Iraq and the hidden euro-dollar wars

Jun 18, 2004 02:00 AM

by F. William Engdahl

Despite the apparent swift US military success in Iraq, the US dollar has yet to benefit as a safe haven currency. This is an unexpected development, as many currency traders had expected the dollar to strengthen on the news of a US victory.
Capital is flowing out of the dollar, largely into the EUR. Many are beginning to ask whether the objective situation of the US economy is far worse than the stock market would suggest. The future of the dollar is far from a minor issue of interest only to banks or currency traders. It stands at the heart of Pax Americana, or as it is called, The American Century, the system of arrangements on which America's role in the world rests.

Yet, even as the dollar is steadily dropping against the EUR after the end of fighting in Iraq, Washington appears to be deliberately worsening the dollar’s fall in public comments. What is taking place is a power game of the highest geopolitical significance, the most fateful perhaps, since the emergence of the United States in 1945 as the World's leading economic power.
The coalition of interests that converged on war against Iraq as a strategic necessity for the United States included not only the vocal and highly visible neo-conservative hawks around the Defence Secretary, Rumsfeld, and his deputy, Paul Wolfowitz. It also included powerful permanent interests, on whose global role American economic influence depends, such as the influential energy sector comprising Halliburton, ExxonMobil, ChevronTexaco and other giant multinationals. It also included the huge American defence industry interests, comprising Boeing, Lockheed-Martin, Raytheon, Northrup-Grumman and others.

The issue for these giant defence and energy conglomerates is not a few fat contracts from the Pentagon to rebuild Iraqi oil facilities and line the pockets of Dick Cheney or others. It is a game for the very continuance of American power in the coming decades of the new Century. That is not to deny that profits are made inthe process, but it is purely a by product of the global strategic issue.
In this power game, least understood is the role of preserving the dollar as the world reserve currency, as a major driving factor contributing to Washington's power calculus over Iraq in the past months. American domination in the World ultimately rests on two pillars -- its overwhelming military superiority, especially on the seas; and its control of World economic flows through the role of the dollar as the World's reserve currency. More and more, it becomes clear that the Iraq war was more about preserving the second pillar -- the dollar role -- than the first. In the dollar role, oil is a strategic factor.

American century: the three phases
If we look back over the period since the end of World War II, we can identify several distinct phases of evolution of the American role in the World.

The first phase, which began in the immediate post-war period 1945-1948 and the onset of Cold War, could be called the Bretton Woods Gold Exchange system, which was relatively tranquil. The United States had emerged from the War clearly as the sole superpower, with a strong industrial base and the largest gold reserves of any nation.
The initial task was to rebuild Western Europe and to create a NATO Atlantic alliance against the Soviet Union. The role of the dollar was directly tied to that of gold. So long as America enjoyed the largest gold reserves, and the US economy was by far the most productive and efficient producer, and the entire Bretton Woods currency structure from the French Franc to the British Pound Sterling and the German Mark was stable.

Dollar credits were extended along with Marshall Plan assistance and credits to finance the rebuilding of war-torn Europe. American companies, among them, the oil multinationals, gained nicely from dominating the trade in the 1950's. Washington even encouraged the creation of the Treaty of Rome in 1958 in order to boost European economic stability and create larger USexport markets into the bargain. For the most part, this initial phase of what Time Magazine’s publisher, Henry Luce, called “The American Century”, was relatively “benign” for both the US and Europe in terms of economic gains. The United States still had the economic flexibility to move.
This was the era of American liberal foreign policy. The United States was the hegemonic power in the Western community of nations. As it commanded overwhelming gold and economic resources compared with Western Europe or Japan and South Korea, the United States could well afford to be open in its trade relations to European and Japanese exports. The trade-off was European and Japanese support for the role of the United Sates during the Cold War. American leadership was based during the 1950's and early 1960's less on direct coercion and more on arriving at consensus, whether in GATT trade rounds or other issues. Organisations of elite groups, such as the Bilderberg meetings, were created to share the evolving consensus between Europe and the United States.

This first, more benign, phase of the American Century came to an end by the early 1970's. The Bretton Woods Gold Exchange began to break down, as Europe got on its feet economically and began to become a strong exporter in the mid-1960's. This growing economic strength in Western Europe coincided with soaring US public deficits as Johnson escalated the tragic war in Vietnam.
Throughout the 1960's, France's de Gaulle began to take its dollar export earnings and demand gold from the US Federal Reserve, which was legal under Bretton Woods at that time. By November 1967 the drain of gold from US and Bank of England vaults had become critical.

