A Bourse, Of Course

Prior to the U.S. invasion of Iraq, Saddam Hussein had switched from the dollar to the Euro as his oil trading currency. There are some who, looking to make simple of a complex situation, say that this was the motive behind the U.S. attack. And while it may not have been the motive, but it certainly did not help the Iraqis.

The dollar is on a perilous perch. But it has two things going in its favor – one that it is backed by the incredible military might of the United States, and the other that it is the reserve currency for trading oil on world markets. Any country than needs to buy oil needs to have dollars on hand. This keeps demand up. But if there is a move away from the dollar, we are in deep, deep trouble.

The question is, would the U.S. resort to military action to keep the dollar the world standard? There is a test available – it’s called a “bourse”, and the Iranians are running one right now.

I haven’t thought about the Iranian bourse in quite a while. I had read years ago that the Iranians wanted to set up a world exchange where oil could be traded in any currency. (The word “bourse” merely means a “trading floor”, or an exchange. The New York Stock Exchange is a bourse.) I looked it up again recently to see if it had ever come to pass – indeed it has. Since February 17 of this year the Iranians have been competing with the New York Mercantile Exchange and the International Petroleum Exchange in London, the primary trading platforms for world oil. The currency basis for the bourse is the Iranian rial, and of course, the Euro.

Vice President Cheney was recently in Saudi Arabia. Shortly after his visit the Saudi paper Okaz reported that they were developing “national plans to deal with any sudden nuclear and radioactive hazards that may affect the kingdom following experts’ warnings of possible attacks on Iran’s Bushehr nuclear reactors.” (Apparently the Saudi press, under rigid control of the royal family, is a little more free to report on these matters than our own.)

Is Cheney’s mission to the Middle East to prepare them for an impending attack on Iran? Is the bourse part of the reason for that attack?

If the dollar ceases to be the world trading currency for oil, it becomes just another currency. Given our massive trade and budget deficits, it would not even be a desirable one to hold. So trading oil in Euros is a real and present danger to the economic well being of the United States. I don’t know how significant the Iranian oil bourse will be or whether or not it poses a real threat to us. But I do know this – if the United States perceives that the Iranian bourse represents clear and present danger, we will bomb them. I’ve seen it happen before.

And all Bush has to do is give the word – Congress has already authorized action. If they do bomb Iran, they will use “bunker busters”, or tactical nuclear weapons. Thousands of people will be killed, and millions more are downwind. We are a dangerous people, and these are indeed dangerous times.

Fascinating stuff, this – it gets even more interesting. It’s just a small example of how much news we miss living here in the land of the free. The Iranian bourse is internet-based – right around the time it was set to open, five undersea cables that carry Internet traffic to Mideastern countries were severed – one source says as many as nine. Millions of users were without service. One of the cuts was reported to have been caused by a ship dragging anchor dragging near Egypt, but after four other cables were cut (two of them in one day) people got suspicious. Read here and here and here and here for more.

Many possibilities – maybe multiple tankers worldwide forgot how to drop and bring anchors aweigh, all within a week of one another. Problem is, no ships were reported in the area of the cuts. Or, it could be Arab states harassing one another – we all know how emotional and irrational they can be.

Or it could be the U.S. preparing for war. We have the technology to engage in ocean-floor warfare, and have been doing it since the Cold War. It could be a not-so-subtle warning to the Iranians to shut down the bourse. Or it could be the real game – it could be step one in the attack. It could be that Cheney’s mission is to prepare our allies for yet another unprovoked attack on an oil-rich and uppity state.

PS: If there is an attack, watch the details to see if the Island of Kish is bombed. That is the physical location of the bourse.