2/5/08

The Riddle of the Cut Cables and the Almighty Dollar

Several theories are floating around about these cables and what it means. You have to connect various events to really make any sense of it, but it looks like a protectionist move to stall the Iran Oil Bourse.

Many people have weighed in on the matter, and I have nothing to add that hasn’t already been said. At this point I think Mike Whitney offers the best solution to the riddle, at least that I’ve seen so far. You won’t be surprised to learn that it might be all about money. It makes sense. We are talking about the Almighty Dollar.

So, how important is it that oil continue to be denominated in dollars? Would the United States wage war to defend the dollar’s status as the world’s “reserve currency”?

The answer to this question could come as early as this week, since the long-awaited Iranian Oil Bourse is scheduled to open between February 1-11. According to Iran’s Finance Minister Davoud Danesh-Jafari, “All preparations have been made to launch the bourse; it will open during the 10-day Dawn (the ceremonies marking the victory of the 1979 Islamic Revolution in Iran) The bourse is considered a direct threat to the continued global dominance of the dollar because it will require that Iranian “oil, petrochemicals and gas” be traded in “non-dollar currencies”. (Press TV, Iran)

The petrodollar system is no different than the gold standard. Today’s currency is simply underwritten by the one vital source of energy upon which every industrialized society depends—oil. If the dollar is de-linked from oil; it will no longer serve as the de-facto international currency and the US will be forced to reduce its massive trade deficits, rebuild its manufacturing capacity, and become an export nation again. The only alternative is to create a network of client regimes who repress the collective aspirations of their people so they can faithfully follow directives from Washington.

As to whether the Bush administration would start a war to defend dollar hegemony; that’s a question that should be asked of Saddam Hussein. Iraq was invaded just six months after Saddam converted to the euro. The message is clear; the Empire will defend its currency.

It’s not definitive to my mind, but Whitney offers as good an explanation as any. Back in November this article explained why We must bomb Iran because those smart bastards outwitted our diabolical debt trap. Maybe the cut cables are just a message, maybe they are installing some kind of sabotaging equipment during the repairs, maybe it’s to see how everyone reacts, maybe it’s to stall the inevitable…who knows. It could be all of the above. Personally I am finding it increasingly difficult to shake the feeling that something big will happen soon, but I have felt this way many times before and nothing has happened. You know it, our luck will run out some day, that’s for sure.

From here on in we watch and wait.

UPDATE: This story just doesn't end. Two items:

1. I wrote the other day and linked to a diagram of these cables. The diagram was not scaled but looked to be at least the size of a beer can in diameter (an outofmyarse guess for sure). According to this source, the cables are only about the diameter of a thumb. If that's the case, they could be easily snapped by a ships anchor, though the odds of that happening are still similar to winning the lottery.

2. The number of cable cuts now totals five or possibly six.

UPDATE: Good snark here.


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