The Real Reason the U.S. Invaded Iraq

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Before I begin, I’d like to state a few things. Firstly, I’m not at all a fan of conspiracy theories or tinfoil hats. Secondly, I voted Republican in the last presidential election. So, don’t write this off as being some kind of partisan or loony conspiracy theory. These are just a collection of thoughts and findings.

As an American and as one who voted for our current president, I’ve had a very, very hard time understanding exactly why we went into Iraq and essentially replaced their government with the one it has today. The White House said, repeatedly, that it was about a threat to America. We were told that Iraq had “Weapons of Mass-Destruction” and that Iraq had close — if not direct — ties to Al-Qaeda.

As a nation, we tried to recruit our allies for the cause, but for some reason, the rest of the world wasn’t very interested. Even most of our long-time allies in the EU washed their hands of the situation. We were left with Britain, Italy, Australia, and Japan. But since we happen to have the strongest military in the world at our disposal, and since our national debt is still less than half of our Gross Domestic Product — which means we still had several trillion dollars left on our government’s credit card — we trudged on, almost alone.

In the beginning, I was one of the ones who gave the administration the benefit of the doubt. However, as time went on, we never did dig up any of these WMD�s, nor did we find any ties to Al-Qaeda. This begs the question of why the hell we went there in the first place. I very seriously doubt that our government was so misinformed that we accidentally took over a nation because of bad intelligence. I refuse to believe that the most powerful government in the world has such poor information resources. So why did we do it? Put your tinfoil hat on and bear with me�

We all know that the U.S. is the world�s economic leader, but few people understand how the U.S. maintains its dominance. The answer lies the in the U.S. Dollar. The Dollar is the de facto world reserve currency � it accounts for approximately two thirds of all official exchange reserves. More than four-fifths of all foreign exchange transactions and half of all world exports are denominated in Dollars. In addition, all IMF loans are denominated in Dollars.

But the more dollars there are circulating outside the U.S., or invested by foreign owners in American assets, the more the rest of the world has had to provide the U.S. with goods and services in exchange for these dollars. The dollars cost the U.S. next to nothing to produce, so the fact that the world uses the currency in this way means that the U.S. is importing vast quantities of goods and services virtually for free.

Since so many foreign-owned dollars are not spent on American goods and services, the U.S. is able to run a huge trade deficit year after year without apparently any major economic consequences. The most recently published figures, for example, show that in November of last year U.S. imports were worth 48% more than U.S. exports. No other country can run such a large trade deficit with impunity. The financial media tell us the U.S. is acting as the ‘consumer of last resort’ and the implication is that we should be thankful, but a more enlightening description of this state of affairs would be to say that it is getting a massive interest-free loan from the rest of the world.

However, with Europe�s introduction of the Euro, things are beginning to change. One of the stated economic objectives, and perhaps the primary objective, when setting up the Euro was to turn it into a reserve currency to challenge the Dollar so that Europe too could get something for nothing.

This however would be a disaster for the U.S. Not only would they lose a large part of their annual subsidy of effectively free goods and services, but countries switching to Euro reserves from dollar reserves would bring down the value of the U.S. currency. Imports would start to cost Americans a lot more and as increasing numbers of those holding dollars began to spend them, the U.S. would have to start paying its debts by supplying in goods and services to foreign countries, thus reducing American living standards. As countries and businesses converted their dollar assets into euro assets, the U.S. property and stock market bubbles would, without doubt, burst. The Federal Reserve would no longer be able to print more money to reflate the bubble, as it is currently openly considering doing, because, without lots of eager foreigners prepared to mop them up, a serious inflation would result which, in turn, would make foreigners even more reluctant to hold the U.S. currency and thus heighten the crisis.

There is though one major obstacle to this happening: oil. Oil is not just by far the most important commodity traded internationally, it is the lifeblood of all modern industrialized economies. If you don’t have oil, you have to buy it. And if you want to buy oil on the international markets, you usually have to have dollars. Until recently all OPEC countries agreed to sell their oil for dollars only. So long as this remained the case, the Euro was unlikely to become the major reserve currency: there is not a lot of point in stockpiling euros if every time you need to buy oil you have to change them into dollars. This arrangement also meant that the U.S. effectively part-controlled the entire world oil market: you could only buy oil if you had dollars, and only one country had the right to print dollars – the U.S..

If on the other hand OPEC were to decide to accept euros only for its oil (assuming for a moment it were allowed to make this decision), then American economic dominance would be over. Not only would Europe not need as many dollars anymore, but Japan which imports over 80% of its oil from the Middle East would think it wise to convert a large portion of its dollar assets to Euro assets (Japan is the major subsidizer of the U.S. because it holds so many dollar investments). The U.S. on the other hand, being the world’s largest oil importer would have to run a trade surplus to acquire euros. The conversion from trade deficit to trade surplus would have to be achieved at a time when its property and stock market prices were collapsing and its domestic supplies of oil and gas were contracting. It would be a very painful conversion.

