In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.(...) Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq. Robert Fisk - Independent
David Seaton's News Links
The US dollar is not in good shape, the sharpest speculators like Soro's old sidekick Jim Rodgers or Pimco's Bill Gross call the US currency "debased" and are unloading them as fast as they can. Oil producing countries are especially "long" on dollars, as dollars are the only currency in which oil is traded. The United States has dominated the world's access to the world's most important center of oil production, the Middle East, since World War II, and just as much or more than its military might the US dollar has defined that domination.
It might not be an exaggeration to say that with America's humongous debt and overextended military, having the world's most essential commodity, oil, bought and sold in dollars, of which the United States can print as many as it likes, is the most important remaining pillar of America's imperial status. As it stands, any country that wants to buy oil has to change their currency into dollars to do so... If the USA had to change dollars to another currency in order to buy oil, it might find itself in a similar situation to the emperor whose new clothes turned out to be his birthday suit.
Cutting to the chase: If this happened Americans might find themselves facing Wiemar-like inflation. It is not very difficult to predict that if Americans cannot afford gasoline to go to and from work,supposing they still have work to go to, that they will vote out of office anyone who happens to be occupying the White House at the time. This sort of thing will concentrate a president's mind wonderfully... Even if he finds himself helpless to do anything about it.
Now we are faced with what is called the "Arab Spring".
Before we go on much further talking about said "spring", let us see what the word "spring" means... as you can see below it means almost anything you'd like it to mean. Have a look, take your time:
v. sprang (sprng) or sprung (sprng), sprung, spring·ing, springs
1. To move upward or forward in a single quick motion or a series of such motions; leap.
2. To move suddenly on or as if on a spring: The door sprang shut. The emergency room team sprang into action.
3. To appear or come into being quickly: New businesses were springing up rapidly. See Synonyms at stem1.
4. To issue or emerge suddenly: A cry sprang from her lips. A thought springs to mind.
5. To extend or curve upward, as an arch.
6. To arise from a source; develop.
7. To become warped, split, or cracked. Used of wood.
8. To move out of place; come loose, as parts of a mechanism.
9. Slang To pay another's expenses: He offered to spring for the dinner.
1. To cause to leap, dart, or come forth suddenly.
2. To jump over; vault.
3. To release from a checked or inoperative position; actuate: spring a trap.
a. To cause to warp, split, or crack, as a mast.
b. To bend by force.
5. To present or disclose unexpectedly or suddenly: "He sprung on the world this novel approach to political journalism" (Curtis Wilkie).
6. Slang To cause to be released from prison or other confinement.
1. An elastic device, such as a coil of wire, that regains its original shape after being compressed or extended.
2. An actuating force or factor; a motive.
a. Elasticity; resilience.
b. Energetic bounce: a spring to one's step.
4. The act or an instance of jumping or leaping.
5. A usually rapid return to normal shape after removal of stress; recoil.
6. A small stream of water flowing naturally from the earth.
7. A source, origin, or beginning.
a. The season of the year, occurring between winter and summer, during which the weather becomes warmer and plants revive, extending in the Northern Hemisphere from the vernal equinox to the summer solstice and popularly considered to comprise March, April, and May.
b. A time of growth and renewal.
9. A warping, bending, or cracking, as that caused by excessive force.
10. Architecture The point at which an arch or vault rises from its support.
1. Of or acting like a spring; resilient.
2. Having or supported by springs: a spring mattress.
a. Of, relating to, occurring in, or appropriate to the season of spring: spring showers; spring planting.
b. Grown during the season of spring: spring crops.
The Free Dictionary
Perhaps the most relevant definition as far as America's future role in the "new" Middle East is concerned would be definition number eight in the above verb list: "To move out of place; come loose, as parts of a mechanism."
That "coming loose", is really what is happening: America's foreign policy in the Middle East, elaborated over decades, is being destabilized and deconstructed and it is extremely doubtful that new governments resulting from this destabilization will be more ductile and cooperative in complying with American designs than the security states they replace. Instead of its shining moral and democratic example, it may be the weakening of America's power grip that is helping to drive event in the Middle East.
In short, the weakness of the dollar, military weariness, and America's mountainous debt, more than its love of democracy, are what the US brings to the "Arab Spring".
And now in a "perfect storm" of American domestic politics, the future price of gasoline meets the Israel lobby, a film that might be entitled "Horror on K-Street".
The crunch for the USA in the Middle East comes in September, when the UN General Assembly -- where the US has no veto -- is set to recognize Palestine as an independent, sovereign state, whose frontiers will be those of 1967 and whose capital will be Jerusalem. This will mean that 1/2 million Israelis will be illegally occupying the territory of a UN member state and this will convert Israel into an instant "pariah state". The US and Israel will naturally vote against this and as it stacks up today they will be accompanied by the likes of Guatemala, Tonga and Vanuatu... a disaster... even Britain and France are set to vote for the recognition of a Palestinian state.
Everybody, everywhere would like a peaceful and quiet Middle East, where the oil flows freely like the biblical milk and honey and the Palestine question is a major obstacle to this, because it has become perfectly obvious that Israel is only using the "Peace Process" to kill time while they carve up and colonize the occupied (sorry, "disputed") territories bit by bit... "creating facts" they call it... "one hill at a time"... it has been going on since before WWI and it is obvious that the USA is unable to make them stop. Seeing the tail so blatantly wagging the dog gives the new Arab democracies little motivation to go against their public opinion and cut the US any slack at all. The USA is not seen to holding any solutions for the problems of the Middle East, neither those of the new democracies, nor those of the remaining autocracies (read Saudi Arabia) but rather part of the problem.
Oil even more than money makes the world go round. For most of the world the choice between cheap oil and Israel is a no-brainer, but the American political system is paralyzed by its myriad lobbies and political action committees, like the NRA or AARP or in this case, the American Israel Political Affairs Committee (AIPAC).
AIPAC works tirelessly to insure that American's notorious love of cheap gasoline doesn't trump their legendary. love of Israel. Unfortunately for Israel there is no such thing as a CHIPAC (China Israel Public Affairs Committee) or much less a BRICIPAC or a even a European EUIPAC so Obama is left holding the bag. If one day the President of the United States announces that the frontiers of any Palestinian state will be the frontiers of 1967, the next day he has to back down.
So that is the lay of the land: oil may be sold in a basket of currencies, which will mean a dollar in free fall, which will mean the end of "happy motoring" and Israel will have become a pariah state in a sea of hostile new democracies, mostly because the American political system is terminally paralyzed. DS