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Oil, money, war and geopolitics

some articles of interest with URLs as Iran and other countries are 
about to switch from petrodollars to petroeuros:

End of the Petro-dollar? (Excerpt)
by William Norman Grigg
March 6, 2006

Is Tehran about to deploy an economic weapon potentially more deadly 
than a nuclear bomb?

If Iran is years away from developing a nuclear weapon, why is 
Washington girding for war within a matter of months, or weeks? Some 
economic analysts believe that the real weapon of mass destruction 
Tehran is preparing to deploy is not a nuclear bomb, but rather the 
proposed Iranian Oil Bourse (IOB), which is scheduled to open in 

The IOB, writes Dr. Krassimir Petrov of the American University in 
Bulgaria, will be a petroleum commodity market "based on a euro-oil-
trading mechanism that naturally implies payment for oil in euro," 
rather than in dollars. This would constitute a direct challenge to 
the "petro-dollar" economy that has existed since the mid-1970s.

In 1971, notes Dr. Petrov, the Nixon administration severed the last 
remaining link between the dollar and gold. From that point, "the 
United States had to force the world to continue to accept ever-
depreciating dollars in exchange for economic goods and to have the 
world hold more and more of those depreciating dollars. It had to 
give the world an economic reason to hold them, and that reason was 
oil." The link between the dollar and oil, Petrov asserts, resulted 
from "an iron-clad arrangement with Saudi Arabia to support the 
House of Saud in exchange for accepting only US Dollars for its oil."

F. William Engdahl, author of A Century of War: Anglo-American 
Politics and the New World Order, describes the U.S.-Saudi pact in 

By their firm agreement with Saudi Arabia, as the largest OPEC oil 
producer,... Washington guaranteed that the world's largest 
commodity, oil, essential for every nation's economy, the basis of 
all transport and much of the industrial economy,... could only be 
purchased in world markets in dollars. The deal [was] fixed in June 
1974 by Secretary of State Henry Kissinger, establishing the US-
Saudi Arabian Joint Commission on Economic Cooperation. The US 
Treasury and the New York Federal Reserve would "allow" 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.

"The economic essence of this arrangement," points out Dr. 
Petrov, "was that the dollar was now backed by oil." The emergence 
of an alternative petroleum market setting the price in a different 
currency, such as the euro, would cause a rapid flight from the 
greenback. Should the IOB go into operation, Petrov predicts, "it 
will eagerly be embraced by major economic powers and will 
precipitate the demise of the dollar."

Petrov, Engdahl, and other analysts point out that in 2000, Saddam 
Hussein began to demand euros, rather than dollars, for his oil 
exports; once Saddam was deposed, Iraq's oil exports were once again 
sold in dollars. This illustrates that the war in Iraq "was not 
about Saddam's nuclear capabilities, about defending human rights, 
about spreading democracy or even about seizing oil fields; it was 
about defending the dollar," Petrov concludes.

Other analysts aren't entirely convinced.

found at


Iran/Venezuela Declares Economic War On US
Contributed by: Diogenes

It might be in Canada's interest to be up on this 

Iran/Venezuela Declares 
Economic War On US

By Ed Haas
Muckraker Report

During a recent visit to Caracas, Venezuela, Iranian parliamentary 
speaker Gholam Ali Hadad Adel said U.S. opposition to Iran's nuclear 
program was "only a pretext." "They are worried that we want to be 
independent," Hadad Adel said through an interpreter.[1] Adel was 
kind to use the word "pretext". A more direct statement by Adel 
would have been to say that U.S. opposition to Iran's nuclear 
program is more of the same hardliner propaganda coming out of the 
Bush Administration, meant to drum up public support for additional 
Bush Administration sponsored, pre-emptive strikes against nations 
that dare to abandon the U.S. dollar in favor of the euro or any 
other foreign currency. 

Why else would Adel say that the U.S. opposition to Iran's nuclear 
program was "only a pretext" if he didn't possess full knowledge of 
what he believed to be the real reason why the Bush Administration 
and its supporters in the U.S. Congress have suddenly gotten 
themselves all hot and bothered over a nuclear program that has been 
in play for decades and is by many accounts, at least ten more years 
away from being able to produce even a single nuclear weapon? What 
did Adel mean when he said that "they are worried that we want to be 
independent" when Iran is already an independent country? No foreign 
army is presently occupying Iran. It holds elections. In 2000, the 
U.S. applauded when the Iranian people elected reformists to the 
Iranian Parliament. In 2004, the Bush Administration, the spread 
democracy by spraying bullets administration, frowned when those 
same Iranian voters elected the resurgent conservatives into power 
once again. The point here is that Iran is already independent by 
all accounts, so what did Adel mean when he said that the Bush 
Administration and its NEO-CON supporters are worried that Iran 
wants to be independent? 