The purely economic arguments for OPEC converting to the euro, at least for a while, seem very strong. The Euro-zone does not run a huge trade deficit nor is it heavily indebted to the rest of the world like the U.S. and interest rates in the Euro-zone are also significantly higher. The Euro-zone has a larger share of world trade than the U.S. and is the Middle East’s main trading partner. And nearly everything you can buy for dollars you can also buy for euros – apart, of course, from oil. Furthermore, if OPEC were to convert their dollar assets to Euro assets and then require payment for oil in Euros, their assets would immediately increase in value, since oil importing countries would be forced to also convert part of their assets, driving the prices up. For OPEC, backing the Euro would be a self-fulfilling prophesy. They could then at some later date move to some other currency, perhaps back to the dollar, and again make huge profits.

Of course, it is not a purely economic decision.

So far only one OPEC country has dared switch to the Euro. In November 2000, Iraq stopped accepting U.S. dollars for their oil. Counted as a purely political move, Saddam Hussein switched the currency required to purchase Iraqi oil to the Euro. Selling oil through the U.N. Oil for Food Program, Iraq converted all of its U.S. dollars in its U.N. account to the Euro. Shortly thereafter, Iraq converted $10 billion in their U.N. reserve fund to the Euro. By the end of 2000, Iraq had abandoned the U.S. dollar completely. There didn�t seem to be much the U.S. could do about it, until 9/11. Suddenly, we saw a saw a crisis in our homeland quickly followed by our fearless leader vowing to get back at the terrorists who attacked us. The �Axis of Evil� was declared. Which country was on the top of the list? Why, Iraq, of course. Two months after the United States invaded Iraq, the Oil for Food Program was ended, the country�s accounts were switch back to dollars, and oil began to be sold once again for U.S. dollars. No longer could the world buy oil from Iraq with the Euro. Universal global dollar supremacy was restored. It is interesting to note that the latest recession that the United States endured began and ended within the same timeframe as when Iraq was trading oil for euros. Whether this is a coincidence or related, we may never know.

One other OPEC country has been talking publicly about possible conversion to the Euro since 1999: Iran � the country listed second on the Axis of Evil and the country whose nuclear program we hear about daily from the mainstream media.

It gets better�

Historically, oil has been traded on two exchanges: New York’s NYMEX and London’s IPE, both of which are owned by American corporations and operate in U.S. Dollars. The Iranians have developed a Euro-based system for oil trade, which when enacted, will once again threaten U.S. dollar supremacy far greater than Iraq�s Euro conversion. It�s called the Iran Oil Bourse � �bourse� is French for �exchange�. An exchange that only accepts the Euro for oil sales would mean that the entire world could begin purchasing oil from any oil-producing nation with Euros instead of Dollars. The Iran Oil Bourse will further the momentum of OPEC to create an alternate currency for oil purchases worldwide. China, Russia, and the European Union are evaluating the Iranian plan to exchange oil for euros, and giving the plan serious consideration.
If you are skeptical regarding the meaning of oil being purchased with Euros versus Dollars, and the devastating impact it will have on the economy of the United States, consider the historic move by the Federal Reserve to begin hiding information pertaining to the U.S. dollar money supply, starting in March 2006. Since 1913, the supply of U.S. dollars was measured and publicly revealed through an index referred to as M-3. M-3 has been the main stable of money supply measurement and transparent disclosure since the Federal Reserve was founded back in 1913. According to Robert McHugh, in his report (What�s the Fed up to with the money supply?), McHugh writes, �On November 10, 2005, shortly after appointing Bernanke to replace Greenspan, the Fed mysteriously announced with little comment and no palatable justification that they will hide M-3 effective March 2006.� Is it coincidence that the Fed began hiding M-3 the same month that Iran was set to launch its Iran Oil Bourse, or is there a direct threat to the stability of the U.S. dollar, the U.S. economy, and the U.S. standard of living? Some have suggested that we are being set up for a collapse in our economy that will make the Great Depression of the 1930�s look like a bounced check.

The plans to invade Iran are unspoken, but unfolding before our very eyes. The media has been reporting on Iran more often, and increasingly harshly. For the U.S. government to justify invading Iran, it must first begin to phase out the War in Iraq, which it is already doing. Next, it must portray the Iranian President, Mahmoud Ahmadinejad, as a threat to the region and the world. Finally, once naive American people are convinced the �Weapons of Mass Destruction� that were to be found in Iraq are actually in Iran, coupled with the almost daily media coverage of Iran�s nuclear power / weapons program aspirations, and what we will soon have on our hands is another fabricated war that will result in tens of thousands of civilian lives being lost

When a wayward and corrupt fiscal policy and fiat currency, coupled with runaway government spending, forces a nation to only be able to sustain the value of its currency with bullets, the citizenry of the country involved in wars primarily to sustain its currency have historically first became slaves to their government, and then to the nations that finally conquer them. If you question the validity of such a premise, or whether it could happen to the United States of America, study the fall of the Roman Empire. If you read the right books on the subject, you�ll quickly discover that towards the end of the Roman reign, the Roman Empire was doing exactly what America is doing today; attempting to sustain a failed fiat money system with military power.

