Bush went to the trouble of traveling half-way around the world to tell the Saudis and their friends in the Gulf States that they were going to continue linking their oil to the dollar or they were going to “sleep with the fishes”. For the last two months, various sheiks and finance ministers have been groaning about the falling dollar---threatening to break from the so-called “dollar-peg” and covert to a basket of currencies. Bush's trip appears to have rekindled the spirit of brotherly cooperation. The grumbling has ceased and everyone is back "on board". The regional leaders now seem considerably less bothered by the fact that inflation is gobbling up their economies and driving labor, food, energy and housing through the roof. Reuters summed it up like this:As Whitney notes, the long-awaited Iranian Oil Bourse is scheduled to open between February 1-11.“After a flurry of public disagreements over currency reform last year, Gulf central bankers are trying to close ranks, talking up the pegs as a source of stability and playing down the dollar's weakness as a temporary phenomenon.”Looks like Bush smoothed things over.
As to whether the Bush administration would start a war to defend dollar hegemony; that's a question that should be asked of Saddam Hussein. Iraq was invaded just six months after Saddam converted to the euro. The message is clear; the Empire will defend its currency.Whitney cites intriguing military maneuvers by Russia, France and Israel, plus Arab neighbours, and ties that to the recent massive Internet cable cut in the Persian Gulf (which I suspect could have been a submarine). Conclusion:
Similarly, Iran switched from the dollar in 2007 and has insisted that Japan pay its enormous energy bills in yen. The “conversion” has infuriated the Bush administration and made Iran the target of US belligerence ever since.
Bush is convinced that if he doesn't confront Iran, then no one will. He also believes that if he doesn't militarily defend the dollar, then America's days as “the world's only superpower” will soon be over. The question is whether Bush will realize that America is already bogged-down in two “unwinnable” conflicts or if he will “go with his gut” once again and lead us into a ruinous region-wide conflagration.