When mining alternative media sources (the mainstream media in the 
United States is not and will not report this information) to catch 
a glimpse of what Iran is attempting to become independent of, the 
only plausible explanation to be uncovered suggests that Iran wants 
to become independent of the U.S. dollar. It is of great importance 
to understand that only those countries that are adversarial to the 
U.S. dollar have earned the scorn of Bush's Global, Big Brother 

Iraq stopped using U.S. dollars in 2000 under the U.N. monitored Oil 
for Food Program. Two months after the U.S. invaded Iraq, all 
purchases of Iraqi oil were returned to petrodollars once again. 
Venezuela President Hugo Chavez, who is considered a dangerous 
adversary by the Bush Administration, has declared war on the U.S. 
dollar. In October 2005, Chavez announced that Venezuela was ready 
to move the county's foreign-exchange holdings out of the dollar and 
into the euro.[2] 

Now Iran and Venezuela have joined together to gain independence 
from the U.S. Dollar. Chavez supports the opening of the Iran Oil 
Bourse on March 20, 2006. The Iran Oil Bourse will challenge U.S. 
dollar supremacy in global oil market transactions executed on the 
New York Mercantile Exchange and London's International Petroleum 
Exchange by creating the opportunity for countries to shift foreign-
exchange holdings out of dollars and into euros or other currencies. 

found at


Petrodollars and Nuclear Weapons Proliferation: Understanding the 
Planned Assault on Iran

By Michael Keefer
February 10, 2006
From... GlobalResearch.caIran has been in the gun-sights of George 
W. Bush and his entourage from the moment that he was parachuted 
into the presidency in November 2000 by his father's Supreme Court. 

A year ago there were signs, duly reported by Seymour Hersh and 
others, that the United States and Israel were working out the 
targeting details of an aerial attack on Iran that it was 
anticipated would occur in June 2005 (see Hersh, Gush Shalom, 
Jensen). But as Michel Chossudovsky wrote in May 2005, widespread 
reports that George W. Bush had "signed off on" an attack on Iran 
did not signify that the attack would necessarily occur during the 
summer of 2005: what the `signing off' suggested was rather "that 
the US and Israel [were] `in a state of readiness' and [were] 
prepared to launch an attack by June or at a later date. In other 
words, the decision to launch the attack [had] not been made" 
(Chossudovsky: May 2005). 

Since December 2005, however, there have been much firmer 
indications both that the planned attack will go ahead in late March 
2006, and also that the Cheney-Bush administration intends it to 
involve the use of nuclear weapons. 

It is important to understand the nature and scale of the war crimes 
that are being planned—and no less important to recognize that, as 
in the case of the Bush regime's assault on Iraq, the pretexts being 
advanced to legitimize this intended aggression are entirely 
fraudulent. Unless the lurid fantasies of people like former 
Undersecretary for Arms Control and International Security and now 
Ambassador to the United Nations John Bolton count as evidence—and 
Bolton's pronouncements on the weaponry supposedly possessed by 
Iraq, North Korea, Cuba and Venezuela show him to be less acquainted 
with truth than Jean Harlow was with chastity—there is no evidence 
that Iran has or has ever had any nuclear weapons development 
program. Claims to the contrary, however loudly they may have been 
trumpeted by Fox News, CNN, or The New York Times, are demonstrably 

Nor does there appear to be the remotest possibility, whatever 
desperate measures the Iranian government might be frightened into 
by American and Israeli threats of pre-emptive attacks, that Iran 
would be able to produce nuclear weapons in the near future. On 
August 2, 2005, The Washington Post reported that according to the 
most recent National Intelligence Estimate (NIE), which represents a 
consensus arrived at among U.S. intelligence agencies, "Iran is 
about a decade away from manufacturing the key ingredient for a 
nuclear weapon, roughly doubling the previous estimate of five 
years" (Linzer, quoted by Clark, 28 Jan. 2006). 

The coming attack on Iran has nothing whatsoever to do with concerns 
about the proliferation of nuclear weapons. Its primary motive, as 
oil analyst William Clark has argued, is rather a determination to 
ensure that the U.S. dollar remains the sole world currency for oil 
trading. Iran plans in March 2006 to open a Teheran Oil Bourse in 
which all trading will be carried out in Euros. This poses a direct 
threat to the status of the U.S. dollar as the principal world 
reserve currency—and hence also to a trading system in which massive 
U.S. trade deficits are paid for with paper money whose accepted 
value resides, as Krassimir Petrov notes, in its being the currency 
in which international oil trades are denominated. (U.S. dollars are 
effectively exchangeable for oil in somewhat the same way that, 
prior to 1971, they were at least in theory exchangeable for gold.) 

But not only is this planned aggression unconnected to any actual 
concern over Iranian nuclear weapons. There is in fact some reason 
to think that the preparations for it have involved deliberate 
violations by the Bush neo-conservatives of anti-proliferation 
protocols (and also, necessarily, of U.S. law), and that their long-
term planning, in which Turkey's consent to the aggression is a 
necessary part, has involved a deliberate transfer of nuclear 
weapons technology to Turkey as a part of the pay-off. 

Prior to her public exposure by Karl Rove, Lewis `Scooter' Libby, 
and other senior administration officials in July 2003, CIA agent 
Valerie Plame was reportedly involved in undercover anti-
proliferation work focused on transfers of nuclear technology to 
Turkey that were being carried out by a network of crooked 
businessmen, arms dealers, and `rogue' officials within the U.S. 
government. The leaking of Plame's identity as a CIA agent was 
undoubtedly an act of revenge for her husband Joseph Wilson's public 
revelation that one of the key claims used to legitimize the 
invasion of Iraq, Saddam Hussein's supposed acquisition of uranium 
ore from Niger, was known by the Bush regime to be groundless. But 
Plame's exposure also conveniently put an end to her investigative 
work. Some of the senior administration officials responsible for 
that crime of state have long-term diplomatic and military 
connections to Turkey, and all of them have been employed in what 
might be called (with a nod to ex-White House speechwriter David 
Frum) the Cheney-Bolton Axis of Aggression. Thanks to the courage 
and integrity of former FBI translator Sibel Edmonds, there is 
evidence dating from 2002 of high-level involvement in the 
subversion of FBI investigations into arms trafficking with Turkey. 
The leaking of Valerie Plame's identity as a CIA agent may therefore 
have been not merely an act of revenge for her husband's 
contribution to the delegitimizing of one war of aggression, but 
also a tactical maneuver in preparation for the next one. 

