Boursing with Anticipation

By Ryan McGreal
Published January 19, 2006

Back in August, as part of my series on peak oil, I wrote a sidebar article on Iran's plan to introduce a euro-denominated oil exchange in March 2006.

At the time, I added it almost as an afterthought, but it seemed be the proverbial right piece at the right time, because a number of other sites picked it up. To this day, the article is still one of the biggest inbound links to RTH.

Part of its timing related to the strong US push to demonize Iran and accuse it of developing nuclear weapons. Many of the US government's rhetorical devices were remarkably similar to those used to mobilize public opinion against Iraq. (Later, I wrote a blog entry comparing the campaigns against Iraq and Iran and examining the case against Iran more closely.)

As we approach the launch date of the oil bourse, interest in Iran is picking up again. I just read an excellent overview of the role the US currency - and particularly the oil-for-dollars arrangement the US has with OPEC - plays in maintaining American hegemony.

The dollar hegemony that has allowed America to live far beyond its means for decades is under serious threat, and it will be interesting to see how it plays out, and what that means for the US economy - especially as Canada seems poised to elect a federal government determined to establish much closer economic and military ties with America.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website, has been known to share passing thoughts on Twitter and Facebook, and posts the occasional cat photo on Instagram.


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By jason (registered) | Posted January 19, 2006 at 09:57:34

Of course, it gets harder and harder to ignore Iran as their leader spouts off about wiping certain ethnic groups off the planet and the like. Whether the US had already focused on Iran due to the petro-dollars remake, the new Iranian leader isn't helping his cause by issuing threats and crazy statements on a regular basis. I'm sure the US doesn't mind - it gives them a good excuse to go in there and deal with this guy, and more importantly in their minds, the oil situation.

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By Ryan (registered) - website | Posted January 30, 2006 at 10:24:26

I'd argue the opposite: Ahmadinejad has nothing to lose and everything to gain locally by inflaming jingoism and hatred at home.

As Gary North argued in a recent article, if America doesn't respond, Iran continues with its plans, but if America does bite, "Iran instantly wins the legitimacy sweepstakes." (see )

America cannot invade and occupy Iran. Its military is already overextended, and in any case cannot even contain violence in Iraq, which was impoverished after a decade-long war and a decade of crushing economic sanctions. Iran is much stronger militarily than Iraq, with a popular government recently elected in a more-or-less democratic process.

In addition to its own ability to take 2.5 million barrels a day of oil out of production, Iran is situated geographically in an ideal position to block much of the oil coming out of the Persian Gulf, particularly oil coming from Saudi Arabia.

Iran also possesses sophisticated missile systems that can be hidden in the crags and folds of its Gulf coast and stop any ships attempting to pass the Straits of Hormuz.

Even assuming America could somehow overthrow the government, it could not prevent the systematic sabotage of Iran's oil infrastructure by insurgents, of whom there are certain to be no shortage.

Despite Ahmadinejad's appeal to the most reactionary and vitriolic of human passions (also no shortage of that in governments these days!), the US would be foolish to think it could march in and "deal with" Iran.

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By Ryan (registered) - website | Posted January 30, 2006 at 10:25:23

Sorry, the link didn't get posted. Here it is:

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