Customer Reviews

Petrodollar Warfare: Oil, Iraq and the Future of the Dollar

5 star:		(15)
4 star:		(3)
3 star:		(3)
2 star:		(0)
1 star:		(0)

 

 

I'd been somewhat skeptical of claims that Bush's Invasion of Iraq had much to do with the dollar versus the euro. After reading "Petrodollar Warfare" I came to understand that the strength of the dollar, and its status as the world reserve currency, came from the fact that it has, in effect, been backed by oil since Nixon went off the gold standard. That is, you can always trade in your dollars at a reasonable exchange rate for the world's most valuable resource, oil. In fact, most countries must buy or trade for dollars to buy oil, propping up the value of the dollar. The International Monetary Fund has been a key enforcer of this dollar monopoly, especially among the poorer countries of the world.

The "warfare" comes from the fact that Saddam Hussein switched his oil sales from dollars to euros in 2000, also that Iran is planning to open an energy market (Bourse) in euros in the spring of 2006. Clark makes a compelling case that "maintaining the dollar as the World Reserve Currency was a major component of the Bush administration's push for the Iraq War". Because of this the US enjoys almost unlimited credit compared to other countries, way beyond its actual economic productivity. Loss of this credit would entail dramatic belt-tightening in the US combined with major inflation, rivaling the Great Depression.

So far Bush's strategy has worked. But there is widespread fear, even by some financial authorities, that this is about to end as US debt spirals into the stratosphere to finance militarization and consumption, not productive investments. Clark points out that China, which recently signed a $70 billion oil and gas deal with Iran, could decide to dump its dollars if the US attacks Iran to head off the new Bourse. However this would shatter both China's industrial expansion and economic globalization as we've come to know it. Opportunity for a more democratic world order would lie in such a crisis, but also extreme risks of global economic depression and/or warfare.

Clark lays out very well the sordid history of US geostrategy related to oil and the Middle East and the developing Peak Oil crisis. But unlike many other books on this subject, he delves deeply into the likely financial crisis, though he does not explain the current strength of the US dollar. He describes sensible measures to prevent this crisis, including adding the euro as a second International Reserve Currency. However, he is not sanguine that much will happen "unless a significant global financial crisis occurs".

Unmentioned by Clark is the push toward a new global currency, and associated banking system, backed only by the actual or anticipated value of energy and other natural and human resources. This would not only enforce Colin Campbell's proposed oil "Depletion Protocol" but would also transform the global economy to work toward sustainable development without ecological or economic collapse.

The people of the United States must regain its democratic control over the large rogue politic which underpins the Bush/Cheney/Wolfowitz administration, which allows for economic warfare disguised as, take your pick: 'war on terror', 'liberation of the Iraqi people', 'the preservation of democracy', etc. ad nauseum. Those in the broader community who understand Peak Oil as the natural limit by which the US economy can grow, also understand what Richard Heinberg aptly describes as the option of "last one standing - The path of competition for remaining resources."

There are other options and William Clarks's book adds considerably to the necessary public debate by which we, the American people, must first understand what is happening, and secondly, assert our values which choose life and freedom. The path is clear and it entails a shift to renewable fuels on a massive scale, huge conservation efforts, and vastly improved energy efficiencies. Its the option to "powerdown." Unfortunately, the time is quickly running out for choosing that path. War with Iran, by Israel, with considerable US backing, may now be inevitable, because of Iran's necessary choice for economic self preservation in the face of US hegemony to preserve the petrodollar. And when the bombs start dropping, we'll be irrevocably locked into World War III. Its time for all of us to become strident, with ourselves in our inanity, each other, and most importantly, with our representatives in Congress.

A few notable quotes from the book:
"Only in the United States and Britain did the majority of people indicate that the campaign against terror was a sincere effort to reduce international terrorism."
"Despite its omnipotent military power and current position as the largest economy in the world, the US has become an increasingly fearful and isolated nation, ... instilled with a belief that America is so vulnerable to a small rogue group of terrorists that it must engage in a worldwide 'war on terror'."
"Before 1985 the United States had been a net creditor, gaining more from its foreign investments than it paid to them in interest on Treasury bonds or other US assets. However,since the end of the cold war, the US has become the world's largest debtor nation."
"The oil price shocks of 1973-1974 and again in 1979 resulted in the formulation of aggressive geostrategic planning that included a US military invasion to gain control over the oil reserves in the Persian Gulf. The origins of the policies become public in 1975, when Henry Kissinger stated the US was prepared to wage war over oil."
"The Middle East is reported to contain approximately 65 percent of the world's 'proven' oil reserves... it is typically accepted as factual that Iraq alone has a reported 11 percent of the world's proven reserves, an estimated 112 billion barrels."
"All objective oil geologists agree that global Peak Oil will occur - the real debate centers around exactly when it will happen."
"Americans must demand that our government begin the long and difficult journey toward energy conservation, the development of renewable energy sources, and sustained balanced budgets that allow real deficit reduction."