George W. Bush made clear his aggressive intentions in relation to 
Iran in his 2002 State of the Union address; and his regime's record 
on issues of nuclear proliferation has been, to put it mildly, 
equivocal. If, as seems plausible, Bush's diplomats had been 
secretly arranging that Turkey's reward for connivance in an attack 
on Iran should include its future admission into the charmed circle 
of nuclear powers, then the meddling interference of servants of the 
state who, like Plame and Edmonds, were putting themselves or at 
least their careers at risk in the cause of preventing nuclear 
weapons proliferation, was not to be tolerated. 

The ironies are glaring. The U.S. government is contemplating an 
unprovoked attack upon Iran that will involve "pre-emptive" use of 
nuclear weapons against a non-nuclear-weapons-holding state. 
Although the pretext is that this is necessary to forestall nuclear 
weapons proliferation, there is evidence to suggest that planning 
for the attack has involved, very precisely, nuclear weapons 
proliferation by the United States. 

It would appear that this sinister complex of criminality involves 
one further twist. There have been indications that the planned 
attack may be immediately preceded (and of course `legitimized') by 
another 9/11-type event within the U.S. 

Let us review these issues in sequence. 

Plans for a conventional and `tactical' nuclear attack on Iran

On August 1, 2005 Philip Giraldi, an ex-CIA agent and associate of 
Vincent Cannistraro (the former head of the CIA's counter-
intelligence operations and former intelligence director at the 
National Security Council), published an article entitled "Deep 
Background" in The American Conservative. The first section of this 
article carried the following headline: "In Washington it is hardly 
a secret that the same people in and around the administration who 
brought you Iraq are preparing to do the same for Iran." I quote the 
first section of Giraldi's article in its entirety: 

"The Pentagon, acting under instructions from Vice President Dick 
Cheney's office, has tasked the United States Strategic Command 
(STRATCOM) with drawing up a contingency plan to be employed in 
response to another 9/11-type terrorist attack on the United States. 
The plan includes a large-scale air assault on Iran employing both 
conventional and tactical nuclear weapons. Within Iran there are 
more than 450 major strategic targets, including numerous suspected 
nuclear-weapons-program development sites. Many of the targets are 
hardened or are deep underground and could not be taken out by 
conventional weapons, hence the nuclear option. As in the case of 
Iraq, the response is not conditional on Iran actually being 
involved in the act of terrorism directed against the United States. 
Several senior Air Force officers involved in the planning are 
reportedly appalled at the implications of what they are doing—that 
Iran is being set up for an unprovoked nuclear attack—but no one is 
prepared to damage his career by posing any objections." 

The implications of this report are breathtaking. First, it 
indicates on the part of the ruling Cheney faction within the 
American state a frank in-house acknowledgment that their often-
repeated public claims of a connection between Saddam Hussein's 
regime and the 9/11 attacks are the rubbish that informed people 
have long known them to be. 

At a deeper level, it implies that "9/11-type terrorist attacks" are 
recognized in Cheney's office and the Pentagon as appropriate means 
of legitimizing wars of aggression against any country selected for 
that treatment by the regime and its corporate propaganda-
amplification system. (Though the implicit acknowledgment is 
shocking, the fact itself should come as no surprise, since recent 
research has shown that the Bush administration was deeply 
implicated not merely in permitting the attacks of September 11, 
2001 to happen, but in actually organizing them: see Chossudovsky 
2002: 51-63, 144-56; Chossudovsky 2005: 51-62, 135-46, 237-61; 
Griffin 2004: 127-46, 169-201; Griffin 2005: 115-35, 277-91; Marrs 
134-37; and Ruppert 309-436.) 

And finally, Giraldi's report suggests that the recent U.S. 
development of comparatively low-yield nuclear weapons specifically 
designed to destroy hardened underground facilities, and the recent 
re-orientation of U.S. nuclear policy to include first-strike or pre-
emptive nuclear attacks on non-nuclear powers, were both part of 
long-range planning for a war on Iran. 

Articles published by William Arkin in the Washington Post in May 
and October 2005 reported on what the U.S. military's STRATCOM calls 
CONPLAN 8022, a global plan for bombing and missile attacks 
involving "a nuclear option" anywhere in the world that was tested 
in an exercise that began on November 1, 2005; the scenario for this 
exercise scripted a dirty-bomb attack on Mobile, Alabama to which 
STRATCOM responded with nuclear and conventional strikes on an 
unnamed east-Asian country that was transparently meant for North 

Jorge Hirsch has outlined the deployment of key administrative 
personnel and of ideological legitimations in preparation for a 
nuclear attack on Iran (Hirsch, 16 Dec. 2005). And Michel 
Chossudovsky has described the command structure that has been set 
up to implement STRATCOM's current plans for preemptive `theatre' 
nuclear warfare (see Chossudovsky 2006). But it must be emphasized 
that these plans, as tested in November 2005 in the exercise 
referred to by Arkin, involve the creation of an impression of what 
theorists of nuclear war call "proportionality." An attack on Iran, 
which would presumably involve the use of significant numbers of 
extremely `dirty' earth-penetrating nuclear bombs, might well be 
made to follow a dirty-bomb attack on the United States, which would 
be represented in the media as having been carried out by Iranian 

