payments to Iranian banks have forced Iran’s trading partners to look for alternative ways to settle transactions, including direct barter deals,” according to Reuters.
“In its trade transactions with other countries, Iran does not limit itself to the U.S. dollar, and the country can pay using its own currency,” Reuters quoted central bank governor Mahmoud Bahmani as saying. “If a country should so choose, it can pay in gold and we would accept that without any reservation.”
That latest transgression, just as all the other transgressions of Iran since 1979, this time, the de-linking of the U.S. dollar to Iranian oil, must be punished, according to MIT professor and U.S. foreign policy expert Noam Chomsky.
“Iran broke ranks with the United States in 1979, and this is a crime for which it has to be punished,” said Chomski in a discussion with Gilbert Archcar for the book, Perilous Power. “And it goes way beyond rational state interests. As with Cuba, it’s the Mafia mentality: You can’t allow disobedience to exist; it’s too dangerous because other people might get the idea that they can be disobedient as well. So Iran’s going to have to be punished for that act of disobedience.”
Punishment of Iran through sanctions for an uncooperative regime regarding U.S. interests in the Middle East is one thing, dropping the U.S. dollar is quite another—an act so grave that, if the U.S. allows Iran to go unchallenged or unpunished, other countries seeking to ditch the poorly managed dollar will do so, as well. That’s the line in the sand that must lead to military action, according to William Clark, author of The Real Reasons Why Iran is the Next Target: The Emerging Euro-denominated International Oil Marker.
Written some time prior to Feb. 2012, Clark, at that time, focused his discussion on the dollar-euro rivalry for international trade as it relates to Iran’s Oil Bourse. Iran’s goal of only accepting euros for its oil is enough to find Iran in hot water, but Iran’s one-step-further threat to U.S. dollar hegemony by including gold in its February 2012 announcement, the Achilles’ Heel of the nonredeemable U.S. dollar, only serves to underscore Clark’s thesis that much more.
“In 2005-2006, The Tehran government has a developed a plan to begin competing with New York’s NYMEX and London’s IPE with respect to international oil trades – using a euro-denominated international oil-trading mechanism,” Clark wrote. “This means that without some form of U.S. intervention, the euro is going to establish a firm foothold in the international oil trade.
“Given U.S. debt levels and the stated neoconservative project for U.S. global domination, Tehran’s objective constitutes an obvious encroachment on U.S. dollar supremacy in the international oil market.”
And Tehran’s “obvious encroachment” comes at a very bad time—for the U.S., that is—but comes at an opportunistic time for Iran, as it will be able to count on a strong Russian and Chinese alliance against U.S. aggression for control of crude oil in the Middle East—oil badly needed by the Chinese and strategically aligned Russia.
At this stage, odds now seem to favor WWIII, a risk Washington must take to achieve an all-or-nothing outcome to the alternative: the inevitable end to the U.S. dollar as the world’s premiere reserve currency and the dire implications of second-world status for the United States, hyperinflation and civil unrest, or worse.
Clark stated, “Clearly, there are numerous risks regarding neoconservative strategy towards Iran. First, unlike Iraq, Iran has a robust military capability. Secondly, a repeat of any ‘Shock and Awe’ tactics is not advisable given that Iran has installed sophisticated anti-ship missiles on the Island of Abu Musa, and therefore controls the critical Strait of Hormuz.
“In the case of a U.S. attack, a shut down of the Strait of Hormuz – where all of the Persian Gulf bound oil tankers must pass – could easily trigger a market panic with oil prices skyrocketing to $100 per barrel or more. World oil production is now flat out, and a major interruption would escalate oil prices to a level that would set off a global Depression. Why are the neoconservatives willing to takes such risks? Simply stated – their goal is U.S. global domination.”
Oil already trades at $100, partly as risk premium to a closing of the Persian Gulf. When an attack on Iran is underway, all bets are off for any graceful transition to new global reserve currency scheme.
Related Tickers: SPDR Select Sector Fund (NYSEARCA:XLE), ProShares Ultra DJ-UBS Crude Oil (NYSEARCA:UCO), United States Oil Fund LP (NYSEARCA:USO).
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