The weak link in the Bretton Woods Gold Exchange arrangement was Britain, the "sick man of Europe". The link broke as Sterling was devalued in 1967. That merely accelerated the pressure on the US dollar, as French and other central banks increased their call for US gold in exchange for their dollar reserves. They calculated that, with the soaring war deficits from Vietnam, it was only a matter of months before the United States itself would be forced to devalue against gold, concluding that it was better to get their gold out at a high price.
By May 1971, the drain of US Federal Reserve gold had become alarming, and even the Bank of England joined the French in demanding US gold for their dollars. That was the point when, rather than risk a collapse of the gold reserves of the United States, the Nixon Administration opted to abandon gold entirely, going to a system of floating currencies in August 1971.

The break with gold opened the door to an entirely new phase of the American Century. In this new phase, control over monetary policy was, in effect, privatised, with large international banks such as Citibank, Chase Manhattan or Barclays Bank assuming the role that central banks had in a gold system, but they operated entirely without gold. “Market forces” now could determine the dollar. And they did with a vengeance.
The free floating of the dollar, combined with the 1973 rise in OPEC oil prices by 400 % after the Yom Kippur War, created the basis for a second phase of the American Century, the petrodollar phase.

Recycling petrodollars
Beginning in the mid-1970's, the American Century system of global economic dominance underwent a dramatic change. An Anglo-American oil shock suddenly created an enormous demand for the floating dollar. Oil importing countries from Germany to Argentina or Japan, were all faced with the problem of how to export in dollars to pay their expensive new oil import bills.
The OPEC countries were flooded with new oil dollars. A major share of these oil dollars came to London and New York banks where a new process was instituted. Henry Kissinger termed it, “recycling petrodollars”. The recycling strategy had been discussed already in May 1971 at the Bilderberger meeting in Saltsjoebaden, Sweden. It was presented by the American members of Bilderberg, as detailed in the book Mit der Oelwaffe zur Weltmacht.[1]

OPEC suddenly found itself choking on dollars which it could not use. US and UK banks took the OPEC dollars and relent them as Eurodollar bonds or loans to countries of the Third World desperate to borrow dollars to finance oil imports. The build-up of these petrodollar debts by the late 1970's laid the basis for the Third World debt crisis in the 1980's. Hundreds of billions of dollars were recycled between OPEC, the London and New York banks and back to Third World borrowing countries.
By August 1982, the chain finally broke, and Mexico announced it would likely default on repaying eurodollar loans. The Third World debt crisis began when Paul Volcker and the US Federal Reserve unilaterally hiked US interest rates in late 1979 to try to save the failing dollar. After three years of record high US interest rates, the dollar was "saved", but the entire developing sector was choking economically under usurious US interest rates on their petrodollar loans. To enforce debt repayment, the London and New York banks brought the IMF in to act as a “debt policeman”. Public spending for health, education, welfare was slashed on IMF orders to ensure the banks got timely debt service on their petrodollars.

The petrodollar hegemony phase was an attempt by the United States establishment to slow down its geopolitical decline as the hegemonic centre of the post-war system. The IMF “Washington Consensus” was developed to enforce draconian debt collection on Third World countries, to force them to repay dollar debts, prevent any economic independence from the nations of the South, and keep the US banks and the dollar afloat.
The Trilateral Commission was created by David Rockefeller and others in 1973 in order to take account of the recent emergence of Japan as an industrial giant, and to try to bring Japan into the system. Japan, as a major industrial nation, was a major importer of oil. Japanese trade surpluses from the export of cars and other goods was used to buy oil in dollars. The remaining surplus was invested in US Treasury bonds to earn interest. The G-7 was founded to keep Japan and Western Europe inside the US dollar system.

From time to time during the 1980's, various voices in Japan would call for three currencies -- the dollar, the German mark and the yen -- to share the world reserve role. It never happened. The dollar remained dominant. From a narrow standpoint, the petrodollar phase of hegemony seemed to work. Underneath, it was based on ever-worsening economic decline in living standards across the World, as IMF policies destroyed national economic growth and opened markets for globalising multinationals seeking cheap production by outsourcing in the 1980's and especially the 1990's.
Yet, even in the petrodollar phase, American foreign economic and military policy was dominated by the voices of the traditional liberal consensus. American power depended on negotiating periodic new arrangements in trade or other issues with its allies in Europe, Japan and East Asia.

