26 April 2006

Anothe Dilbert Inspired Blog - George W Bush and Iraq

Scott Aams recently posted on his blog asking people to sum ip why america invaded Iraq, a surprising number still said WMD, even though its obvious that was al propoganda. The thing that really annoyed me was that a huge number of people just said Oil or Control of Oil.

To me this seems incredibly naive, while oil is valuable, so are $500,000 bombs. The war in Iraq cost the countries involved a hellova lot of money.

The reason for the war on Afghanistan, Iraq and Iran (I doubt saudi arabia due to there huge economic power)is the whole stability of the US Economy.

Maybe I should start a bit futher back.

The Dollar, as statated by the constitution, should be index linked to gold, $35 would get you an ounce of gold, of course with inflation this caused a bit of trouble when japan came with several billion dollars and asked for its gold, which America was obliged to pay it. Of course the link with gold was dropped pretty sharpish, but even though they called the dollar a fluid currency, with no backing, the dollar had to be supported by some kind of commodity

In the mid 1900's America signed a deal with a lot of eastern countries granting them Americas protection if in return they agreed only to sell Oil by the Dollar. This meant that whenever anybody wanted to buy oil they first had to buy the dollar, giving it a value dispite having no 'real' value.

What does this have to do with Afghanistan, Iraq and Iran?

In THAT ORDER they have declared that they want to trade Oil in Euros, this means that the main thing keeping the dollar stable will begin to be removed, and if one country does it, the value of the dollar will drop, this will cause other countries to 'panic convert' since they will not want to sell oil at bargain prices!

The end result?

The dollar will be worth a lot less, causing huge strife for many companies, if it goes ahead i could see there being an economic recession in america. Of course it will not be the end, America is still a large producer of many products, and most importantly food, however if the current trend continues America will take a hit, meaning cheaper food for the rest of the world i guess! =D

the way i see it is if you have a lot of money in the dollar, hedge your bets with gold & the Euro.

(Usual disclaimer applies this is for information only & i cannot be held responsible for any profit OR loss)

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