Thursday, August 25, 2005

Heads Up!! The worst is about to happen

Alan Peters: The name “Alan Peters” is a nom de plume for a writer who was for many years involved in intelligence and security matters in Iran. He had significant access inside Iran at high levels during the rule of the Shah, until early 1979.
The news item below - posted on, hidden among so many other stories, fails to call enough attention to perhaps the very worst that could happen seemingly to be about to happen.

Oil might soon no longer be linked to the US Dollar and move to the Euro.

As many of you know, a primary "oil" consideration for going to war in Iraq was to try to prevent this happening. Not - as the Cindy Sheehans or liberal Democrats with kitchen table knowledge of world politics and economy trumpeted - to put money into the pockets of Bush's cronies or Halliburton. To protect tens of millions of Americans from internal disaster within our own shores.

If the trend from the Dollar to the Euro happens too abruptly, we in the USA can look to having some 200 MILLION Americans starving in the streets within a short time frame. No exaggeration! Do the math! READ MORE

And unlike the Great Depression of the 1920's there will be nobody, nor any organization capable of setting up soup kitchens for them. Even slow transition, as it appears to be evolving, will almost certainly turn us economically into an insular fifth world country with inflation somewhere along the lines of Argentina. Central Banks of our friendliest nations will be unable to absorb the dollars flooding the market without buyers, to maintain a value for our currency - which they no longer need anyway.

Simplistically put, without a need for dollars with which to buy oil, Central Banks that hold huge dollar reserves virtually for only this reason, will dump their American currency. An unavoidable consequence would be a 40% drop - at least - in the value of the Dollar.

The USA could then no longer afford, nor be able to service our national debt. Do the math with this parameter, too.

All investors and credit holders would pull out of the USA market - including from Wall Street and American industries. Americans could no longer afford to buy things, so have zero market value for investors.

The price of oil for the USA would be more expensive than ever since the "dollar tax" mentioned in the article below would be reversed and America would have to pay a "Euro conversion Tax" to import oil. The cost of everything in America would spiral upward similar to what happened in Germany after World War II, where you needed a wheelbarrow full of money to buy a loaf of bread!

Today, instead of Adolf Hitler, read Mahmoud Ahmadi-Nejat, the new President of Iran and history repeating itself.

Note: the huge resistance of France and Germany to removing Saddam Hussein, apart from the oil for food corruption, was in the short sighted hope of encouraging this transition. Iraq was already planning to unlink oil prices from the Dollar to the Euro. Russia, with huge oil reserves of its own, was more than happy to be complicit in the extra revenue from this change and some oil producing countries had already begun selling some of their capacity in Euros.

All this began on the Clinton administration watch but the time frame was such that he would be out of office by the time it hit, so he refused to deal with it. When oil-savvy Bush and Cheney took over, they saw the disaster on the horizon and took steps - no matter how unpopular - to try to deal with it. The most critical challenge was to be able to dissuade all the other OPEC countries from dropping the Dollar and adopting the Euro.

Iraq has been a warning shot across their bows - but Iran has now tilted the playing field in the opposite direction, adding nuclear weaponry as a potential enforcement threat of their plans to destabilize the USA economy (a constant dream of Al-Qaeda, too) without caring, considering their iron fist control of their own population, that a domino effect would ensue and the rest of the world economy could easily collapse.

Holding huge oil and gas reserves with which to barter, (money could become almost worthless) Iran stands to come out smelling of roses as the world crashes. Plus nuclear energy established inside the country would reduce their own dependence on fossil fuels and make them even more powerful. Possibly along with China and India, reaching superpower status.

How sad, in the face of real challenges, that the Cindy Sheehans, the almost abjectly ignorant or self-satisfied politicians in both parties, can only think within their tiny mental boxes and attack the Bush administration for selfish, local, kitchen table level reasons, when we are facing an all obliterating, global, economical Tsunami which jeopardizes our very existence and survival.

I may be off in the urgency of time frames I posit but not in the inevitable overall direction in which we hurtle to disaster - unless we do something about it. That something requires lethal action toward Iran without thought of liberal or European hand-wringing.

The duty and responsibility of the President of the United States is to protect his nation, his people and ensure their survival and well-being. Inactivity against the Iranian Hitler situation will only result in more millions of Americans dying or in distress than there a Iranians in Iran. Pick a side in this equation based on logic, not "in a perfect world" scenario that Ahmadi-Nejat openly scoffs at and denigrates as Western weakness. For now he is right, we are.

Alan Peters
Orange County, California
Would any of our readers who are economists or commodity experts want to respond to this? I would love to hear from you.