A petro-EUR rival?
The end of the Cold War and the emergence of a new Single Europe and the European Monetary Union in the early 1990's, began to present an entirely new challenge to the American Century. It took more than a decade after the 1991 Gulf War, for this new challenge to emerge fully-blown. The present Iraq War is only intelligible, as a major battle in the new, third phase of securing American dominance. This phase has already been called, "democratic imperialism", a favourite term of Max Boot and other neo-conservatives.
As events in Iraq suggest, it is not likely to be very democratic, but definitely likely to be imperialist. Unlike the earlier periods after 1945, in the new era, the US freedom to grant concessions to other members of the G-7 is gone. Now raw power is the only vehicle left to maintain American long-term dominance. The best expression of this argument comes from the neo-conservative hawks around Paul Wolfowitz, Richard Perle, William Kristol and others.

The point to stress, however, is that the neo-conservatives enjoy such influence since September 11 because a majority in the US power establishment finds their views useful to advance a new aggressive US role in the World. Rather than work out areas of agreement with European partners, Washington increasingly sees EUR-land as the major strategic threat to American hegemony, especially "Old Europe" of Germany and France. Just as Britain in decline after 1870 resorted to increasingly desperate imperial wars in South Africa and elsewhere, so the United States is using its military might to try to advance what it no longer can achieve by economic means.
Here the dollar is the Achilles heel. With the creation of the EUR over the past five years, an entirely new element has been added to the global system, one which defines what we can call a third phase of the American Century. This phase, in which the latest Iraq war plays a major role, threatens to bring a new, malignant or imperial phase to replace the earlier phases of American hegemony.

The neo-conservatives are open about their imperial agenda, while more traditional US policy voices try to deny it. The economic reality, faced by the dollar at the start of the new Century, defines this new phase in an ominous way. There is a qualitative difference emerging between the two initial phases of the American Century -- that of 1945-1973, and of 1973-1999 -- and the new emerging phase of continued domination in the wake of the 9/11 attacks and the Iraq War.
Post-1945 American power up to now, was predominately that of a hegemony. While a hegemony is the dominant power, in an unequal distribution of power, its power is not generated by coercion alone, but also by consent among its allied powers. This is because the hegemony is compelled to perform certain services to the allies such as military security or regulating world markets for the benefit of the larger group, itself included.
An imperial power has no such obligations to allies, andno the freedom for such, only the raw dictates of how to hold on to its declining power -- what some call "imperial over-stretch". This is the World which neo-conservative hawks around Rumsfeld and Cheney are suggesting America has to dominate, with a policy of pre-emptive wars.

A hidden war between the dollar and the new EUR currency for global hegemony is at the heart of this new phase. To understand the importance of this unspoken battle for currency hegemony, we first must understand that since the emergence of the United States as the dominant global superpower after 1945, its power rested on two un-challengeable pillars.
First, the overwhelming US military superiority over all other rivals. The United States today spends on defence more than three times the total for the entire European Union, some $ 396 bn versus $ 118 bn last year, and more than the next 15 largest nations combined. Washington plans to add $ 2.1 tn over the coming five years on defence. No nation or group of nations can come close in defence spending. China is at least 30 years away from becoming a serious military threat. No one is serious about taking on US military might.

The second pillar of American dominance in the World is the role of the US dollar as reserve currency. Until the advent of the EUR in late 1999, there was no potential challenge to this dollar hegemony in world trade.
The petrodollar has been at the heart of the dollar hegemony since the 1970's. It is strategic to the future of American global pre-dominance in many respects, being as important, if not more so, than the overwhelming military power.

Dollar fiat money
The crucial shift took place when Nixon took the dollar off a fixed gold reserve to float against other currencies. This removed the restraints on printing new dollars. The limit was only how many dollars the rest of the world would take. By their firm agreement with Saudi Arabia, as the largest OPEC oil producer with a swing role. Washington guaranteed that the world's largestcommodity, namely oil, could be purchased on world markets only in dollars. Oil was essential for every nation's economy, being the basis of all transport and much of the industry.
The deal had been fixed in June 1974 by Secretary of State Henry Kissinger, when he established the US-Saudi Arabian Joint Commission on Economic Co-operation. In effect, the US Treasury and New York Federal Reserve “allowed” the Saudi central bank, SAMA, to buy US Treasury bonds with Saudi petrodollars. In 1975, OPEC officially agreed to sell its oil only for dollars. A secret US military agreement to arm Saudi Arabia was the quid pro quo.

