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[Paul Craig Roberts is John M. Olin Fellow at the Institute for PoliticalEconomy and Research Fellow at the Independent Institute. He is a former associate editor of the Wall Street Journal and a former assistant secretary of the U.S. Treasury.]
"The US has become the world's largest debtor, in hock to foreigners for one-fourth of our Gross Domestic Product. The ratio of US external debt (what we owe to foreigners) and US exports is approaching the crisis ratios of banana republics.
"It is inevitable: America's mounting debts will produce a crisis. The dollar's value will plummet, and US living standards will drop. Everything will become more expensive for Americans.
"The perilous condition of the dollar is one of the reasons Bush invaded Iraq. What keeps the overvalued dollar up is the fact that it is the currency in which the Middle East bills its oil. Every country has to purchase dollars in order to pay for its oil, and these purchases keep the dollar afloat.
"Just prior to the US invasion, sanctions on Iraqi oil had run their course and were about to be removed. Saddam Hussein intended to bill Iraqi oil in Euros, which could have started the abandonment of the dollar by the oil producing countries. Instead of fixing our economic problems, we started a war."
Full article at:
http://www.counterpunch.com/roberts09292004.html
"The US has become the world's largest debtor, in hock to foreigners for one-fourth of our Gross Domestic Product. The ratio of US external debt (what we owe to foreigners) and US exports is approaching the crisis ratios of banana republics.
"It is inevitable: America's mounting debts will produce a crisis. The dollar's value will plummet, and US living standards will drop. Everything will become more expensive for Americans.
"The perilous condition of the dollar is one of the reasons Bush invaded Iraq. What keeps the overvalued dollar up is the fact that it is the currency in which the Middle East bills its oil. Every country has to purchase dollars in order to pay for its oil, and these purchases keep the dollar afloat.
"Just prior to the US invasion, sanctions on Iraqi oil had run their course and were about to be removed. Saddam Hussein intended to bill Iraqi oil in Euros, which could have started the abandonment of the dollar by the oil producing countries. Instead of fixing our economic problems, we started a war."
Full article at:
http://www.counterpunch.com/roberts09292004.html