Yet as Giraldi indicates, although the bombing of Iran would follow 
and be represented as a response to "another 9/11-type terrorist 
attack on the United States," the planned pattern involves a cynical 
separation of appearance from reality: "the response is not 
conditional on Iran actually being involved in [this] act of 

Earth-Penetrator `dirty bombs

Talk about "low-yield" nuclear weapons, by the way, means simply 
that the most recent U.S. nuclear weapons can be set to detonate 
with much less than their maximum explosive force. The maximum power 
of the B61-11 earth-penetrating "bunker-buster" bomb ranges, by 
different accounts, from 300 to 340 or 400 kilotons (see Nelson; 
Hirsch, 9 Jan. 2006). (By way of comparison, the bomb dropped on 
Hiroshima in August, 1945, killing some 80,000 people outright, and 
a further 60,000 over the next several months due to radiation 
poisoning and other injuries, had a yield of 15 kilotons.) The 
lowest-yield setting of the BL61-11 is reportedly 0.3 kilotons—
equivalent, that is to say, to the detonation of 300 tons of TNT. 

But since these new weapons are designed as earth-
penetrating "bunker-buster" rather than air-burst bombs, each one 
can be expected to produce large volumes of very `dirty' radioactive 
fallout. Robert Nelson of the Federation of American Scientists 
writes that even at the low end of the B61-11 bomb's yield 
range, "the nuclear blast will simply blow out a huge crater of 
radioactive material, creating a lethal gamma-radiation field over a 
large area." The very intense local fallout will include 
both "radioactivity from the fission products" and also "large 
amounts of dirt and debris [that] has been exposed to the intense 
neutron flux from the nuclear detonation"; the blast cloud produced 
by such a bomb "typically consists of a narrow column and a broad 
base surge of air filled with radioactive dust which expands to a 
radius of over a mile for a 5 kiloton explosion." 

Yet wouldn't the "tactical" and "low-yield" nature of these weapons 
mean that civilian casualties could be kept to a minimum? A study 
published in 2005 by the National Research Council on the Effects of 
Nuclear Earth-Penetrator and Other Weapons offers estimates of the 
casualties that could be caused by these weapons. According to 
Conclusion 6 of this report, an attack in or near a densely 
populated urban area could be expected, depending on the B61-11's 
yield setting, to kill from several thousand to over a million 
people. An attack in a remote, lightly populated area might kill as 
few as several hundred people—or, with a high-yield setting and 
unfavourable winds, hundreds of thousands. 

But what kinds of yield settings might the U.S. military want to 
use? Conclusion 5 of the NRC report might seem to suggest that 
genuinely low-yield settings might be possible: the yield 
required "to destroy a hard and deeply buried target is reduced by a 
factor of 15 to 25 by enhanced ground-shock coupling if the weapon 
is detonated a few meters below the surface." Conclusion 2, however, 
is more sobering. To have a high probability of destroying a 
facility 200 metres underground, an earth-penetrating weapon with a 
yield of 300 kilotons would be required—that is to say, a weapon 
with twenty times the explosive power of the Hiroshima bomb. 
Extrapolating from the information the report provides, one might 
guess that a weapon in the 7-8 kiloton range—with half the power of 
the Hiroshima bomb—could be deployed against a facility like Natanz, 
the sensitive parts of which are buried 18 metres underground and 
protected by reinforced concrete (Beeston). A similar or smaller 
weapon might be used against the uranium fuel enrichment facility at 
Esfahan—a city of two million people which is also, by the way, a 
UNESCO World Heritage City. 

The NRC report, it should be noted, was written by a committee, and 
one that on the issue of civilian casualties seems to have had some 
difficulty in making up its collective mind. Conclusion 4 of the 
report informs us that "For the same yield and weather conditions, 
the number of casualties from an earth-penetrator weapon detonated 
at a few meters depth is, for all practical purposes, equal to that 
from a surface burst of the same weapon yield." But Conclusion 7 
tells a different story: "For urban targets, civilian casualties 
from nuclear earth-penetrator weapons are reduced by a factor of 2 
to 10 compared with those from a surface burst having 25 times the 

The most charitable interpretation I can give to Conclusion 7 is 
that it was composed for a readership of arithmetical illiterates—
who the authors assume will be unable to deduce that what is 
actually being said (assuming a linear relation between yield and 
casualties) is that an earth-penetrating weapon will cause from 2.5 
to 12.5 times more casualties than a surface-burst weapon of the 
same explosive power. 

In light of the fact that the NRC report was commissioned by the 
United States Congress, we can ourselves conclude that the U.S. 
government is contemplating, open-eyed, a war of aggression that 
American planners are fully aware will kill—at the very least—many 
tens of thousands, and perhaps many hundreds of thousands of 

The pretexts

The principal reason being advanced for an attack upon Iran is the 
claim that Iran is on the verge of becoming a nuclear threat with 
the capacity and presumably the intention of launching nuclear 
ballistic-missile attacks upon Israel and even western Europe and 
the United States. 