Until November 2000, no OPEC country dared violate the dollar price rule. They had little reason to do so as long as the dollar was the strongest currency. But on that date, French and other Euroland members finally convinced Saddam Hussein to defy the United States by selling Iraq's oil-for-food not in dollars, “the enemy currency” as Iraq named it, but only in euros. The euros were on deposit in a special UN account of the leading French bank, BNP Paribas. Radio Liberty of the US State Department ran a short wire on the news but the story was quickly hushed up.[2] This little-noted Iraq move to defy the dollar in favour of the EUR, was in itself insignificant. Yet, if it were to spread, especially at a point the dollar was already weakening, it would have created a panic sale of dollars by foreign central banks and OPEC oil producers.
In the months before the latest Iraq war, hints in this direction were heard from Russia, Iran, Indonesia and even Venezuela. An Iranian OPEC official, Javad Yarjani, delivered a detailed analysis of how OPEC at some future point might sell its oil to the EU for euros not dollars. He spoke in April, 2002 in Oviedo Spain at the invitation of the EU. All indications are that the Iraq war was seized on as the easiest way to deliver a deadly pre-emptive warning to OPEC and others, not to flirt with abandoning the petro-dollar system in favour of one based on the EUR.

Informed banking circles in the City of London and elsewhere in Europe privately confirm the significance of that little-noted Iraq move from petro-dollar to petro-EUR.
“The Iraq move was a declaration of war against the dollar,” one senior London banker told me recently. “As soon as it was clear that Britain and the US had taken Iraq, a great sigh of relief was heard in London City banks. They said privately, ‘now we don't have to worry about that damn EUR threat'”.
Why would something so small be such a strategic threat to London and New York banks, or to the United States itself such that an American President would apparently risk fifty years of good global relations, to make a military attack, whose justification could not be proved to the world?
The answer is the unique role of the petro-dollar to underpin American economic hegemony.

How does it work?
So long as almost 70 % of world trade is transacted in dollars, the dollar is the currency which central banks accumulate as reserves. But central banks, whether in China or Japan or Brazil or Russia, do not simply stack dollars in their vaults. Currencies have one advantage over gold. A central bank can use it to buy the State bonds of the issuer, namely the United States.
Most countries around the World are forced to control trade deficits or face currency collapse. Not the United States. This is because of the dollar’s reserve currency role, which in turn is underpinned by the petrodollar. Every nation needs to obtain dollars to import oil, some more than others. This means their trade targets dollar countries, above all, the US.

Because oil is an essential commodity for every nation, the petrodollar system, which has existed so far, demands the build-up of huge trade surpluses in order to accumulate dollar surpluses. This is the case for every country but one, namely the United States, which controls the dollar and prints it at will or fiat. With the majority of all international trade being transacted in dollars, countries must go abroad to secure the means of payment which they cannot themselves issue.
The entire global trade structure today works around this dynamic, from Russia to China, from Brazil to South Korea and Japan. Everyone aims to maximise dollar surpluses from their export trade. To keep this process going, the United States has agreed to be “importer of last resort” because its entire monetary hegemony depends on this dollar recycling. The central banks of Japan, China, South Korea, Russia and all the rest buy US Treasury securities with their dollars. That in turn allows the United States to have a stable dollar, far lower interest rates, and run a $ 500 bn annual balance of payments deficit with the rest of the world. The Federal Reserve controls the dollar printing presses, and the World needs its dollars. It is as simple as that.

The US foreign debt threat
But after all, it is perhaps not so simple. This is a highly unstable system, as US trade deficits and net debt or liabilities to foreign accounts were well over 22 % of GDP in 2000, and climbing rapidly. The net foreign indebtedness of the United States -- public as well as private -- is beginning to explode ominously. In the past three years since the US stock market collapse and the re-emergence of budget deficits in Washington, the net debt position, according to a recent study by the Pestel Institute in Hanover, has almost doubled. In 1999, the peak of the dot.com bubble frenzy, US net debt to foreigners was some $ 1.4 tn. By the end of this year, it will exceed an estimated $ 3.7 tn!
Prior to 1989, 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. Since the end of the Cold War, the United States has become a net foreign debtor nation to the tune of $ 3.7 tn! This is not what Hilmar Kopper could call “peanuts”.

