Will Bush's thirst for hegemony backfire? | Move to the Euro by Iran | Announcement of Gulf States/EU Free Trade Agreement


The Iranian government has finally developed a new weapon that can destroy the financial system underpinning the American Empire. The U.S. dollar dominance is coming to an end. A hundred years ago the U.S. currency's dominance was referred to as "dollar diplomacy". After the end of the Second World War, and the fall of the Soviet Union in 1989, that policy evolved into "dollar hegemony."

A day before Iran announced converting its dollar-denominated assets held overseas into Euros, Sultan Nasser al-Suweidi, the United Arab Emirates' central bank governor, said that 'we're waiting for a clear trend to emerge before converting our reserves into Euros or any other currency.'

The bank holds 98% of its reserves in greenbacks but plans reducing its dollar holdings to between 50% and 90%.

Analysts aroused fears over Iran's move, warning it would prompt another U.S. war in the region. When other countries, like Iran, sought payment of oil in other currencies, most notably Euro, the punitive action was in order.

The American President George W. Bush's Shock-and-Awe in Iraq was not about Saddam's nuclear ambitions, or the alleged link to Al Qaeda network which the U.S. blames for September 11 attacks, it's about defending the dollar, and setting an example that anyone who seeks payment for oil in currencies other than U.S. Dollars, which is what Saddam did in 2000, would be likewise punished.

But if the U.S. decided to commit the same mistake it made in Iraq again; i.e. invading Iran, it will definitely bring an end to its political hegemony not just the hegemony of its currency, in the region and the world.

History teaches that an empire should go to war for either defending itself or benefiting from war; otherwise, as Paul Kennedy stated in his The Rise and Fall of the Great Powers, 'a military overstretch will drain its economic resources and precipitate its collapse'.

This comes at a time when the Gulf States are moving away from a GCC and entering into a free-trade agreement with the EU. Who needs dollars???

An agreement between the two trading blocs is “imminent,’’ Sheikh Ebrahim bin Khalifa al-Khalifa told reporters in Dubai yesterday.

The office of EU Trade Commissioner Peter Mandelson has said that he may visit the Middle East next month in an attempt to conclude free-trade talks with the six Gulf states, that also includes Qatar, Oman, Kuwait and the United Arab Emirates, which have been under way for 15 years.

A free-trade accord would reduce barriers and fuel trade between the six-member Gulf Co-operation Council (GCC), which pumps about a fifth of the world’s crude oil, and the 25-nation EU.

Negotiations cover market access on goods and services, common rules and disciplines on intellectual property rights, competition, dispute settlement or rules of origin.


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