Iran does possess ballistic missiles, including the Shahab-3, which 
with a range of 1300 kilometers is capable of striking Israel, as 
well as U.S. forces throughout the Middle East. (Why Iran would 
dream of initiating military aggression against the U.S. or against 
Israel, which possesses an arsenal of some 200 nuclear warheads, 
together with multiple means of delivering them, including ballistic 
missiles, is not explained.) 

A fear-mongering article published by The Guardian on January 4, 
2006, included the information that the next generation of the 
Shahab missile "should be capable of reaching Austria and Italy." 
The leading sentence of this same article declares that "The Iranian 
government has been successfully scouring Europe for the 
sophisticated equipment needed to develop a nuclear bomb, according 
to the latest western assessment of the country's weapons 
programmes" (Cobain and Traynor). But neither this article nor a 
companion piece (Traynor and Cobain) published the same day provides 
any evidence that Iran actually has a nuclear weapons program, even 
though both articles were based upon a "report from a leading EU 
intelligence service," a "55-page intelligence assessment, dated 
July 1 2005, [that] draws upon material gathered by British, French, 
German and Belgian agencies." 

There is in fact very good evidence, in the form of exhaustive 
inspections by the International Atomic Energy Agency since 2003, 
that Iran does not have and has never had any such program. As the 
physicist Gordon Prather wrote in September 2005, "after two years 
of go-anywhere, see-anything inspections, [the IAEA] has found no 
indication that any special nuclear materials or activities 
involving them are being—or have been—used in furtherance of a 
military purpose" (Prather, 27 Sept. 2005). 

But what about intentions? The Guardian journalists inform us 
that "western leaders … have long refused to believe Tehran's 
insistence that it is not interested in developing nuclear weapons 
and is only trying to develop nuclear power for electricity" (Cobain 
and Traynor). Perhaps it is time these "western leaders"—George W. 
Bush, Tony Blair, and whatever rag-tag and bob-tail of lesser 
luminaries they are dragging after them—began to attend to the 

A good place to start might be with William Beeman's and Thomas 
Stauffer's assessment of the physical evidence for an Iranian 
nuclear weapons program. (Stauffer, by the way, is a former nuclear 
engineer and specialist in Middle Eastern energy economics; Beeman 
directs Brown University's Middle East Studies program; both have 
conducted research on Iran for three decades.) Beeman and Stauffer 
note that Iran has three principal nuclear facilities. 

Of the first two, a uranium enrichment plant in Natanz and a 
deuterium research facility in Arak, they remark that "Neither is in 
operation. The only question of interest is whether these facilities 
offer a plausible route to the manufacture of plutonium-based 
nuclear bombs, and the short answer is: They do not." 

Beeman and Stauffer compare the third facility, the PWR 
pressurized "light-water" reactor under construction at Bushehr, 
with Israel's heavy-water graphite-moderated plant at Dimona. The 
Bushehr reactor is designed to maximize power output through long 
fuel cycles of 30 to 40 months; it will produce plutonium isotopes 
(PU240, 241 and 242) that are "almost impossible to use in making 
bombs"; and "the entire reactor will have to shut down—a step that 
cannot be concealed from satellites, airplanes and other sources—in 
order to permit the extraction of even a single fuel pin." Israel's 
Dimona plant, in contrast, produces the bomb-making isotope PU239; 
moreover, it "can be re-fueled `on line,' without shutting down. 
Thus, high-grade plutonium can be obtained covertly and 

Claims emanating from the U.S. State Department to the effect that 
Iran possesses uranium-enrichment centrifuges or covert plutonium-
extraction facilities are dismissed by Beeman and Stauffer as 
implausible, since "the sources are either unidentified or are the 
same channels which disseminated the stories about Iraq's non-
conventional weapons or the so-called chemical and biological 
weapons plant in Khartoum." 

As Michael T. Klare remarks, the U.S. government's "claim that an 
attack on Iran would be justified because of its alleged nuclear 
potential should invite widespread skepticism." But skeptical 
intelligence appears to be the last thing one can expect from the 
corporate media, whose organs report without blinking Condoleezza 
Rice's threat that "The world will not stand by if Iran continues on 
the path to a nuclear weapons capability" (see [Rice]), and George 
W. Bush's equally inane declaration, following the IAEA's vote to 
refer Iran to the UN Security Council, that "This important step 
sends a clear message to the regime in Iran that the world will not 
permit the Iranian regime to gain nuclear weapons" (see [Bush]). 

There is much to be said about the sorry process of propagandizing, 
diplomatic bullying, and behind-the-scenes blackmail and arm-
twisting within the IAEA and in other forums—all of it strongly 
reminiscent of the maneuverings of late 2002 and early 2003—that has 
led to the present situation, where in early March the Security 
Council will be called upon, as in the case of Iraq three years ago, 
to accept and legitimize the falsehoods on which the new war of 
aggression is to be based. The early stages of this process were 
lucidly analyzed by Siddharth Varadarajan in three fine articles in 
September 2005. Its more recent phases have been assessed by Gordon 
Prather in a series of articles published since mid-September 2005, 
and also, with equal scrupulousness and ethical urgency, by another 
well-informed physicist, Jorge Hirsch, who has been publishing 
essays on the subject since mid-October. I will not repeat here the 
analyses developed in their articles (the titles of which are 
included in the list of sources which follows this text). But 
Varadarajan's recent summary judgment of the diplomatic process is 
worth quoting: "Each time it appeases Washington's relentless 
pressure on Iran, the international community is being made to climb 
higher and higher up a ladder whose final rungs can only be 
sanctions and war. This is precisely the route the U.S. followed 
against Iraq in its quest to effect regime change there" 
(Varadarajan, 1 Feb. 2006). 