This book challenges us to comprehend the macroeconomic motivations of our U.S policy makers over the last 60 years to do two things. 1. Make the U.S. dollar the standard world currency for oil. 2. Ensure that the U.S. can control oil resources in order to sustain this dominance through superpower military superiority. William R. Clark makes a compeling case against our current positions in foreign and economic policies based on the fact that the world's oil supplies have reached peak production and are now in decline. His scenarios are not all bleak and depressing. His solutions for the next generations of energy supply give us some hope that the human species may be sustainable through alternative energy sources and a change in the way we American's squander carbon based fuels.

William Clark has presented a brilliant summary of the painful truth of our economy: that it is propped up, and consistently abused, by the use of the dollar as the world's only pathway to buying oil on the international market. Without Petrodollars our economy would collapse in a pile of debt, and it is the threat of a rival currency that led to the invasion of Iraq, not the nonsensical mythology spun by the Neocons.

There are sane ideas that could put us on a more sustainable economic track, but, as Clark shows, the current administration is doing exactly the opposite. This is a "must read."

I was tempted to give this book only four stars, because as some reviewers suggest, it is mostly a summative work, drawing heavily on several books I have already reviewed, as well as a number of studies and article. In the end I decided to go with five stars because this is the only book I have found that really drew my attention to the turning point in US-Iraq relations: not Gulf I, but rather Iraq's declared intention to break the dollar monopoly and begin trading oil in Euros. Today of course we have Iran, Russia, and Venezuela trading in currencies other than the dollar.

First off, this is one of those rare books where in addition to carefully studying the table of contents, which is superbly devised, almost an executive summary on its own, you should also *first* read the End Notes and also the Afterword by LtCol Karen Kwiatkowski, now retired, who earned lasting recognition for resigning and challenging the lies coming out of the politically-appointed Pentagon officials.

Although this book is labeled by some (who would have us ignore it) as part of the "conspiracy" literature, I find myself reading more and more books in this vein, spanning 9-11, peak oil, corporate personality, and Wall Street-Washington corruption. I have to say, with all humility, if there is one privilege I would claim as the #1 Amazon reviewer of non-fiction, it is the privilege of stating clearly and on the record that this book, and other books in this vein, are NOT conspiracy literature, but rather the survivors, the vanguard that has avoided censorship. This book may not be perfect, it may overstate the case (personally I think Bush is as dim as Feith and did not understand the Euro issue while having a childish mind easily led by Dick Cheney), but it is part of an emerging literature that cannot be denied and must be given full attention.

The book highlights and reminds that we have lost the Republic to four interacting influences: concentrated wealth including perpeptual compounded wealth concealed in corporations improperly given personality rights; a completely corrupt Congress serving corporations rather than the public interest; the end of a free press with five media conglomerates happily practicing perception management on an ignorant and inattentive public; and a Federal Reserve that is not part of the government and not acting in the public interest, but instead creating credit out of thin air, and selling that to the government at a price that is both dear, and unconstitutional.

Having come late to much of this literature, the term "proto-fascism" was new to me, but it fits: Wall Street wealth, plus political corruption, plus a military too eager to follow orders without thinking. I remind all who care to understand a military perspective that General Smedley Butler's book, "War is a Racket," recounts his disdain for being a an "enforcer" for corporations.

The author of this book on petrodollar warfare does an excellent job of recounting the history of the dollar, setting the stage for both the end of the gold standard under Nixon, and the manner in which petrodollars from the 1970's were recycled as loans to the Third World.

There are two really superb charts from other sources in this book, one on page 105 showing "The Lie Factory" led by Dick Cheney and Doug Feith; and another on page 112 showing the claims by Cheney and others about Iraq having Weapons of Mass Destruction (WMD), both before (of course they do) and after (none found).

Today an attack on Iran looms. I have done everything I could as an individual citizen, including a protest package to the Senate, press releases, a fax to the Chief of Naval Operations and the Commandant of the Marine Corps, and a posting at OSS.Net of Howard Bloom's memorandum on a potential nuclear ambush by Iran, and Webster Tarpley's powerpoint on the fragile ground supply line from Kuwait to Baghdad. I share his view that the Siege of Baghdad will make the Siege of Stalingrad look like mercy killings. Think Black Hawk Down times a million.

This is a very fine book. It took me a year to notice it, but I will be more attentive now. New Society Publishers is in my view a national treasure. I admire them and will look forward to reading and reviewing many more books that they publish for the right reasons: to inform citizens and improve society.

The author primarily talks about how economics mixes with oil politics, with a particular focus on the role of the dollar as an international currency in the late 20th century. Nixon took us off the gold standard and Saudia Arabia and the US have since had a close relationship. The author's thesis is that the US will enevitably be faced against Iran and Venezuela because those independent countries threaten the hegemony of the dollar-backed international oil cartel, OPEC. He definitely makes the case and is very interesting. The last 20-30 pages (the conclusion) is repetative and summational, but the rest of the book will hold your attention with well-documented historical facts.

