Iran Oil Bourse

Though the mainstream press will not touch this story, the upcoming Iran Oil Bourse is generating much comment and discussion elsewhere. This bourse will be an alternative to the only two other oil exchanges in the world [New York and London]. Most significantly, it will be non-dollar denominated. According to a learned commentator:

"Throughout history, the arguments offered in favor of the creation and preservation of central banking have varied, but the one characteristic common to all central banking in all of history is that it finances government debt. The function of central banks is, and always has been, to allow governments to spend money without the political inconvenience of taxing people for the money first. The central bank does this in exchange for being granted a government-enforced monopoly on the issuance of bank notes. This allows the banks to lend out – and make interest on – money they don't really have. This used to be called fraud. Nowadays it's called fractional reserve banking, and a vast intellectual smokescreen has been emitted to justify its practice.

The value of a bank note is always initially derived from the commodity the note supposedly represents. Before 1933, a dollar was 1/20th an ounce of gold. A dollar bill was, at least in theory, a receipt for gold deposited at a bank. Obviously, banks and governments are heavily motivated by self-interest to weaken and, if possible, sever this link between bank notes and gold. The U.S. government started this process of money "tokenization" in 1933 and completed it in 1971. Since then, every dollar created by the Federal Reserve and the fractional-reserve system is wealth transferred from the economy as a whole directly to the banks and the government, and the amounts of money created are truly staggering.

There is much to say on this topic, but the relevant question is this: Once a government has succeeded in severing the link between a bank note and the commodity that once backed it, what is it that holds a currency in place? Some would have us believe that nothing more than cultural convention is needed to explain this, but the examples of worthless paper currency littered through history expose this lie. Legal tender laws are a partial explanation, but a better explanation is that one must have dollars to pay taxes, which are, as a rule, unavoidable, making dollars, as a rule, indispensable. This would at least explain how a currency could be made to hold its place as currency within a single country.

The requirement that dollars are needed to pay taxes in the United States, however, is not a satisfactory explanation for how the dollar has become the world's reserve currency. The fact is that beginning in 1973, dollars have been backed not by gold, but by oil. One must acquire dollars if one is to purchase oil. When the Federal Reserve and the fractional-reserve system expand the money supply, they are not appropriating the wealth of the U.S. economy, but the economy of the entire world.

I've never seen anyone publicly address the consequences of this explanation of the Iraq war and the current belligerent attitude of the United States government towards Iran. One is that not only are the evangelical dispensationalists stooges for the neocons, but the neocons themselves are probably to some degree stooges for the even more faceless forces who shepherded them into positions of power. Another consequence of this explanation is that it is irrelevant whether or not Iran has, or plans to have, a nuclear weapons program. The only point of the accusations is to get people arguing about the wrong issue. As Thomas Pynchon said, if they can get you asking the wrong questions, they don't have to worry about the answers. It doesn't matter to those maneuvering for war with Iran whether oil hits $100 a barrel, or whether the war is eventually discredited. All that matters is that Iran's oil bourse be stopped."