THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume VIII, Issue # 56, March 19, 2006
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
THE ATTACK ON THE U.S DOLLAR
& AMERICA'S ENERGY NEEDS
By Alan Caruba
THE ECONOMIC WAR BEING WAGED AGAINST THE U.S.A. BY AN ENEMY COALITION EXTENDING FROM SOUTH AMERICA TO THE
ISLAMIC MIDDLE EAST -- STRATEGY & LONGTERM GOALS OF AMERICA'S ENEMY IN THE ECONOMIC WAR: CONTROL THE
WORLD'S PETROLEUM SUPPLY & MAKE OIL IMPORTS ALMOST PROHIBITIVELY EXPENSIVE FOR AMERICANS, ELIMINATE
THE U.S. DOLLAR AS THE RESERVE CURRENCY FOR WORLD TRADE, CAUSE DEVALUATION & COLLAPSE OF THE DOLLAR, &
THEREBY UNDERMINE & DESTROY THE AMERICAN ECONOMY -- WHAT THE U.S.A. NEEDS TO DO IN ORDER TO ELIMINATE
THE THREAT: EMBARK ON AN AGGRESSIVE PROGRAM TO FIND & DEVELOP ITS OWN ENERGY SOURCES & TO DEVELOP &
EXPAND ITS OWN PRODUCTION OF LIQUID FUELS, GAS, & FERTILIZERS
FULL STORY:
It’s bad enough that the Middle East has us over a barrel of oil, thanks to our continued dependency on access to its huge
reservoirs of crude oil. But, largely unknown to most Americans, the Organization of the Islamic Conference (OIC) and the Islamic
Development Bank have a longterm goal of replacing the U.S. dollar as the reserve currency for world trade.
In March of 2006, the Iranians will open an Iran Oil Bourse that will trade oil and products in the Euro, not the dollar. They will
not be alone in pegging their nation’s currency to the Euro. Syria already does, and Venezuela, another major oil producer, has
announced plans to do so as well.
As David J. Jonsson, the author of Clash of Ideologies, pointed out in a recent article, the United States of America
“relies on approximately 70 percent of all foreign-exchange currency to be held in dollars because we sell U.S. Treasury debt
into that foreign-exchange market.” A flight of foreign-exchange reserves away from the dollar would depress its value and,
conversely potentially increase the value of the Euro by 20 to 40 percent.
This is extremely bad news for the United States and for the West in general. While Americans focus on the shooting war in
Iraq, we are in an even more serious war, an economic war with an axis that spreads from South America to the Middle East.
Bear in mind that many South American nations have been electing Socialist governments and that some Middle Eastern
nations have flirted with Socialism for decades. The Baathist Party in Saddam Hussein's Iraq is an example of this.
Calls for oil independence in the U.S.A. have been largely ignored for the three decades we have known about the vast
reserves in Alaska’s ANWR or those trapped in shale in Utah and Colorado. Congress has blocked ANWR drilling and in
known offshore reserves, despite the increasingly volatile Middle Eastern situation.
The economy of the United States is, in many ways, quite fragile. Just how broke is America?
A new book, Empire of Debt: The Rise of an Epic Financial Crisis, by Addison Wiggin and Bill Bonner, answers that
question, saying, “It is deeply unpleasant to consider the fact that the U.S. continues to rack up another $80 million of debt
every hour, or that our trade deficit has hit an all time high of $725.8 billion.” That represents a significant vulnerability. The
authors note: “The renowned Levy Institute estimates that the United States will owe foreigners $8 trillion by 2008, a
breathtaking 60 percent of our gross domestic product.“
That level of financial vulnerability is frightening enough, but key elements of our economy are also vulnerable. As Jonsson
points out, the high cost of natural gas, the key component in the production of ammonia and urea, the “fertilizers that drive
the agricultural sector of the United States and the rest of the Western nations,” has caused the shutdown of ammonia
production here and seen it move to nations with lower costs, such as those in the Middle East. Today, more than half of the
urea used for U.S. agricultural production is imported.
In the United Kingdom, nearly a third of its power generation depends on natural gas. In 15 years, the UK will be dependent
on Russia for 90 percent of its imported gas. Japan is almost totally dependent on imported energy sources and is heavily
invested in Iran’s Azadegan oil field. China has major investments in Iran, importing 13.6 percent of its oil requirements from
that nation and, overall, 45 percent of its oil imports from the Middle East. China is also investing in Canadian tar sands
projects.
At present, three-quarters of China’s currency reserves are invested in U.S. Treasury bills and other dollar-dominated assets.
If the U.S. dollar begins to slip in value versus the Euro, guess where China’s money will go. Currently, its reserves “are
growing at an average rate of $15 billion every month.”
The strategy is there for anyone to see. Control the oil and eliminate the U.S. dollar as the world’s currency of choice. The
Islamic-Socialist coalition is well on its way to putting a choke-hold in the New York Mercantile Exchange and London’s
International Petroleum Exchange, currently the world’s leading commodity markets for energy. Jonsson calls it “the
currency bomb.”
About the only good news is that such efforts have been tried in the past and failed. This time, though, European nations
will, thanks to the Iranian Oil Bourse, not have to buy and hold U.S. dollars to secure the payment for oil.
Right now, thanks to the indebtedness of the U.S.A., many in the financial world are anticipating a devaluation of the dollar.
Jonsson believes the dollar could fall as much as 40 percent or more, if devaluation occurs.
If the United States does not embark on an aggressive program to find and develop its own energy sources, and to develop its
own production of liquid fuels, natural gas and fertilizers, it is going to find itself in deep trouble. The good news is that we
have centuries of coal and still untapped oil, and gas hydrates. We could accelerate the building of more nuclear energy
facilities.
We could do much to insure a greater degree of energy independence, if we have the will and foresight to do so. However, the
federal budget for fiscal 2007 “cuts overall funding for natural gas research” in order get the independent oil and natural gas
companies to pick up the tab. “President Bush is proposing to zero out the entire natural gas technology program, which
includes gas hydrates.” This is the same President who told the nation that America is “addicted to oil.”
America is at a critical crossroads for its financial and energy policies and, so far, it appears to be making some very bad
choices. It seems to this observer that it is depending heavily on its military strength to threaten and/or transform the Middle
East. That option may prove to be an illusion, if Iran is permitted to become a nuclear power.
Ultimately, as Jonsson points out, “If regimes like those in Iran, Venezuela, Syria, Burma, Sudan, and Nigeria have the benefit
of $60 oil for ten years, the democratic process, which occurred in post-Cold War years, will end. The totalitarian regimes with
the most repressive governments will control the energy infrastructure and the access to freedom and liberty.”
The American Empire is running out of cheap energy and easily borrowed money.
LINKS TO RELATED TOPICS:
Policy Issues Relating to Energy, Environment,
& Natural Resources
Government & the Economy
Alan Caruba is a veteran business and science writer, a Public Relations Counselor, and Founder of the National Anxiety Center, a
clearinghouse for information about media-driven scare campaigns. Caruba writes a weekly commentary, "Warning Signs," posted
on the Internet website of the National Anxiety Center, which is located at
www.anxietycenter.com.
© Alan Caruba 2006
Published with Permission of Alan Caruba
ACaruba@AOL.Com
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THE PROGRESSIVE CONSERVATIVE, USA
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Dr. Almon Leroy Way, Jr., Editor
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