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us wants iraq's oil

  1. The United States desperately wants a war with Iraq, but not for the espoused reasons of eliminating hard-to-find "weapons of mass destruction."

    The U.S. wants another war with Iraq in order to control Iraq's immense oil-fields, to be used as collateral for more international borrowing, and to increase the huge, unsupportable U.S. debt.

    The U.S. has big, big economic problems. The debt-based U.S. economy is being squeezed because international borrowing is getting harder. The U.S. has been living off the savings of the rest of the world for years, now absorbing some three-quarters of the world's debt finance. The U.S. government, corporations and people are now the most indebted in the world.

    Altogether, the U.S. has borrowed nearly $40 trillion, and needs $2 billion a day in debt finance to support its huge trade deficit.

    The U.S. corporate debt market is a mess, with a corporate credit crunch underway. Highly indebted, highly leveraged U.S. corporations cannot borrow any more money, or pay their debt. Credit downgrades are rising, along with credit downgrades to junk bond status for blue-chip U.S. corporations, which are going bankrupt at a rapid pace.

    The liquidation of their debt is destroying money and negating efforts at reflating the U.S. dollar. Price deflation is appearing in many sectors, worsening their troubles. The profits of U.S. corporations are languishing, as prices fall and as the U.S. consumer shows signs of exhaustion.

    Japan-style deflation is starting to hit the west, and with deflation, the most indebted face huge problems paying the interest on their loans - they risk bankruptcy.

    The U.S. has also lost some 8 trillion dollars in its collapsing stock markets since March 2000. Stock markets are still collapsing as a historic, 1920's-scale investment bubble deflates. The investment bubble had boosted manufacturing capacity of uncompetitive, high-cost products. U.S. stocks are still hugely overvalued, as measured by price-earnings ratios, which indicates they have a lot further to fall. This erodes corporate and consumer finance.

    Meanwhile, China and other low-wage countries are garnering the lion's share of the world's direct finance to expand their manufacturing. Chinese and other low-wage countries increasingly export to the U.S., displacing U.S. manufacturing. Over three-quarters of products used in the U.S. are now made offshore, and imported.

    This is all bad news for the U.S. dollar. Offshore investors are fleeing the falling dollar, and are buying gold or the Euro with their immense dollar holdings. Economist Peter Warburton has just warned that the falling U.S. dollar will worsen the U.S. credit crunch. Islamic nations are planning to exchange their U.S. petrodollars for the Euro and gold, and this is another reason why the U.S. wants war: to keep them in line and supporting the U.S. dollar.

    In the U.S., only military contracts and low interest rates are propping up the U.S. economy now and keeping it out of recession. Low rates allow zero interest loans for new vehicle sales, and a huge housing investment bubble with skyrocketing housing prices. Yet hugely indebted U.S. consumers have reached their limit of borrowing and consumption, and the real estate bubble is showing early signs of collapse.

    If the U.S. grabs the Iraqi oil-fields, U.S. oil corporations can then move in and develop what are believed to be the world's largest oil reserves, surpassing even Saudi Arabia's oil-fields. That's money in the bank, and collateral for new loans, and new debt. U.S. portfolio manager and economics writer Marshall Auerback suggests the U.S. wants Iraqi oil-fields to repair its credit rating. Increased Iraqi oil flow to the U.S. could ultimately keep oil prices low, break OPEC, and prop up the U.S. economy.

    Yet in the meantime, oil prices are high, slowing the world economy, and oil prices could skyrocket in an actual war, pushing the world economy into recession, or worse.

    Thus, the U.S. wants war with Iraq as a way out of its economic and financial mess. The world shouldn't let the U.S. get away with it this time.

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