The liberation of the U.S. Dollar in Iraq
- Please send as far and wide as possible.
Editor, The Konformist
November 10th 2005
The liberation of the U.S. Dollar in Iraq
Oil, that bubbling crude, Black Gold, Texas Tea; no matter which
country's buying or selling it, all oil purchases around the globe
are made with U.S. dollars only. The greenback is the international
currency of oil sales, all oil sales the world over. Since the
dollar is the money needed to purchase oil, every country around the
globe must hold U.S. dollars. By having to earn or borrow U.S.
currency to purchase oil, the value of the dollar is artificially
supported because of the demand for oil. Supporting the value of
the dollar is vital to the economy of the United States.
If the demand for the dollar overseas would diminish fifty percent,
meaning that half of the U.S. currency floating around the globe
would no longer be needed by foreign governments, every country and
person holding U.S. dollars would quickly experience a fifty percent
decrease in their monies purchasing power, or one hundred percent
As long as the greenback reigns supreme as the international
currency for oil purchases, catastrophic economic collapse of the
U.S. economy will be prevented. Even as the United States national
debt approaches $8 trillion, and despite the fact that for all
practical purposes the federal government of the United States has
been legally bankrupt since 1933, the U.S. dollar has survived
depressions and recessions, bull and bear markets, inflation and
deflation, fluctuating interest rates, and every other pressure and
strain placed upon it. As with any other commodity, the reason the
dollar has weathered the storms of the last seven-two years is
directly attributed to demand.
The currency of the United States is fiat money. Fiat money is
paper money decreed legal tender, not backed by gold or silver.
What that means is that any value the U.S. dollar retains in the
United States is the result of the federal government enacting law
that says it is legal tender. Legal tender means that the dollar
must be accepted in the United States as payment for all debts,
public and private. If the people living in the United States lost
faith in the dollar and began to defy the legal tender law by only
accepting gold coin to pay for debt, the value of the dollar would
plummet. If the people persisted and resisted the federal
government's certain forceful effort to make people accept the
dollar to pay for all debts, the value of the dollar would
completely vanish. It would not be worth the paper it's printed
on. It would be worth-less.
If people refused the dollar in the United States and started
trading in gold coin, the big losers wouldn't be the people,
although they would know hardship and lean times. It would be the
banking cartel, the Federal Reserve, and the federal government,
because it is the borrowing of fiat money from the Federal Reserve
that allows the federal government to spend money it doesn't have on
things it should not need. The Federal Reserve is sustained by
interest paid on fiat money and the global demand for the U.S.
dollar resulting from the dollar being the international currency of
all oil sales. It's as simple as supply, demand, and interest
The problem with fiat money is that it creates the welfare state.
When money is one hundred percent backed by gold or silver,
government cannot spend money it does not have because they cannot
print more money unless they have the gold or silver to back it up.
Fiat money has allowed the United States to run up a high interest,
credit card-like debt of, as previously mentioned, $8 trillion.
When the politicians in Washington DC need more money, they simple
print it. For each dollar printed without any commodity like gold
or silver supporting it, and for each printed while there exists a
national debt, the value of all other dollars already in circulation
depreciates. Again, it's supply and demand. When the federal
government can manipulate the money supply simply by printing more
money, the value of the money in the people's wallets decrease.
This decrease in value increases the number of dollars required to
make purchases. When this occurs, it's called inflation. Inflation
is a hidden tax on the American people. When the politicians in
Washington DC continue to spend borrowed money, they are in fact
passing a humongous tax onto the people.
So what's this have to do with the price of Texas Tea in Iraq? The
background information explaining fiat money and the U.S. dollar is
necessary to fully appreciate one of the reasons why I believe the
United States invaded Iraq and why we may have little choice than to
invade Iran. It is my contention that the War on Terror has some
additional elements that are seldom discussed by the mainstream
media. Some of the fight has to do with protecting the supremacy of
the U.S. dollar as the international currency for oil sales.
Protesters of the War in Iraq say oil is the reason we invaded that
country. The Iraqi people that are now fighting against our troops
say we're in their country to steal their oil. Both are wrong. The
world's oil supply is stable, despite what big oil would like you to
believe. Consequently, there is no need at this time to invade oil-
producing countries to steal their oil. Remember, it's supply and
demand. No, America is not in Iraq to steal oil. Part of the
reason America is in Iraq is to re-establish the U.S. dollar as the
only currency accepted to purchase Iraq's oil.
