Gretchen Dutschke Klotz

For discussion:

Euro and petrodollar, empire and economic recession

The petrodollar, Euro question is certainly an interesting one. I heard it first some years ago before the Iraq war began when I was in Germany (including the view that that is why the US wanted to attack Iraq and why Germany would oppose it) and I'm sure it plays a big role in the neo-con view. I wouldn't dismiss resource control and China as big factors too. But of course they are all intertwined. Nonetheless, the threats of a new war against Iran makes no sense at all, except in this petrodollar context.

What to do?

As we discussed yesterday at the UJP Conference, the one point of entry we found was the military. The USA cannot attack and invade Iran without the military. But the military is stuck in Iraq. I do think the Bush government wants to get out of Iraq (they never intended this large army to stay this long - expecting only to have bases with a small controlling army and a US installed government), but if they just go now, they may not permanently secure their goal of keeping control of Iraqi oil income, i.e. keeping it dollar denominated.

A Shiite election victory, if the US allows it, would inevitably increase Iranian influence in Iraq, how could it not???? Isn't that an irony? Logically one could ask, why, if the US intends to dispose of the Iranian Shiites, they would allow a Shiite government in Iraq. (I suspect, that a Shiite government in Iraq would be OK with the US government as long as they kept selling oil in dollars. No one knows if they would.) Although the Bush government blusters with their great Iraq success, I wonder if in fact, in private they are banging their heads against the wall.

So, what we have to do, as was pointed out at the UJP conference is join with Military families against the war and Iraq veterans against the war discouraging young people from entering the military in the first place, making known all over the US how the deployment of the National Guard is harming local police, fire department and security of all sorts. Getting out of Iraq should not be our focus (it only opens the way for the next war). Instead, reducing the military and getting the National Guard back to fulfilling its real purpose must be our goal.

But what about empire, what about permanent US hegemony?

The Bush gov. and its neo-con pushers are so fixated on this goal that we will not be able to change this no matter what we do. However, it is quite clear now, that the actions of the Bush gov. have accelerated the forces that are about to end US hegemony. We don't have to do anything about it. It will happen, and likely soon, as China and other countries gradually, so far, dispose of their dollars and build up Euro reserves. What is the content of the secret agreements China has made with Iran and Iraq? It obviously has to do with oil and maybe with support for Euro denomination? Why did China want to buy Unocal? That is the ultimate irony. Unocal, that's the company that supposedly urged the Afghanistan war, so they could build their pipeline to get oil from middle Asia to the sea. If China owns it, doesn't it seem likely the oil will go to China? Did the US fight the war against the Taliban for China? Whatever the answer, it looks like Bush and his neo-con gov. are traitors, downright traitors to the USA, using our tax dollars to make it possible for China to pretty much get control of Middle Eastern oil.

The transfer from a dollar reserve world economy to a Euro reserve world economy (or a combo reserve) will end US financial hegemony. With an empire-fixated Bush gov. it is unlikely to be a gentle transition. So we might well expect a recession or depression in the process. People react with horror at the thought of an economic disaster. Bushies, of course, do not believe such a thing could happen under their rule. But many people, liberal, leftist and libertarian alike do think it will happen. The bad thing about it would be that poorer people would suffer most as always. Perhaps what we should be doing is planning how best to alleviate these consequences. Maybe we are also thinking of ourselves, and how we'll survive it.

Fascism in the USA?

Many leftists are horrified at the thought because they believe an economic collapse will lead to fascism. But the USA under the Bush gov. has already taken many steps leading to a form of gov. resembling fascism. We can't stop the economic disarray in any case. The question is, do we want to encourage it? I don't think we should answer this with the 'we'll be creating fascism' argument. I suspect we will have to go through an economic disruption of some kind that will lead to a reorganization of the global economic system. This new system will not be defined by a US-Empire.

Window of opportunity

There will be a window of opportunity for us. We should be preparing for it. We have to know and be able to narrate very clearly what we think will be better than US empire, and why it will be better for the people of the USA and the world. This is one of our big tasks. To be sure, the new economic motors China, India, maybe S. America (Brazil), will have a lot to say. Europe, supplying the Euro reserve currency will have a lot to say because of that. China, likely the most powerful of all, is not democratic and will not likely support democratic directions. But it may not hinder them in other places.

European democracies will survive and influence others, but those social democracies will still be dominated by moneyed interests. Europe needs new grass roots democracy movements to take advantage of the coming window of opportunity. They don't have them right now. Instead they are mired in their Christian Values vs. Muslim immigration/influence fears. And they don't even believe in God. Someone has to shake them up, so people get what's really going on in the world. And we have to do our best to keep the insane people running our US gov. from nuking everyone.

Can the Evangelicals be convinced that US world empire is not mentioned in the Bible as being God's will and this is not the Gospel Jesus was preaching? At a recent conference of Evangelicals at Gordon College there seemed to be a lot of feeling in that direction. Now they just have to convince Hastert. One final note, as people and governments reduce their dollar reserves and the dollar falls, some people are advocating a gold standard again, or just using gold as a hedge against a dollar fall. If people stop investing in the stock market and stop buying US treasuries (and German banks stop advising investors to buy only US funds) and everyone gets rid of their dollars, it will possibly induce an economic recession, so back to our question, do we want to encourage economic disarray? Well, if we do, we should discourage people from buying US treasuries.

If we have savings or retirement accounts, we might consider getting them out of dollars and into Euros, but the easiest of all is to buy gold. There is an exchange traded fund called Gold with the stock exchange symbol GLD. If you buy that for each share, you are actually buying 1/10 of an ounce of gold I believe and could if you wanted, exchange it for actual gold. It can be bought and sold on the stock market like any other stock.

Sun, 6 Feb 2005 16:17:26 -0800 (PST)