It is also worth saying something, however briefly, about the media 
campaign that has accompanied the diplomatic preparations for war. 
This has included, since mid-2005, accusations that that Iran was 
involved in the terrorist attacks of 9/11, some of whose 
perpetrators are alleged (by members of the wholly discredited Kean 
Commission of inquiry into the events of 9/11) to have passed 
through Iran on their way to the U.S. (see Coman; Hirsch, 28 Dec. 
2005; and also, if you believe The 9/11 Commission Report to have 
any credibility, Griffin 2005). 

A more relevant accusation surfaced in November 2005, when the New 
York Times reported that senior U.S. intelligence officials had 
briefed IAEA Director-General Mohamed ElBaradei and his senior staff 
on information gleaned from a "stolen Iranian laptop computer" which 
they said demonstrated that Iran had developed nuclear weapons 
compact enough to fit onto its Shahab missiles. But as Gordon 
Prather wrote, "`sources close to the IAEA' said what they had been 
briefed on appeared to be aerodynamic design work for a ballistic 
missile reentry vehicle, which certainly couldn't contain a nuke if 
the Iranians didn't have any. Furthermore, according to David 
Albright, a sometime consultant to the IAEA, who has actually had 
access to the `stolen Iranian laptop,' the information on it is all 
about reentry vehicles and `does not contain words such 
[as] `nuclear' and `nuclear warhead'" (Prather, 23 Nov. 2005). 

Sorry, boys: no biscuit. 

And yet the object of the exercise was evidently not to persuade the 
IAEA people, who are not idiots, but rather to get the story into 
the amplification system of that Mighty Wurlitzer, the corporate 

This strategy has evidently worked. The New York Times, for example, 
may have parted company with Judith Miller, the `star' reporter 
whose sordid job was to serve as a conduit for Bush regime 
misinformation during the lead-up to the invasion of Iraq, but in 
Elaine Sciolino they have a reporter who is no less skilled in 
passing off neocon propaganda as fact (see Prather, 7 Jan. 2006). 
The New York Times also gave front-page space in mid-January to an 
article by Richard Bernstein and Stephen Weisman proposing "that 
Iran has restarted `research that could give it technology to create 
nuclear weapons'" (quoted by Whitney, 17 Jan. 2006). "Perhaps," Mike 
Whitney suggests, "the NY Times knows something that the IAEA 
inspectors don't? If so, they should step forward and reveal the 

The key facts, as Whitney wrote on January 17, are that there is no 
evidence that Iran has either a nuclear weapons program or 
centrifuges with which to enrich uranium to weapons-grade 
concentration. "These are the two issues which should be given 
greatest consideration in determining whether or not Iran poses a 
real danger to its neighbors, and yet these are precisely the facts 
that are absent from the nearly 2,500 articles written on the topic 
in the last few days." Add to these the further fact, noted above, 
that the August 2005 National Intelligence Estimate doubled the time 
American agencies thought Iran would need to manufacture "the key 
ingredient for a nuclear weapon" from the previous estimate of five 
years to a full decade. 

Why then is the American public being incited to ever greater 
anxiety in the face of a weapons program which—on the paranoid and 
unproven assumption that it actually exists—is if anything a 
receding rather than a gathering threat? 

Fox News has led the way among the non-print media in drum-beating 
and misinformation—to the extent, as Paul Craig Roberts observes, 
that a Fox/Opinion Dynamics poll can plausibly report "that 60% of 
Republicans, 41% of Independents, and 36% of Democrats support using 
air strikes and ground troops against Iran in order to prevent Iran 
from developing nuclear weapons." Worse yet, an LA Times/Bloomberg 
poll apparently finds that 57% of the respondents "favor military 
intervention if Iran's government pursues a program that would 
enable it to build nuclear arms." Any civilian nuclear power program 
opens up this possibility (Canada, had it so desired, could have 
become a nuclear-weapons power forty years ago)—but the function of 
the nuclear Non-Proliferation Treaty is precisely to open the way to 
peaceful nuclear power generation while preventing the further 
dissemination of nuclear weapons. What the LA Times/Bloomberg poll 
therefore means, Roberts says, is that "if Iran exercises its rights 
under the non-proliferation treaty, 57% of Americans support a US 
military attack on Iran!" 

Numbers like these suggest that George W. Bush will indeed get the 
new war he so desires. And it appears that he will get it soon. As 
Newt Gingrich declared on Fox News in late January, the matter is so 
urgent that the attack must happen within the next few 
months. "According to Gingrich, Iran not only cannot be trusted with 
nuclear technology, but also Iranians `cannot be trusted with their 
oil'" (Roberts). 

The Euro-denominated Tehran Oil Bourse

Gingrich's wording may sound faintly ludicrous. However, it would 
appear to be a slanting allusion to the fact that the Iranian 
government has announced plans to open an Iranian Oil Bourse in 
March 2006. This Bourse will be in direct competition with the New 
York Mercantile Exchange (NYMEX) and London's International 
Petroleum Exchange (IPE)—and unlike them will do business not in 
U.S. dollars, but in euros. What Gingrich evidently means is that 
the Iranians cannot be trusted to market their oil and natural gas 
in a manner that continues to benefit the United States. 

