War is a racket.

Money is fictional.

These two statements explain all wars, of course, but particularly the adventures of the western powers in the Middle East in the last 2+ decades.  The first statement was spoken by Maj. Gen. Smedley Butler–an expert on the subject–who put it like this:

“WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.”

So what is all the western saber-rattling about in Russia, Iran, China?  What were the wars in Iraq and Afghanistan about?  Indeed, these wars were, as Butler says, not what they seem to the majority of the people.

Think of it this way–remember how the U.S. was supposed to “get the Iraqi oil” (as memorialized by a Time magazine reporter in the story “US Companies Shut Out as Iraq Auctions Its Oil Fields“?  That hasn’t worked out too well for people like you and me, as gas prices in California (where I now live) were approximately $1.52 for regular before we went “to get Iraq’s oil.”  This week in California–some 11 years after the invasion–I paid $4.05 for regular.  So we did not get the Iraqi oil, as it turns out.  But oil companies made out like bandits (“Exxon reports record profit of nearly $16 billion”) and continue to do so.  So did military contractors. But I’m getting off the subject, talking about what Iraq wasn’t about rather than what it was about.

Dollar hegemony is the point of all this

And that brings us to our second statement above, that “money is fictional.”  What does that mean, exactly?  Well, I put it like this at The Air Standard:

“…keep in mind that all money is fictional…Money must be created by someone, somewhere, because money does not exist in nature–except to the extent that a natural item like gold or salt might be assigned the properties of money.  Despite what the typical Western economics professor might say, money does not just naturally come into being as a consequence of people needing to exchange things…

It is beyond dispute that money can be–and has been–anything: gold, paper, shells, sticks, salt, binary code, cigarettes, fabric, etc.,…

The dollar, then, is fictional: created out of nothing and backed by nothing.  It has no inherent value.  It is only given value by people’s belief that it does have value and can be used to purchase goods and services.

As we have seen, however, the dollar has lost almost all of its value (“Your Money Is Worthless By Design“) and many people have started to lose faith in the dollar, especially with the rampant QE that is devaluing the dollar and thereby undermining the power of large holders of dollar reserves, like China, or countries that have to trade their oil in dollars–like Iran.

So Iran, for instance, has stopped using the dollar for oil purchases because the dollar is worthless.  Russia has stopped using the dollar (see “Iran, Russia dump dollar for rial, ruble“).  China is always making noise about dumping the dollar (or someone is suggesting it to them.)  Great article here on Russia and the petrodollar (“Forget Russia Dumping U.S. Treasuries … Here’s the REAL Economic Threat”):

“Russia threatened to dump its U.S. treasuries if America imposed sanctions regarding Putin’s action in the Crimea.

Zero Hedge argues that Russia has already done so.

But veteran investor Jim Sinclair argues that Russia has a much scarier financial attack which it can use against the U.S.

Specifically, Sinclair says that if Russia accepts payment for oil and gas in any currency other than the dollar – whether it’s gold, the Euro, the Ruble, the Rupee, or anything else – then the U.S. petrodollar system will collapse…“

Since–as we have seen–money is created by man and can be anything, someone who has come up with a system of money that is used by the entire world and enriches that “someone,” that “someone” has to have some way to enforce the use of this system of money or he will go broke.  That “someone” in this case is the Federal Reserve.

And the banks that control the United States and issue the world’s reserve currency via the Federal Reserve can’t allow competing currencies; creating money from thin air to buy off the real wealth of the world is their racket and no one else’s.  So off to another war–but about propping up a dying currency, not to stop genocide or for any other lofty, noble reason.  Because war is a racket and money is fictional.