Monday, March 24, 2008

US Declares War on Iran

Washington is now making the most ruthless use of its dollar hegemony against Iran. It just declared war on the entirety of Iran's banking system and will blackmail China, Europe, Japan, et al. to cut off Iran financially.
(1) the March 20 advisory [of the Financial Crimes Enforcement Network, a unit within the US Treasury Department] represents a US declaration of war by sanctions on Iran and a sanctions threat to the international banking community, (2) the US has various unilateral financial sanctions measures at its command in the form of executive orders and Patriot Act Section 311 and (3) the BDA-North Korea sanctions were, at least in retrospect, a test run for Iran.

If the US succeeds, an international quarantine on Iran's banks would disrupt Iran's financial linkages with the world by blocking its ability to process cross-border payments for goods and services exported and imported. Without those linkages Iran is unlikely to be able to engage in global trade and commerce. As 30% of Iran's GDP in 2005 was imports of goods and services and 20% was non-oil exports (World Bank and other data), a large chunk of Iran's economy would shrivel up. The repercussions will be painful and extend well beyond lost business and profits. For example, treating curable illnesses will become difficult. According to an Iranian health ministry official, Iran produces 95% of its own medicines but most pharmaceutical-related raw materials are imported. (John McGlynn, "The March 20, 2008 US Declaration of War on Iran," MRZine, 24 March 2008)
Make no mistake: this economic war is a strategy pursued by both Democrats and Republicans, realists and adventurists alike: Daniel Dombey, "Senators Urge Formal Sanctions," Financial Times, 6 March 2008.

The dollar hegemony is declining (cf. Jeffrey Frankel, "The Euro Could Surpass the Dollar within Ten Years," Vox, 18 March 2008; Wolfgang M√ľnchau, "This Crisis Could Bring the Euro Centre-stage," Financial Times, 23 March 2008), but will it decline fast enough for the Iranians?

The ruling clerics of Iran are able leaders who have run their country with a surer hand than leftists would have, but this presents them with the greatest challenge since Saddam Hussein, backed by the West, invaded Iran -- perhaps even a greater challenge, since at least the richest third of Iranians are not made of the same stuff as those who made the revolution and defended Iran's sovereignty in the eight-year-long war.


Wally da Weasel said...

China, Russia, and some lesser countries such as Venezuela will never bow to that. It may well end up as the U.S. 'cutting off it's nose to spite it's face'.

Naj said...

Did anyone watch FRONTLINE'S "THE BUSH'S WAR?"

Renegade Eye said...

I think you can oppose moves of war, as the US's economic sabotage attempts, without apologizing for the theocracy.

The bottom line is the US lost in Iraq, and will need Iran and Syria to bail them out.

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landsker said...

Hi guys,
Just to menton, that on Monday, Iran and Switzerland signed contracts, whereby the Swiss will be buying gas, directly from the Iranians, and not paid for in dollars!!!
The Americans have condemned the sale, the Swiss responded by saying they weren`t particularly bothered, Israel protested too, but to no avail.
Quote from the swiss Foreign Ministry ... “We don't accept the extraterritorial application of American law . . . this is a contract to supply gas. It implies no investment in Iran,” the ministry said.