12 comments to “The Real Reason the U.S. Invaded Iraq”

  1. Comment by Chris Brunner:

    Well, that was thoroughly enlightening/depressing.

    -= Chris

  2. Comment by Alex Stram:

    Yeah, I agree.

  3. Comment by sam bledsoe:

    well damnit, i was thinking USA would be a good place to live for a little while… i guess there is hope to pull out of our facist, cancerous nosediving spiral. but not much.

  4. Comment by Jeff PIKE:

    I’ve have been preaching the same message to my family and friends for about a year now. We invaded Iraq under false pretences to protect the petro-dollar. The Amercan people fell for this trick once but I don’t believe the American people will be fooled by the same trick twice. Instead it will have to be more ellaborate. I believe that it is perfectly plausible that the new action taking place in the middle east between hezbollah and Israel is part of an ellaborate plan to bait Iran into an armed conflict with an US ally that we would most certanly rally to defend. This gives the US its war with Iran that we say “we don’t want and can’t win”, and allows the US to delay the Iranian oil bourse though it has been delaying itself. There we have a more ellaborate repeat of Iraq.

  5. Comment by verheyden koenraad:

    Oil(gas) for euro …simply because the euro is evolving into a gold-euro through its ECB (european central bank) that is marking to market its goldreserves.
    Once the world is allowed to know that the past 3 decades of cheap Arabian oil were only possible thanks to the flow of cheap gold to the Saudi Arabia oil-central bank…
    then most will start to understand what the gold-euro really means.

  6. Comment by Donna:

    What an eye opening article. I knew the iraq war was purely oil based. Great read but very frightening.

  7. Comment by Mark:

    Interesting article , however just to pick up on one thing you said:

    “The Euro-zone does not run a huge trade deficit nor is it heavily indebted to the rest of the world like the U.S. and interest rates in the Euro-zone are also significantly higher”

    from looking at different financial site the ECB rate has been lower than the US rate at least for the last year!

  8. Comment by Michael:

    Nice article on the dollar/euro wars.
    One aspect that you did not mention that is quite disturbing is that one of the consequences of the financially irresponsible policies of this administration and our instant gratification oriented populace is that the dollar is teetering on the brink of a major devaluation.
    The ballooning national debt, the bursting housing bubble and the trade deficit are all very serious problems because they make the dollar less stable and attractive. At some point one of our big creditors (China or Japan or Europe) is going to decide that the risk of holding on to all of these devaluing dollars is not worth it, and then there will be a huge sell off as everyone tries to get out before the dollar tanks. Then the reason for using the dollar for the reserve currency will be gone, and with it our special advantages in the world economy.

    On a separate subject: It is always startling when I hear about an otherwise intelligent person who bravely admits to having voted for our asshat in chief. After all, Al Gore may have been lacking in charisma (or even signs of non robotic life), but no one thought he was an idiot. The idea that we could be successfully led by an aging frat boy is a curious fantasy, and hopefully one that is permanently exploded.

  9. Comment by DesmondUK:

    Thanks for very illuminating article.
    Be nice if you could post it on Newsvine.com

  10. Comment by Charlotte:

    As a believer in Christian biblical prophecy, I know the European Union will rise as the world’s last super power after the USA loses that position. I have wondered many times what it would be that would take out the USA as the number one leader of the world. Chris, you answered my question. I’m keeping my attention on Iran with a more informed eye. With the knowledge you supplied here with this blog entry, I now know what to look for when searching for answers concerning the rise of the EU.

    One of the questions I have about the invasion of Iran is will the governments around Iran switch to the euro just to punish America for its obvious upcoming invasion? This idea reminds me a little of the movie Syriana with G. Clooney. Will the USA take out potential leaders who are for switching to the euro just to get back at the USA? We (the USA through the Iraq government) certainly had no problem in hanging Saddam and his followers. Shouldn’t we expect the same harsh treatment in return for our actions?

  11. Comment by Wikileaks: US counterinsurgency training manual | How To Fix America!:

    [...] Then we invade a country under pretenses. [...]

  12. Comment by Gabriel Givens:

    Glenn Beck is allegedly saying his god is telling him to kill people because we’re debating giving free money to rich people. Now this stuff is really starting to make sense to me along with No-NO-NO-NO-NO especially if Mr. G and his friends has been to Satan’s altar and sacrificed their souls to the Devil. One day the sky will burn with fire. Dead bodies will rot in the streets. Flies, spiders, mice, mosquitoes, roaches, and fleas will parade from house to house and every green thing will die-Man will turn to man for food-The Sun will hide his face in sackclothe and the moon will shade in blood- oneday. Stop listening to the Antichrist. We don’t have to bow to the destructive paths of the Satan. God is willing to give us all the time in the world as long as we pretend to try to like one another. But make no mistake God will not hesitate to destroy this world right here and right now! The choice is yours.
    Are you really ready for Hell on Earth.

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