By Mike Whitney

02/01/06 "ICH" -- -- In less than 24 hours the Bush administration has won impressive victories on both domestic and foreign policy fronts. At home, the far-right Federalist Society alum, Sam Alito, has overcome the feeble resistance from Democratic senators; ensuring his confirmation to the Supreme Court. Equally astonishing, the administration has coerced both Russia and China into bringing Iran before the United Nations Security Council although (as Mohamed ElBaradei says) “There’s no evidence of a nuclear weapons program.” The surprising capitulation of Russia and China has forced Iran to abandon its efforts for further negotiations; cutting off dialogue that might diffuse the volatile situation.

“We consider any referral or report of Iran to the Security Council as the end of diplomacy,” Ali Larijani, secretary of Iran’s Supreme National Security Council, told state television.

The administration’s success with Iran ends the diplomatic charade and paves the way for war. Now, UN Ambassador John Bolton will appear before the Security Council making spurious allegations of “noncompliance” that will rattle through the corporate media and prepare the world for unilateral military action.

The administration has no hope of securing the votes needed for sanctions or punitive action. The trip to the Security Council is purely a ploy to provide the cover of international legitimacy to another act of unprovoked aggression. The case has gone as far as it will go excluding the requisite “touched up” satellite photos and bogus allegations of unreliable dissidents.

We should now be focused on how Washington intends to carry out its war plans, since war appears to be inevitable.

Those who doubt that the Bush-Cheney-Rumsfeld team will attack Iran, while so conspicuously overextended in Iraq, are ignoring the subtleties of the administration’s Middle East strategy.

Bush has no intention of occupying Iran. Rather, the goal is to destroy major weapons-sites, destabilize the regime, and occupy a sliver of land on the Iraqi border that contains 90% of Iran’s oil wealth. Ultimately, Washington will aim to replace the Mullahs with American-friendly clients who can police their own people and fabricate the appearance of representative government. But, that will have to wait. For now, the administration must prevent the incipient Iran bourse (oil-exchange) from opening in March and precipitating a global sell-off of the debt-ridden dollar. There have many fine articles written about the proposed “euro-based” bourse and the devastating effects it will have on the greenback. The best of these are “Petrodollar Warfare: Oil, Iraq and the Future of the Dollar” by William R. Clark, and “The Proposed Oil Bourse” by Krassimir Petrov, Ph.D.

The bottom line on the bourse is this; the dollar is underwritten by a national debt that now exceeds $8 trillion dollars and trade deficits that surpass $600 billion per year. That means that the greenback is the greatest swindle in the history of mankind. It’s utterly worthless. The only thing that keeps the dollar afloat is that oil is traded exclusively in greenbacks rather than some other currency. If Iran is able to smash that monopoly by trading in petro-euros then the world’s central banks will dump the greenback overnight, sending markets crashing and the US economy into a downward spiral.

The Bush administration has no intention of allowing that to take place. In fact, as the tax-cuts and the budget deficits indicate, the Bush cabal fully intends to perpetuate the system that trades worthless dollars for valuable commodities, labor, and resources. As long as the oil market is married to the dollar, this system of global indentured servitude will continue.

Battle Plans

The Bush administration’s attention has shifted to a small province in southwestern Iran that is unknown to most Americans. Never the less, Khuzestan will become the next front in the war on terror and the lynchpin for prevailing in the global resource war. If the Bush administration can sweep into the region (under the pretext disarming Iran’s nuclear weapons programs) and put Iran’s prodigious oil wealth under US control, the dream of monopolizing Middle East oil will have been achieved.

Not surprisingly, this was Saddam Hussein’s strategy in 1980 when he initiated hostilities against Iran in a war that would last for eight years. Saddam was an American client at the time, so it is likely that he got the green-light for the invasion from the Reagan White House. Many of Reagan’s high-ranking officials currently serve in the Bush administration; notably Rumsfeld and Cheney.

Khuzestan represents 90% of Iran’s oil production. The control over these massive fields will force the oil-dependent nations of China, Japan and India to continue to stockpile greenbacks despite the currency’s dubious value. The annexing of Khuzestan will prevent Iran’s bourse from opening, thereby guaranteeing that the dollar will maintain its dominant position as the world’s reserve currency. As long as the dollar reigns supreme and western elites have their hands on the Middle East oil-spigot, the current system of exploitation through debt will continue into perpetuity. The administration can confidently prolong its colossal deficits without fear of a plummeting dollar. (In fact, the American war-machine and all its various appendages, from Guantanamo to Abrams Tanks, are paid for by the myriad nations who willingly hold reserves of American currency)

This extortion-scheme is typically referred to as the global economic system. In reality, it has nothing to do with either free markets or capitalism. That is just philosophical mumbo-jumbo. This is the dollar-system; predicated entirely on the ongoing monopoly of the oil trade in dollars.

Invading Khuzestan

In a recent article by Zolton Grossman, “Khuzestan; the First Front in the War on Iran?”, Grossman cites the Beirut Daily Star which predicts that the “"first step taken by an invading force would be to occupy Iran's oil-rich Khuzestan Province, securing the sensitive Straits of Hormuz and cutting off the Iranian military's oil supply, forcing it to depend on its limited stocks."

This strategy has been called the “Khuzestan Gambit”, and we can expect that some variant of this plan will be executed following the aerial bombardment of Iranian military installations and weapons sites. If Iran retaliates, then there is every reason to believe that either the United States or Israel will respond with low-yield, bunker-busting nuclear weapons. In fact, the Pentagon may want to demonstrate its eagerness to use nuclear weapons do deter future adversaries and to maintain current levels of troop deployments without a draft.

Tonkin Bay Redux

On January 28, 2006, Iranian officials announced that they would “hand over evidence that proved British involvement in bombings in the southern city of Ahvaz earlier in the week” that killed eight civilians and wounded 46 others. This was just one of the many bombings, incitements, and demonstrations that have taken place in Khuzestan in the last year that suggest foreign intervention. The action is strikingly similar to the 2 British commandoes who were apprehended in Basra a few months ago dressed as Arabs with a truckload of explosives during the week of religious festival.

Coincidence?

Perhaps.

But, step by step, Iran is being set up for war. What difference does the provocation make? The determination to consolidate the oil reserves in the Caspian Basin was made more than a decade ago and is clearly articulated in the policy papers produced by the Project for the New American Century (PNAC) The Bush administration is one small province away from realizing the its dream of controlling the world’s most valued resource. They won’t let that opportunity pass them by.