Saddams Revenge

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A Middle East plan, to dump Dollars for Euros, authored by Saddam Hussein, could devastate the US economy. After defeating the ruthless dictator, the US may be faced with a far more threatening opponent in the Middle East: the Euro. Currently, just about every nation on earth uses US Dollars to purchase oil from the Arab oil-producing countries. But now, thanks to a plan crafted by the former Iraqi dictator before he was driven from power, the Dollar’s acceptance in the Middle East may soon end with potentially disastrous consequences for the US economy. In November 2000, on a quest to sabotage America’s economic prestige over the rest of the world, Saddam Hussein openly and defiantly stopped accepting US greenbacks for Iraq’s oil exports, demanding payment in Euros. Now, several other Arab countries have divulged that they too, may soon be demanding payment in Euros. Said one insider, “The Federal Reserve’s greatest nightmare is that OPEC will switch its international transactions from a Dollar standard to a Euro standard.” The effect of an OPEC shift to the Euro would be that oil consuming nations would have to flush Dollars out of their central bank reserve funds and then replace them with Euros. Nearly two-thirds of world trade is Dollar denominated, while notably two-thirds of the Central Banks’ foreign exchange reserves are also denominated in Dollars. If the foreign central banks need to sell their Dollars in order for them to buy Euros for their oil purchases, we could see trillions of Dollars dumped on the market, decimating the Dollar’s value, crashing the stock market, and wiping out the value of every savings account and pension fund in America. For many decades the United States has been able to finance its burgeoning social entitlement programs by simply turning on the Government presses and printing all of the bonds necessary for the Federal Reserve to create the additional money needed. Throughout most of history, countries that choose to inflate their money supply in this manner, create severe domestic inflation. Yet because America imports a staggering 41 billion Dollars more goods each month than it exports, hundreds of billions of US Dollars leave the country each year, never to return. Much of the cash winds up in the vaults of central banks around the world, where it is held until needed for vast oil purchases. The conversion to the Euro will effectively end the US’s ability to indefinitely float loans to itself by printing money, which then leaves the US, and never returns to compete with domestically circulating Dollars for US goods and services. So while we were anticipating Saddam to deploy chemical or biological weapons, a new oil currency was the one weapon of mass destruction many did not expect. Hopefully, the US invasion of Iraq served as the warning shot for the rest of the OPEC nations to rethink their plan to abandon the US Dollar for the Euro. Perhaps that was what the war was really all about.

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