It does not require much foresight to see the strategic threat of these deficits to the role of the United States. With an annual current account (mainly trade) deficit of some $ 500 bn, some 5 % of GDP, the United States must import or attract at least $ 1.4 bn every day, to avoid a dollar collapse and keep its interest rates low enough to support the debt-burdened corporate economy. That net debt is getting worse at a dramatic pace.
Were France, Germany, Russia and a number of OPEC oil countries now to shift even a small portion of their dollar reserves into the EUR to buy the bonds of Germany or France or the like, the United States would face a strategic crisis beyond any of the post-war period. To pre-empt this threat, was one of the most strategic hidden reasons for the decision to go for “regime change” as it is known, in Iraq. It is as simple and as cold as this. The future of America's sole superpower status depended on pre-empting the threat emerging from Eurasia and Euroland especially. Iraq was and is a chess piece in a far larger strategic game, and one for the highest stakes.

TheEUR threatens the hegemony
When the EUR was launched at the end of the last decade, leading EU government figures, from Deutsche Bank's Norbert Walter to France’s President Chirac went to major holders of dollar reserves -- China, Japan, Russia -- and tried to convince them to shift at least part of their reserves out of dollars and into euros. However, that clashed with the need to devalue the too-high EUR, so German exports could stabilise Euroland growth.
A falling EUR characterised the situation until 2002. Then, with the debacle of the US dot.com bubble bursting, the Enron and WorldCom financial scandals, and the recession in the US, the dollar began to lose its attraction for foreign investors. The EUR gained steadily until the end of 2002. Then, as France and Germany prepared their secret diplomatic strategy to block war in the UN Security Council, rumours surfaced that the central banks of Russia and China had quietly began to dump dollars and buy euros.

The result was a dollar free-fall on the eve of war. The stage was set should Washington lose the Iraq war, or if it turns into a long, bloody debacle. But Washington, the leading New York banks and the higher echelons of the US Establishment clearly knew what was at stake. Iraq was not about ordinary chemical or even nuclear weapons of mass destruction.
The “weapon of mass destruction” was the threat that others would follow Iraq and shift to euros out of dollars, creating mass destruction of the United States' hegemonic economic role in the World. As one economist termed it, an end to the dollar reserve role would be a “catastrophe” for the United States. Interest rates of the Federal Reserve would have to be pushed higher than in 1979 when Paul Volcker raised rates above 17 % to try to stop the collapse of the dollar then.

Few realise that the 1979 dollar crisis was also a direct result of moves by Germany, and France, under Schmidt and Giscard, to defend Europe together with Saudi Arabia and others who began selling US Treasury bonds as a protest against the Carter Administration policy.
It is also worth recalling that after the Volcker dollar rescue, the Reagan Administration, backed by many of today's neo-conservative hawks, began a huge US military defence spending to challenge the Soviet Union.

Eurasia versus the Anglo-American island power
This fight over petro-dollars versus petro-euros, which started in Iraq, is by no means over, despite the apparent victory of the United States in Iraq. The EUR was created by French geopolitical strategists for establishing a multi-polar World after the collapse of the Soviet Union. The aim was to balance the overwhelming dominance of the US in world affairs. Significantly, French strategists rely on a British geopolitical strategist to develop their rival power alternative to the US, namely Sir Halford Mackinder.
This past February, a French intelligence-connected newsletter, Intelligence Online, wrote a piece, “The Strategy Behind Paris-Berlin- Moscow Tie”. Referring to the UN Security Council block of France-Germany-Russia to try to prevent the US-British war moves in Iraq. The Paris report notes the recent efforts of European and other powers to create a counter-power to that of the United States.

Referring to the new ties between France and Germany and, more recently, Putin, they note, “a new logic, and even dynamic seems to have emerged. An alliance between Paris, Moscow and Berlin running from the Atlantic to Asia could foreshadow a limit to US power. For the first time since the beginning of the 20th Century, the notion of a world heartland-the nightmare of British strategists-has crept back into international relations.”[3]
Mackinder, father of British geopolitics, wrote in his remarkable paper, “The Geographical Pivot of History” that the control of the Eurasian heartland, from Normandy in France to Vladivostok, was the only possible threat to oppose the naval supremacy of Britain. British diplomacy until 1914 was based on preventing any such Eurasian threat, that time around the expansion policy of the German Kaiser eastwards with the Baghdad Railway and the Tirpitz German Navy build-up. World War I was the result.