Peter Phillips and his colleagues in Project Censored explained very 
clearly in 2003 how the current U.S. dollar-denominated system of 
oil and gas marketing provides the U.S. with a highly advantageous 
system of exchange. In 1971, "President Nixon removed U.S. currency 
from the gold standard": 

"Since then, the world's supply of oil has been traded in U.S. fiat 
dollars, making the dollar the dominant world reserve currency. 
Countries must provide the United States with goods and services for 
dollars—which the United States can freely print. To purchase energy 
and pay off any IMF debts, countries must hold vast dollar reserves. 
The world is attached to a currency that one country can produce at 
will. This means that in addition to controlling world trade, the 
United States is importing substantial quantities of goods and 
services for very low relative costs." (Phillips) 

As Krassimir Petrov has observed, this amounts to an indirect form 
of imperial taxation. Unlike previous empires, which extracted 
direct taxes from their subject-nations, the American empire 
has "distributed instead its own fiat currency, the U.S. Dollar, to 
other nations in exchange for goods with the intended consequence of 
inflating and devaluing those dollars and paying back later each 
dollar with less economic goods—the difference capturing the U.S. 
imperial tax." 

Oil, backed by military power, has provided the rest of the world 
with a reason for accepting depreciating U.S. dollars and holding 
ever-increasing amounts of them in reserve. Petrov remarks that in 
1972-73 the U.S. made "an iron-clad arrangement with Saudi Arabia to 
support the power of the House of Saud in exchange for accepting 
only U.S. dollars for its oil. The rest of OPEC was to follow suit 
and accept only dollars. Because the world had to buy oil from the 
Arab oil countries, it had the reason to hold dollars as payment for 
oil. [….] Even though dollars could no longer be exchanged for gold, 
they were now exchangeable for oil" (Petrov). 

But as Phillips notes, the economic reasons alone for switching to 
the euro as a reserve currency have been becoming steadily more 
persuasive: "Because of huge trade deficits, it is estimated that 
the dollar is currently [in late 2003] overvalued by at least 40 
percent. Conversely, the euro-zone does not run huge deficits, uses 
higher interest rates, and has an increasingly larger share of world 
trade. As the euro establishes its durability and comes into wider 
use, the dollar will no longer be the world's only option." The 
result will be to make it "easier for other nations to exercise 
financial leverage against the United States without damaging 
themselves or the global financial system as a whole." 

Prior to the invasion of Iraq, several analysts suggested that one 
very obvious motive for that war was the fact that, beginning in 
November 2000, Iraq had insisted on payment in euros, not dollars, 
for its oil. In mid-2003, by which time the U.S. had made clear the 
intended terms of its occupation of Iraq, one such analyst, Coilin 
Nunan, remarked that it remained "just a theory" that American 
threats against Iraq had been made on behalf of the petro-dollar 
system—"but a theory that subsequent U.S. actions have done little 
to dispel: the U.S. has invaded Iraq and installed its own authority 
to rule the country, and as soon as Iraqi oil became available to 
sell on the world market, it was announced that payment would be in 
dollars only" (Phillips). William Clark writes, more directly, that 
the invasion was principally about "gaining strategic control over 
Iraq's hydrocarbon reserves and in doing so maintain[ing] the US$ as 
the monopoly currency for the critical international oil market" 
(Clark, 28 Jan. 2006). 

There is currently some debate over the extent to which U.S. war 
preparations against Iran are motivated by concern for the continued 
hegemony of the petrodollar (see Nunan). I find the analyses of 
William Clark and Krassimir Petrov persuasive. 

Clark notes that an important obstacle to any major shift in the oil 
marketing system has been "the lack of a euro-denominated oil 
pricing standard, or oil `marker' as it is referred to in the 
industry." (The current "oil markers," in relation to which other 
internationally traded oil is priced, are Norway Brent crude, West 
Texas Intermediate crude [WTI], and United Arab Emirates [UAE] Dubai 
crude—all of them U.S. dollar denominated.) In his opinion, "it is 
logical to assume the proposed Iranian bourse will usher in a fourth 
crude oil marker—denominated in the euro currency," and will 
thus "remove the main technical obstacle for a broad-based petro-
euro system for international oil trades." This will have the effect 
of introducing "petrodollar versus petroeuro currency hedging, and 
fundamentally new dynamics to the biggest market in the world—global 
oil and gas trades. In essence, the US will no longer be able to 
effortlessly expand credit via US Treasury bills, and the US$'s 
demand/liquidity value will fall" (Clark, 28 Jan. 2006). 

An even partial loss of the U.S. dollar's position as the dominant 
reserve currency for global energy trading would, as Petrov 
suggests, lead to a sharp decline in its value and an ensuing 
acceleration of inflation and upward pressure on interest rates, 
with unpleasant consequences. "At this point, the Fed will find 
itself between Scylla and Charybdis—between deflation and 
hyperinflation—it will be forced fast either to take its `classical 
medicine' by deflating, whereby it raises interest rates, thus 
inducing a major economic depression, a collapse in real estate, and 
an implosion in bond, stock, and derivative markets […], or 
alternatively, to take the Weimar way out by inflating, […] drown
[ing] the financial system in liquidity […] and hyperinflating the 

Any attempt, on the other hand, to preserve what Mike Whitney calls 
the "perfect pyramid-scheme" of America's currency monopoly 
(Whitney, 23 Jan. 2006) by means of military aggression against Iran 
is likely to result in equal or greater disruptions to the world 
economy. American military aggression, which might conceivably 
include attempts to occupy Iran's oil-producing Khuzestan province 
and the coastline along the Straits of Hormuz (see Pilger), will not 
just have appalling consequences for civilians throughout the 
region; it may also place American forces into situations still more 
closely analogous than the present stage of Iraqi resistance to the 
situation produced in Lebanon by Israel's invasion of that country—
which ended in 2000 with Israel's first military defeat (see Salama 
and Ruster). 

