When Iran sells oil to a customer in Germany, the German customer asks a European bank to deposit US dollars into an Iranian bank account. The European bank then arranges for the transfer of US dollars from a US bank to an Iranian bank account in Europe. Paulson’s ban prohibits US banks from transferring funds if Bank Saderat and Bank Sepah are involved. (New York Times, October 16, 2006) With oil sales denominated in US dollars, the aim is to impede Iran’s ability to sell oil. The way around the US manoeuvre is to sell oil in Euros, something Iran has already begun to do. (New York Times, January 10, 2007)The full article is well worth a read.
This would seem to be a simple enough way of beating the US at its own game. It also raises questions about the prudence of compelling Iran to switch to Euros, since a change to Euros, if adopted by a number of oil-exporting countries, would push down the value of the US greenback. US investment banker John Hermann, a comptroller of currency in the Carter administration, wonders whether the US is shooting itself in the foot. (New York Times, October 16, 2006)
On the surface, these are valid concerns. But Paulson’s aims are broader. In September he let the world banking community know that it should stop doing business with more than 30 named Iranian enterprises. Behind the request lay a veiled threat. Banks that deal with Iranian businesses run the risk of jeopardizing their future access to the US financial system. Already, a number of European banks have taken heed, scaling back their dealings with Iranian banks and businesses. Credit Suisse and UBS in Switzerland, ABN Amro in the Netherlands and HSBC in Britain are starting to steer a wide berth around Iran...
Peek below the surface, and the hostility to our own interests of the recurrent pattern of capitalist-driven expansion at the expense of the sovereignty of other countries becomes evident. Who pays the taxes to pay the interest on bonds sold to investment bankers and hereditary capitalist families to refurbish nuclear arsenals that don’t need refurbishing, to replace tanks, armoured vehicles and helicopters lost in the wars that should never have been fought, and to build war machines to outrage the sovereignty of other countries? Who foots the bill for lucrative defense contracts to make the machinery of war? Who carries the ball to finance the programs of subverting democracy in other countries? Who sacrifices their limbs, eyesight, hearing, sanity and lives to fight wars to secure profitable investment opportunities for the super-rich? In this system, the bulk of us are exploited, while a tiny minority reaps the benefit of monstrous profits. We are the cannon-fodder, the vote-fodder, the tax-fodder that allows the system to run and the super-rich get super-richer. True, the enemy of my enemy is not necessarily my friend. But we should be clear on who – and what -- the enemy is, who the victims are, and how the victims have a common interest in challenging their common enemy.
Meanwhile, Josh suggests a UN Naval buildup in the gulf will coincide with a good excuse to start the bombing campaign.