Iranian Oil Exchange
                 …Declaration of War?

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

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 false.

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 Korea.

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 agents.

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 terrorism….”

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 yield.”

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 civilians.

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 facts.

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 continuously.”

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 media.

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 facts.”

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 economy.”

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?