By analyzing the US policies behind the Iraq war, William R. Clark unveils the real reasons behind this illegal (R. Perle) invasion: maintain the US dollar as a world monopoly currency for oil and, in the era of Peak Oil, dominate the region with the world's largest remaining hydrocarbon reserves. The war in Iraq is also a currency war against the euro. S. Hussein's oil had to be paid in euros and a further momentum within OPEC for the euro had to be prevented at all costs.
A swift out of the dollar would force oil consumers to sell dollars for euros, provoking a dollar crash with as a result massive inflation, a possible run on the US banks and unserviceable budget and current account deficits. One of the 2 pillars of the US hegemony (military superiority and the dollar) would crumble.
By the way, Iran is planning a euro-based oil Bourse in Teheran.

At home, the author sees record trade gaps, record levels of financial leverage, of personal debt, of bankruptcies, of budget deficits and abysmal saving rates.
He sees a state governed by authoritarians, by a proto-fascist military-industrial-oil-Congressional complex: a circular relationship between wealth and political influence. An exploding defense budget for and `endless war' against an obscure group of non-state actors is a monumental but highly profitable aberration.

Behind the authoritarians at the helm stands the philosophy of Leo Strauss, a mixture of Carl Schmitt and Friedrich Nietzsche: 'Men can only be united against other people', and `Those who are fit to rule are those who realize that there is no morality and that there is only one natural right - the right of the superior to rule over the inferior.' In other words: war, not peace.

This end-justifies-the -means policies are gladly swallowed by the media monopolies which are divulging manipulated and filtered news and disseminating fear, the greatest ally of tyranny.
Fortunately, we have Internet, the last bastion of free speech and unfiltered news.

The (or, at least, most of the) remedies proposed by the author will be extremely hard to realize:
Nationally, restructuring of campaign financing, a viable energy strategy, massive reallocation of public funds away from military spending, revolutionary change in the political establishment.
Internationally, no pre-emptive wars, non-interference in the internal policies of foreign oil states, a balanced policy regarding Israel, repair the damaged relationship with former allies, fair trade, full participation in multilateral accords, a global monetary reform.

All in all, W. R. Clark has written a powerful, fascinating, disturbing but frank book.
A must read for all those interested in the future of mankind.

I also recommend the works of W. Engdahl, W.G. Tarpley, W. Klare and J.Dale Scott.

I thought this book was going to be mainly a simple expose' of our reason(s) for invading Iraq. I was wrong, it is so much more. It ties together so many factors that are changing the world today. I understand a lot more about the "games" going on in the world after reading this book. I am really impressed with the scope of the book and extensive endnotes. I have researched Peak Oil and Petrodollar recyclying so I was afraid this book would just be more of the same; It is not. It is well written and full of facts. I give it a big THUMBS UP!

I write this review to commend Mr. Clark on his rigorous approach to his subject. A prior reviewer suggests that Petrodollar Warfare is an inferior offshoot of the excellent book by William Engdahl. I would counter that, unlike Engdahl, Clark is detailed in citing the data that back up his claims. Indeed, my main objection to Petrodollar Warfare is that in too many places Clark cited a source, which I found to be Engdahl. Subsequent searches of A Century Of War--the primary source cited by Clark--turned out to have no specific data source for the original claim. Searches of other sources lead me to believe most of Engdahl's claims. However, when you're arguing for an alternative version of the history of a century, an author needs academic precision, not mere journalistic "take my word for it." Engdahl's book is outstanding, but Clark's scholarship is more credible because it is so thorough.

In this book Mr. Clark seems to want to try to make several cases at once. As such what could be a clear presentation of an interesting possibility comes across as just more Bush hatred.

Judging from the title of the book, Mr. Clark's main emphasis is that continuing to have oil priced in dollars rather than spreading the standard pricing out to other currencies such as Euro's was a major cause of the decision to invade Iraq. This is a very interesting point and should receive greater emphasis.

In chapter 2, US Geostategy and the Persian Gulf, he talks about the history of the US relations with that region. I don't find much about dollar vs. Euro in this chapter.

Chapter 3 is an excellent introduction to the peak in global oil production which is as he says is the Millennium's Greatest Challenge. He's clearly right there, but this goes far beyond dollar vs. Euro. It has the potential for massive starvation, end of private automobiles, all kinds of things.

Chapter 4 is called Manifest Subterfuge. Here he is almost ranting and raving that the Bush administration deliberately lied in his reasons for going to war in Iraq. He has a chart for instance of part of the organization chart of the government that he calls the 'Lie Factory.' There's no possibility in Mr. Clark's mind that the case for weapons of mass destruction was simply a mistake. For another view you might want to read the article in the Atlantic Monthly, January/February 2004 issue. In this article entitled 'Spies, Lies, and Weapons: What Went Wrong' by Kennety Pollack, a leading Iraq expert from the Clinton administration gives another account of how we erred. He says that every intelligence agency in the world was convinced that Iraq had WMD's. Note that this was from the Clinton administration, and he says that they considered invading Iraq as well. I wonder if in Mr. Clark's view, a liberal like Clinton would be better than Bush doing the same thing.

I do recommend this book, I just wish it were not quite so strident. We need to have all points of view brought out as we enter a troubled future.