I originally was going to write about the Chicago set-aside program. Then it dawned on me while pumping gas into my car yesterday, that the dollar is plummeting quicker than Chicago's scandal machine and Monica Lewinsky's knee pads. More suspect things are going on in The Oval Office than Clinton could have ever dream of. President Bush and his "war hawks" would love nothing more than to see Iraq liberated from trading oil with foreign currency. What Bush really wants is a "puppet" government that will permanently revert Iraq to using the dollar.
Why? Because in January of 2002, the dollar had its first serious competitor since WWII, when 12-15 European nations dumped their currency in order to completely embrace the Euro (which today is worth more than the U.S. dollar).
Now the Organization of Petroleum Exporting Countries (OPEC), North Korea, Iran and Russia are threatening to do likewise. When Saddam was still in power, he made the Euro his only WMD on that aforementioned date. That made Iraq a key player in the world economy, but having long gotten rid of his chemical and biological weapons, Saddam was militarily the weakest of the new Euro-spending nations, and therefore was subject to being considered an example before the rest of the world "theater" and taught a lesson.
Folks, the new Cold War is the U.S. dollar vs. the Euro. Oil, though still crucially important, has virtually been reduced to a subplot, and will remain a subplot as long as the dollar continues to fall.
Briefly, a little refresher history lesson on money. The dollar has been used internationally as oil "transaction currency" since 1945. It's not necessarily the consumption of oil that the U.S. benefits from. The dollars are recycled from oil production to treasury bills, stocks, real estate and other assets in the U.S., in pretty much the same way that harvests from poppy fields are processed into opium, morphine, codeine, heroin, cocaine and crack.
Today, OPEC's involvement is key because it takes in some nations in Africa and the Middle East. Since their founding in 1960, the goal has been to control oil production by controlling the cost. For them to adopt the use of the Euro would be extremely costly for The United States of America. According to economist Sonja Ebron: "An OPEC switch from the dollar to the Euro would bring a quick and devastating dollar and Wall Street crash that would make 1929 look like a $50 casino bet."
There are many reasons why the dollar's value can fall. Two of those reasons, the budget deficit and military spending, are directly attributed to President Bush. Remove these reasons and the dollar will stop falling. It would behoove Bush to move on this dollar crisis as quickly as he moved to get Rice that State Department post.
Since the end of the year 2000, the dollar has fallen by more than 15 percent against the Euro. According to the Associated Press, Bush's re-election produced negative international sentiment that is so strong, even the reported improved American economic indicators have had little impact against the dollar's slide.
On Nov. 8, the Euro reached an all-time high of almost $1.30, which brought issues regarding oil prices and U.S. trade and budget deficits to the forefront. The Associated Press quoted French Finance Minister Nicholas Sarkozy telling the U.S. to clean up its act. "The U.S. must cut its budget deficit. This is a unanimous message from Europe and the International Monetary Fund, which we're sending to our American friends."
As it is, your president disdains listening to foreign nations about as much as he hates listening to Colin Powell. You don't need an "actuary" to tell you that any time you spend more than you make, that's a deficit. Maybe Bush could use an actuary to help him understand his "fuzzy math."
Fidel Castro banned the American dollar as of Oct. 25, 2004. The peso will be their primary money. It's not a major hit, but it is a message that people are tired of U.S. vilification, propaganda, threats, and preemptive attacks, and now they're acting on it. That's not good news at all.