War, what is it good for?
I have a growing disquiet about the people around me. Not my friends and family so much as the people I do not know but with whom I am linked by my daily commute, my travels around the city heck, even the destination of my taxes. What goes on in the minds of my fellow Canadians?
In the olden days, religion and nationalism led to more violence and more death than almost any other cause. After WW2, the cry of "never again" went up in the west and everyone settled in for 45 years of pleasant MAD (mutually assured destruction) peace. Yet MAD is no longer a shield - the M has been replaced, although I am not sure yet with what.
Suicide bombers and rogue nuclear islamist regimes should scare the daylights out of people who used to freak out over Soviets (who incidentally preferred life to death) having the bomb. Yet it seems to be considered right wing to be afraid of suicidal religious extremists. Odd. I think the difference between right wing and left wing is actually a battle between those who believe that we (the west) have something to fight for, and those who think something else.
In the olden days, people knew what was worth fighting for: King, Country, Religion, freedom, something else. Much of the west has put the idea of fighting down to history. That it is something the enlightened west has now evolved beyond. Yet I think this masks decadence. Much as the Romans moved from citizen soldiers willing to die for Rome to foreign mercenaries paid to fight for the immorally decadent Romans, we too are on the other side of our time of strength.
I look around and consider what Canadians are willing to fight for; what are they willing to die for. I am quite certain that most would say nothing, at least nothing is worth their own lives, it might be worth someone else's (preferably someone they do not know). Others I fear might be more willing to die to destroy Canadian society, but they are most likely a tiny minority at this point. I think the bigger threat is those who see nothing to fight for.
Canada is one of the most multi-cultural countries in the world, yet when I look at the pictures of our army, it is almost exclusively white. Given recent appeals for more Mulim recruits, my sense is that the colour is not due to biased recruiting but to a large portion of the Canadian population that does not feel that it is worth sacrificing for this country. While I am sure it encompasses a large part of the white population (especially Quebec), it seems to encompass almost all of the rest.
These ramblings are not to say much except that there was a time when people were willing to fight and die for their country because the survival of their country meant the survival of their family and their way of life. If no one is willing to fight for these things in Canada, it should be pretty easy for those who want to change the country and its way of life to do so. It may not be a military attack, it may only be a creeping takeover and the difference may only reflect the length of time until victory/defeat. Military defences are the best manifestation of a country's willingness to defend itself and what it believes in. Canada appears to be divided, uncertain and not willing to commit to its defence at all. The future.... who knows.... the bigger problem is that it seems so few Canadians really care.
Oil for Euros Conspiracy debunked
I have recently noted a biazarre conpiracy theory pervades some threads. The thought that the US invaded Iraq, and is now sabre-rattling against Iran, because these two US countries are trying to, or already have, sold their oil for Euros rather than dollars. This makes no sense whatsoever and seems to be yet another random idea to "support" those who bash the US without feeling the need to think about the ideas they propose, or even better those they simply foward on as fact.
See
Oil in Euros ConspiracyThis theory bunk. Why?
All currencies are tradeable into other currencies. So although oil contracts tend to be in USD, one can easily calculate the price in other currencies. For example, while oil, currently, may be $70 USD the US dollar buys about $1.10 Canadian, thus multiplying the price of oil by $1.10, one finds that the price of oil is suddenly $77 Canadian.
The long answer is next. Skip down three paragraphs for the simple answer.
Now this may seem shocking, but in fact, a buyer can agree to buy oil in any currency they want, OR they can simply buy USD, buy the oil and then the seller can sell the USD into whatever currency they want. Thus, if the Europeans want to buy oil from the Alberta, Canada oil fields and it costs 80 Euro cents to buy one USD, then the European who wants to buy a barrel of Canadian oil simply converts 80 Eurocents x 70 (the USD price of a barrel of oil), or 56 Euros into USD. They use their new $70 USD to buy the barrel of oil from the Albertans. The Albertans operate in Canada and want Canadian dollars, so they sell the $US 70 for $US 70x $1.10 (the Canadian / American exchange rate) and end up with $77 Canadian to fund their Canadian operations.
The total transaction lead to Europeans selling Euros, buying USD and buying a barrel of oil for USD, while the Canadians sold a barrel of oil, received USD, sold the USD and bought Canadian dollars. When all is netted out, the USD received no benefit except some additional liquidity, it certainly did not prop up the US dollar.
The Candians sold a barrel of oil and received Canadian dollars while the European sold Euros to buy oil, in fact, it looks like the Europeans bought oil for Euros!!!! OMG!!!
In fact, there is a Canadian/Euro exchange rate so they do not even need to transact in USD (if you are Canadian or European think about the last time you were in the other's country, if you were - a Canadian in Europe trades their $C for Euros to spend at the L'Ouvre and on the Algrave - they never convert into USD). The current exchange rate is one Euro buys $1.40 Canadian. As a barrel of oil costs $77 Canadian, it costs $77/$1.40 (the Canada/Euro exchange rate) or 55 Euros. Thus the European can simply pay the Canadian 55 Euros to buy the barrel of oil. The Canadian can convert back into Canadian dollars (and receive $77 canadian) or spend the euros, perhaps on a trip to the L'Ouvre - which in summer probably costs about that much.
Conclusion: People can buy oil in whatever currency they want, the only reason that oil is priced in USD is because the US has the world's strongest economy, is the center of innovation, strong law, strong government, military might and the bastion of capitalism. There is no other country that combines the US' economic size, dynamism and rule of law. Investors know this and as a currency is backed by nothing more than the good faith of its government, the USD is the safest place to invest. You can certainly disagree and decide to buy in Euros or Yuan or Rand, but that is not the decision that the vast majority of international investors have made or continue to make.
As long as investors see the USD as the lowest risk currency, oil will be priced in USD.
Iran
My opening thought: These guys must be crazy. Threatening to wipe a sovereign state off the map, creating a dance troupe to celebrate nuclear molecules and increasing rhetoric as the world turns its attention more and more to its nuclear ambitions - it is insanity, and oil prices know it.
Some argue that Iran is a rational actor and thus MAD assures us that the regime will not unleash a nuclear armageddon. Yet, I harken back to the Japanese in WW2 who launched an assault on Pearl Harbour that led, by way of WW2, to the demise of the existing regime because it was arrogant enough to think that the US would shrink from battle and profer the Pacific to Japanese expansion. If Iran, similar to 1930s Japan, seeing itself as an ascendant power, believes that the US will capitulate (as the regime's current rhetoric indicates) in the face of a nuclear strike against its territory or assets, then why not do so - it is a rational action to launch the first, and thus only, strike. Rationality appears less than ideal.
Ironically, if the US is truly concerned that Iran will use its nuclear arsenal, the US should be willing to attack and eliminate the weapons (since diplomacy, at least currently, seems pointless). However, if the US is not willing to prevent Iran's acquisition of nuclear weapons, then the Iranians are likely to conclude that the US can be easily pushed around by a nuclear-armed Iran. In the end, the US will have to face down the regime. Better pre-nuclear Iran than post.
