Little to say for myself

Thursday, March 20, 2003  

Putting your money where your mouth is

I've been thinking about something Robin Cook said:
[it appears that] our partners in Washington are less interested in disarmament than they are in regime change in Iraq. That explains why any evidence that inspections may be showing progress is greeted in Washington not with satisfaction but with consternation: it reduces the case for war.
There is a way of finding out whether this is true. I'm not normally one for conspiracy theories, but this one intrigued me.
hardly anyone remembers what Hussein actually did in November 2000. It was then that Hussein stopped accepting U.S. dollars as payment for Iraq's oil exports.
When Hussein made the move, the euro had declined 30 percent since its January 1999 debut and it didn't show much promise as a reserve currency. It took 82 cents to buy one euro. Radio Free Europe, one of the only organizations to report Hussein's switch, spent much effort trying to understand why Hussein would take such an economic hit just to irk the United States. Later, he also converted his $10 billion U.N. oil-for-food escrow account to euros.
Since then, circumstances have changed. The U.S. Treasury quietly shed its "strong dollar" policy in March 2002. Almost immediately, the euro began gaining on the dollar, moving well beyond parity in November 2002. It now takes about $1.09 to buy one euro. Essentially, Hussein has profited greatly from the switch, even after subtracting currency exchange fees, and may profit even more if the dollar continues to slide.
CNN reported last year that, in light of political tensions with the United States, North Korea ended dollar-denominated trade on Dec. 1, 2002. Other countries, including Iran and Venezuela, have also considered switching to the euro as their reserve currency.
At this point, "disaster" for the United States is not a military attack from Iraq. Rather, it is the possibility that other nations -- specifically nations of the Organization of Petroleum-Exporting Countries -- will follow Hussein's lead and switch to euro-denominated trade accounts.
Unlike most such theories, this one can be tested. If, after he kicks Saddam out, Bush restores the Dollar standard for Iraqi oil, we'll all know why he invaded.

posted by Plig | 01:11 |

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Forget the sentimental notion that foreign policy is a struggle between virtue and vice, with virtue bound to win.
Forget the utopian notion that a brave new world without power politics will follow the unconditional surrender of wicked nations.
Forget the crusading notion that any nation, however virtuous and powerful, can have the mission to make the world in its own image.
Remember that diplomacy without power is feeble, and power without diplomacy is destructive and blind.
Remember that no nation's power is without limits, and hence that its policies must respect the power and interests of others.
Hans Morgenthau

The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts
Bertrand Russell

The release of atomic energy has not created a new problem. It has merely made more urgent the necessity of solving an existing one
Albert Einstein

When you are right you cannot be too radical; when you are wrong, you cannot be too conservative
Martin Luther King Jr.

Our great democracies still tend to think that a stupid man is more likely to be honest than a clever man
Bertrand Russell

I think it would be a good idea
Mahatma Gandhi, when asked what he thought of Western civilization

There are painters who transform the sun to a yellow spot, but there are others who with the help of their art and their intelligence, transform a yellow spot into the sun
Pablo Picasso

Those are my principles, and if you don't like them... well, I have others
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Whatever you do will be insignificant, but it is very important that you do it
Mahatma Gandhi

Always make new mistakes
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