Referring to the ongoing efforts of the British and later Americans to prevent a Eurasian combination as rival, the Paris intelligence report stressed, “That strategic approach (i.e. to create Eurasian heartland unity) lies at the origin of all clashes between Continental powers and maritime powers (UK, US and Japan)... It is Washington's supremacy over the seas that, even now, dictates London's unshakeable support for the US and the alliance between Tony Blair and Bush.”
Another well-connected French journal, Reseau Voltaire.net, wrote on the eve of the Iraq war that the dollar was “The Achilles heel of the USA”.[4] That is an understatement to put it mildly.

Iraq was planned long before
This emerging threat from a French-led EUR policy with Iraq and other countries, led some leading circles in the US policy establishment to begin thinking of pre-empting threats to the Petro-dollar system, well before Bush was even President. While Perle, Wolfowitz and other leading neo-conservatives played a leading role in developing a strategy to preserve the faltering system, a new consensus was shaping which included major elements of traditional Cold War establishment around figures like Rumsfeld and Cheney.
In September 2000, during the campaign, a small Washington think-tank, the Project for a New American Century (PNAC), released a major policy study: “Rebuilding America's Defences: Strategies, Forces and Resources for a New Century”. The report is useful in many areas to better understand present Administration policy.
On Iraq, it states, “The United States has sought for decades to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.”

This PNAC paper is the essential basis for the September 2002 Presidential White Paper, “The National Security Strategy of the United States of America”. The PNAC's paper supports a, “blueprint for maintaining global US pre-eminence, precluding the rise of a great power rival, and shaping the international security order in line with American principles and interests The American Grand Strategy must be pursued as far into the future as possible.” Further, the US must, “discourage advanced industrial nations from challenging our leadership or even aspiring to a larger regional or global role.”
The PNAC membership in 2000 reads like a roster of the Bush Administration today. It included Cheney, his wife Lynne Cheney, neo-conservative Cheney aide, Lewis Libby; Donald Rumsfeld; Rumsfeld’s Deputy Secretary Paul Wolfowitz. It also included NSC Middle East head, Elliott Abrams; John Bolton of the State Department; Richard Perle, and William Kristol. As well, former Lockheed-Martin Vice-President, Bruce Jackson, and ex-CIA head James Woolsey were on board, along with Norman Podhoretz, another founding neo-con.

Woolsey and Podhoretz speak openly of being in “World War IV”. It is becoming increasingly clear to many that the war in Iraq is about preserving a bankrupt American Century model of global dominance. It is also clear that Iraq is not the end. What is not yet clear and must be openly debated around the world is how to replace the failed Petro-dollar order with a just new system for global economic prosperity and security.
Now, as Iraq threatens to explode in internal chaos, it is important to rethink the entire post-war monetary order anew. The present French- German-Russian alliance to create a counterweight to the United States requires not merely a French-led version of the Petro-dollar system. It would continue the bankrupt American Century, merely giving it a French accent, and having euros replace Dollars. That would only continue to destroy living standards across the world, adding to human waste and soaring unemployment in industrial as well as developing nations. We must entirely rethink what began briefly with some economists during the 1998 Asia crisis, the basis of a new monetary system, which supports human development, and does not destroy it.

Footnotes
1. Engdahl, F. William, Mit der Oelwaffe zur Weltmacht, Edition Steinherz, Wiesbaden, 2002. Chapter 9-10 detail the creation and impact of the petrodollar recycling and the secret 1973 Saltsjoebaden meeting in preparing the oil shock.
2. Radio Liberty/RFE press release, Charles Recknagel, “Iraq: Baghdad moves to EUR”, November 1, 2000. The wire was picked up for about 48 hours by CNN and other media and promptly vanished from the headlines. Since William Clark's article, “The real but unspoken reasons for the upcoming Iraq war” appeared in the Internet on February 2, 2003, a lively online discussion of the oil-EUR factor has taken place, but outside occasional references in the London Guardian press, little in mainstream media has been said of this strategic background factor in the Washington decision to go against Iraq.
3. Intelligence Online, no.447: 20/02/2003. “The Strategy Behind Paris-Berlin-Moscow Tie”. Intelligence Online Editor, Guillaume Dasquie, is a French specialist on strategic intelligence and has worked for French intelligence services on the bin Laden case and other investigations. His reference to French Eurasian geopolitics clearly reflects high-level French thinking.
4. Reseau voltaire.net, “Suprematie du dollar: Le Talon d'Achille des USA”, appeared April 4, 2003. It details a French analysis of the vulnerability of the dollar system on the eve of Iraq war.

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