In November 2000, Iraq stopped accepting U.S. dollars for their
oil. Counted as a purely political move, Saddam Hussein switched
the currency required to purchase Iraqi oil to the euro. Selling
oil through the U.N. Oil for Food Program, Iraq converted all of its
U.S. dollars in its U.N. account to the euro. Shortly thereafter,
Iraq converted $10 billion in their U.N. reserve fund to the euro.
By the end of 2000, Iraq had abandoned the U.S. dollar completely.
Two months after the United States invaded Iraq, the Oil for Food
Program was ended, the country's accounts were switch back to
dollars, and oil began to be sold once again for U.S. dollars. No
longer could the world buy oil from Iraq with the euro. Universal
global dollar supremacy was restored. It is interesting to note
that the latest recession that the United States endured began and
ended within the same timeframe as when Iraq was trading oil for
euros. Whether this is a coincidence or related, the American
people may never know.
Today there's a greater threat to dollar supremacy in the global oil
market. It is Iran's goal to open their version of the New York
Mercantile Index (NYMEX) and London's International Petroleum
Exchange (IPE). The NYMEX and IPE are both owned by a U.S.
consortium and operated by IntercontinentalExchange, Inc. based in
Atlanta, GA. Both the NYMEX and IPE can be described as stock
exchanges for oil and other natural resources they're oil
exchanges for the world's global oil market. Obviously, both only
accept U.S. dollars.
Iran is projected to launch a third oil exchange in March 2006.
They have developed an Iranian petroeuro system for oil trade, which
if enacted, would threaten U.S. dollar supremacy far greater than
Iraq's euro conversion. Called the Iran Oil Bourse, an exchange
that only accepts the euro for oil sales would mean that the entire
world could begin purchasing oil from any oil-producing nation with
euros instead of dollars. The Iranian plan isn't limited to
purchasing one oil-producing country's oil with euros. Their plan
will create a global alternative to the U.S. dollar. If opened, the
Iran Oil Bourse will further the momentum of OPEC to create an
alternate currency for oil purchases worldwide. China, Russia, and
the European Union are evaluating the Iranian plan to exchange oil
for euros, and giving the plan serious consideration.
If these countries drop the dollar in favor of the euro and support
the demise of the U.S. dollar as the international currency for
global oil purchasing, America's debt will end in default, the trade
deficit will likely double, and the dollars that we carry in our
wallets will be worth less, much less then they are right now. In
the simplest terms, everything will appear to cost more because the
dollar will be worth less.
In theory, the price of goods and services do not go up. It is
actually the value of the dollar going down that causes economic
insecurity and inflated prices at the cash register. Once the
American people understand this important lesson regarding fiat
money, change will be demanded in Washington DC.
Whether the United States can thwart Iran's Oil Bourse without
military intervention is debatable and remains to be seen. The
damage done to the economic security of the United States by both
the Democratic and Republican Parties over the last seven decades,
their running up a staggering $8 trillion national debt, has
weakened the dollar and placed the United States in the precarious
position of having to find excuses to invade countries that threaten
not America's sovereignty and way of life, but its currency.
This strategy of backing the U.S. dollar with bullets instead of
bullion cannot sustain itself forever. Sooner or later, the
American people will be required to pay for their government's out
of control spending. When that time comes, the people are going to
pay hell trying to do what needs to be done; abolish the Federal
Reserve Act of 1913 and 16th Amendment of the Constitution,
eliminate the IRS and at least twelve hundred of the fifteen hundred
agencies of the federal government while slashing the two million
federal employee payroll by fifty percent.
Essentially, the current grip of the two-party juggernaut in
Washington DC needs to be broken, the current government needs to be
abolished and returned to a constitutional republic, and finally,
the dollar has to be returned to the gold standard once and for
all. If the American people fail to take these specific actions
now, it is likely that in ten years or less, the dollar will be
replaced by the euro as legal tender in the United States, and the
American people will be subject to direct, global taxation by the
United Nations on behalf of the World Bank and International
You can now consider yourself forewarned.
Ed Haas is a freelance writer and author originally from Mt. Penn,
Pennsylvania. He currently resides in beautiful Mt. Pleasant, South
Carolina. To learn more about Ed's work, please visit