Do Not Believe The Hype

With the collapse of the USSR and the end of the Cold War, the political and economic power relations that had been in place since the end of World War II were rendered obsolete. What we are observing today is a shift in the global power dynamics, which will eventually align to a new axis of world order.Although the mainstream media channels all over the world have successfully managed to disinform the general public into believing that what has been taking place since the September 11 attacks is a "War On Terror", a growing number of people are starting to suspect that there are other political and economic dimensions to the causes of the 9-11 Attacks, the bombing of Afghanistan, and the current invasion of Iraq.

Ever since the Bretton Woods Agreement of 1944, which established the rules of commerce and financial relations among the major industrial states and the independent nation-states, the US has been enjoying an artificial privilege in the global economy through its ability to adopt the US dollar as the currency of global exchange. When President Nixon liberated the US from the gold standard in 1971, the dollar became the denominator of the world reserve currency, and the global economy became fully dominated by the US dollar at the expense of the rest. Although this fact has been known by those in financial and political circles, it is hardly ever mentioned in the media.

International institutions, such as the IMF and the World Bank, has been giving loans exclusively in dollars up to this day, and thus, the rest of the world has been forced to build their dollar reserves for repayment of debt and international trade for over sixty years. Today, over two thirds of the world trade is conducted in dollars conferring on the US an economic advantage. However, as well as being an advantage, the same system has also created a very fragile US economy that is fully dependent on the faith the rest of the world has in the stability of the dollar.

Analysts know perfectly well that, as strong as the US economy may appear, it could collapse very abruptly if the trust in the stability of the dollar is broken, or if there is an alternative means of pricing instead of the dollar. When the US buys goods and services produced by other countries, the pricing and the payments are made in dollars. As the US does not have a corresponding need to accumulate foreign reserve, it enjoys the privilege of spending more than it earns, and can afford to run a trade deficit year after year, while the rest of the world earns more than it spends as a result of this artificial monetary system. Currently, the huge trade deficit in the US indicates that the US economy has a "need" to "borrow" two billion dollars per day from the rest of the world to keep its economy from collapsing. Naturally, if the dollar remains the dominant global currency, there would not be any risks, and the US could continue to enjoy its privilege without any complications.

On the other hand, any tendency to move away from the dollar towards another currency would spell disaster and would demolish the global hegemony that the US has been enjoying for nearly sixty years.By launching the new euro in 1999, the EU challenged the US in an indirect manner by offering the world an alternative currency to do business in. Although a rapid transition from dollars to euro would be a disaster for virtually every economy in the world, and not even the Europeans would desire such a sudden change, a gradual transition was possible, and perfectly feasible, in the long run. Taking into consideration the possible consequences of the EU's euro challenge for the future of the US, it would be too naive to assume that the economic rivalry between the dollar and the euro would take place without any friction or conflict of interests. The influential players that have a tremendous effect on the outcome of this economic game of chess are the oil and natural gas exporting countries.As early as November 2000, Iraq became the first oil producing country to switch from dollars to euro, and hence, also became the first to experience the wrath of the US military might.

Analysts all over the world recognized that such a disobedience to American hegemony would be severely punished. It would be illogical to assume that the US would simply tolerate Saddam's decision and would risk the possibility of an economic disaster. Allowing Iraq to switch from dollars to euros would send a clear message to the other oil producing economies and that would create a domino effect. It is certainly not a coincidence that the Russian leader Vladimir Putin has announced the "possibility" of selling Russian oil for euros, while Iran has been actively working on the establishment of a new trading market in France for the OPEC and Middle Eastern producers, which could potentially end the dominance that London's International Petroleum Exchange and New York's NYMEX currently enjoy.As the dollar is no longer a stable currency with its more reliable alternative in euro, one can easily see why the "War on Terror" is nothing but a catchy phrase designed to fool the public. The world is on the verge of adopting a new, and perhaps healthier financial structure, and needs to decide how the transition from the old order to the new one will take place.

Regardless of what we are being fed by the mainstream media, there is a rather different reality under the appearances, and what is happening in the world today has nothing to do with Islamic terrorism or jihad. Don't believe the hype!.


By: Candas Emcioglu

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