The involvement of Turkey

One significant difference between the warnings of a coming war 
circulating in early 2005 and those which have appeared in recent 
months is the current evidence of feverish diplomatic activity 
between Washington and Ankara. The NATO powers have evidently been 
co-opted into Washington's war plans: the so-called EU-3 (France, 
Germany, and Britain) presented Iran with a negotiating position on 
the nuclear fuel cycle for Iran's power plants that seemed designed 
to produce an indignant refusal. (As Aijaz Ahmad writes, the 
European group "was not negotiating; it was relaying to Iran, and to 
all and sundry, what the U.S. was demanding and threatening to 
report Iran to the Security Council if the latter did not comply. 
Everyone knows that Iran had closed its Isphahan facility 
voluntarily, as a confidence-building measure, expecting some 
reciprocity, and then re-opened it, in retaliation, after having 
waited for reciprocity for many months and not getting it—indeed, 
receiving only escalated demands.") 

But according to the well-connected Jürgen Gottslich, writing in Der 
Spiegel in late December, Iran was not discussed during the new 
German Defense Minister Franz Josef Jung's recent visit to 
Washington. Gottslich wrote that "the speculation surrounding an 
American strike against Iran centers more on developments in Turkey. 
There has been a definite surge in visits to Ankara by high-ranking 
National Security personnel from the U.S. and by NATO officials. 
Within the space of just a few days, FBI Director Robert Mueller, 
[CIA] Director [Porter] Goss and then NATO Secretary General Jaap de 
Hoop Scheffer visited Turkey." Condoleezza Rice also flew to Turkey 
immediately after her December trip to Berlin. 

The aim of these visits has quite obviously been to bring Turkey 
into line with a planned attack on Iran. As Gottslich writes, "On 
his Istanbul visit, Goss is alleged to have given Turkish security 
services three dossiers that prove Iranian cooperation with al-
Qaeda. In addition, there was a fourth dossier focusing on the 
current state of Iran's nuclear weapons program." 

But why, beyond the obvious fact of Turkey's shared border with 
Iran, should Turkey be such an important factor in American war 
plans? The answer is suggested by an article published by an 
American academic, Robert Olson, in the June 2002 issue of Middle 
East Policy. According to Noam Chomsky, Olson "reports that 12 
percent of Israel's offensive aircraft are to be `permanently 
stationed in Turkey' and have been `flying reconnaissance flights 
along Iran's border,' signaling to Iran `that it would soon be 
challenged elsewhere by Turkey and its Israeli and American allies'" 
(Chomsky 159). These Israeli aircraft would evidently take part in 
any American and Israeli aerial attack on Iran, and Turkish consent 
would no doubt be necessary for their use in such an act. 

What advantages might Turkey hope to gain from its consent? The 
collaboration of Britain, France and Germany in the cranking up of 
diplomatic pressure on Iran might suggest that Turkey's much-desired 
admission to the European Union could have been held out as one 
carrot—possibly with the argument that participation in an attack on 
a fundamentalist Islamic state could be one way of calming European 
fears over the entry of a Muslim nation into the Union. An equally 
persuasive advantage may have been a secret promise of future 
admission to the select group of nuclear powers. 

Christopher Deliso has assembled evidence both of Turkey's 
persistent involvement in the smuggling and production of nuclear 
weapons technology, including centrifuge components and triggering 
devices (Deliso, 21 Nov. 2005)—and also of the very interesting fact 
that the key administration officials involved in the outing of 
Valerie Plame, who was investigating these murky operations, 
included people, among them Marc Grossman, former U.S. ambassador to 
Turkey, who give every appearance of having been centrally involved 
in the very network of nuclear arms proliferation that the CIA was 
working to uncover (Deliso, 24 Nov. 2005). Even when supplemented by 
Sibel Edmonds' indications of high-level collaboration in the 
frustration by Turkish agents of the FBI's parallel investigations 
of what appears to be the same network, the evidence remains at best 
suppositious. And yet despite the inaccessibility of details—which 
will no doubt remain inaccessible for as long as Dick Cheney, John 
Bolton and the rest retain the power to frustrate investigations 
into the activities of their close associates and subordinates—the 
larger pattern is, to say the least, intriguing. The same highly-
placed neoconservatives who have been crying wolf over Iran's non-
existent nuclear weapons appear to have been deeply—and lucratively—
involved in the trafficking of restricted and forbidden weapons 
technology into Turkey. 

Should this pattern turn out indeed to involve corruption, 
hypocrisy, and treachery on the grand scale that Deliso's 
investigative reporting would suggest, is there any reason one 
should be surprised? 

What else, to be frank, would you expect from people such as these? 

Global Research Contributing Editor Michael Keefer is Associate 
Professor of English at the University of Guelph. He is a former 
President of the Association of Canadian College and University 
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