The United States is an Empire. As Krassimir Petrov points out in his 2006 article “The Proposed Iranian Oil Bourse”, an empire needs to tax other nation-states in addition to its own citizens. And we do it through the “Inflation Tax.” From the article:

The history of empires, from Greek and Roman, to Ottoman and British, teaches that the economic foundation of every single empire is the taxation of other nations.

He makes an excellent economic argument how the fiat currency known as the U.S. dollar is propped up by oil, and the actual reason we invaded Iraq and why we will indeed invade Iran.

The economic essence of this arrangement was that the dollar was now backed by oil. As long as that was the case, the world had to accumulate increasing amounts of dollars, because they needed those dollars to buy oil. As long as the dollar was the only acceptable payment for oil, its dominance in the world was assured, and the American Empire could continue to tax the rest of the world. If, for any reason, the dollar lost its oil backing, the American Empire would cease to exist.

However, first Iraq (in 2000) and now Iran (in 2006) have dared to sell oil in denominations other than U.S. dollars, thereby undermining the currency and the overall plan for U.S. empire.

Many have criticized Bush for staging the war in Iraq in order to seize Iraqi oil fields. However, those critics can’t explain why Bush would want to seize those fields—he could simply print dollars for nothing and use them to get all the oil in the world that he needs. He must have had some other reason to invade Iraq.

I am amazed how much light this sheds on a war I’ve never understood. The terrorist scare seems way overblown, and always felt a little contrived.

I encourage you to treat yourself to a better understanding of economics and read the whole article–it’s not something that I can sum up in a quick sound bite. This article has helped me finally understand why the U.S. is in a war with Iraq and why the news media and the Bush Administration keep beating the war drums on Iran.

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