Petrodollar became the essential basis for the US economic hegemony in the 1970s

power in Eurasia, for a variety of economic and political reasons, a growing number of oil producers in the Middle East, South America, and Russia are talking about openly trading oil for euros instead of dollars, or trading oil in a 'basket of currencies'. To do so would accelerate the US dollar's fall, and boost the euro's claim to become the world's second reserve currency. If a nation's economy is only as good as its currency, and the dollar continues to lose value, the US economy would be headed for a steep fall under these conditions.

Superior military forces of the US and other Western states may take but cannot hold Iraq's (and Iran's) oil. Far from staving off the downfall of the US dollar, their aggression and arrogance may instead compel OPEC to 'go euro' en masse. Since 2001, member countries of the OPEC have sharply increased deposits in euro's and placed less in dollars. US dollar-denominated deposits fell from 75 percent of total deposits in the third quarter of 2001 to 61.5 percent in the last quarter of 2004. During the same period, the share of euro-denominated deposits rose from 12 percent to 20 percent.

In the meantime, many people will be hurt and killed. In Iraq, for instance, 'the civilian death toll has risen inexorably for the entire duration of the US-led military presence. following the initial invasion'. Those who have hoped that a U.S. military victory in Iraq would somehow bring about a more peaceful world must be in for a rude awakening. Figures released by the Iraq Body Count project (IBC) on 9 March 2006 show that the total number of civilians reported killed has risen year-on-year since 1 May 2003 (the date that President Bush announced 'major combat operations have ended'). Back in February, the Bush administration renamed its 'Global War on Terror' to the 'Long War'. In its Quadrennial Defence Review to Congress, the Pentagon now produced yet another hyperinflated 'threat analysis', claiming that the threat from worldwide Islamic militancy has escalated to a 'generational' time frame requiring a large-scale war of long duration fought on many fronts, hence the name change.

Bulent Gokay

Dr. Bulent Gokay is a Reader in International Relations, School of Politics, International Relations and Philosophy, Keele University, United Kingdom. He can be contacted by e-mail at b.gokay@intr.keele.ac.uk

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