Mar 8, 2014
The Myth of ‘Isolated’ Iran
Posted on Jan 18, 2012
By Pepe Escobar, TomDispatch
Follow the Money
That Iranian isolation theme only gets weaker when one learns that the country is dumping the dollar in its trade with Russia for rials and rubles—a similar move to ones already made in its trade with China and Japan. As for India, an economic powerhouse in the neighborhood, its leaders also refuse to stop buying Iranian oil, a trade that, in the long run, is similarly unlikely to be conducted in dollars. India is already using the yuan with China, as Russia and China have been trading in rubles and yuan for more than a year, as Japan and China are promoting direct trading in yen and yuan. As for Iran and China, all new trade and joint investments will be settled in yuan and rial.
Translation, if any was needed: in the near future, with the Europeans out of the mix, virtually none of Iran’s oil will be traded in dollars.
Moreover, three BRICS members (Russia, India, and China) allied with Iran are major holders (and producers) of gold. Their complex trade ties won’t be affected by the whims of a U.S. Congress. In fact, when the developing world looks at the profound crisis in the Atlanticist West, what they see is massive U.S. debt, the Fed printing money as if there’s no tomorrow, lots of “quantitative easing,” and of course the Eurozone shaking to its very foundations.
It’s been spearheaded by Iran and it’s bound to translate into an anxious Washington, facing down not only a regional power, but its major strategic competitors China and Russia. No wonder all those carriers are heading for the Persian Gulf right now, though it’s the strangest of showdowns—a case of military power being deployed against economic power.
In this context, it’s worth remembering that in September 2000 Saddam Hussein abandoned the petrodollar as the currency of payment for Iraq’s oil, and moved to the euro. In March 2003, Iraq was invaded and the inevitable regime change occurred. Libya’s Muammar Gaddafi proposed a gold dinar both as Africa’s common currency and as the currency of payment for his country’s energy resources. Another intervention and another regime change followed.
Washington/NATO/Tel Aviv, however, offers a different narrative. Iran’s “threats” are at the heart of the present crisis, even if these are, in fact, that country’s reaction to non-stop US/Israeli covert war and now, of course, economic war as well. It’s those “threats,” so the story goes, that are leading to rising oil prices and so fueling the current recession, rather than Wall Street’s casino capitalism or massive U.S. and European debts. The cream of the 1% has nothing against high oil prices, not as long as Iran’s around to be the fall guy for popular anger.
As energy expert Michael Klare pointed out recently, we are now in a new geo-energy era certain to be extremely turbulent in the Persian Gulf and elsewhere. But consider 2012 the start-up year as well for a possibly massive defection from the dollar as the global currency of choice. As perception is indeed reality, imagine the real world—mostly the global South—doing the necessary math and, little by little, beginning to do business in their own currencies and investing ever less of any surplus in U.S. Treasury bonds.
Of course, the U.S. can always count on the Gulf Cooperation Council (GCC)—Saudi Arabia, Qatar, Oman, Bahrain, Kuwait and the United Arab Emirates—which I prefer to call the Gulf Counterrevolution Club (just look at their performances during the Arab Spring). For all practical geopolitical purposes, the Gulf monarchies are a U.S. satrapy. Their decades-old promise to use only the petrodollar translates into them being an appendage of Pentagon power projection across the Middle East. Centcom, after all, is based in Qatar; the U.S. Fifth Fleet is stationed in Bahrain. In fact, in the immensely energy-wealthy lands that we could label Greater Pipelineistan—and that the Pentagon used to call “the arc of instability”—extending through Iran all the way to Central Asia, the GCC remains key to a dwindling sense of U.S. hegemony.
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