ECB's Weidmann On Gold: "Money Is A Social Convention"

Tyler Durden's picture

A few weeks ago we noted Bundesbank president and ECB governing council member Jens Weidmann's analogy between the Faustian bargain offered by a money-printing Mephistopheles in Goethe's classic prose and today's ubiquitous oh-so-tempting short-term solution to everyone's pain. His full speech (below), while a little dramatic, should indeed strike fear into many with its clarity. The financial power of a central bank is unlimited in principle; it does not have to acquire beforehand the money it lends or uses for payments. Many believe Goethe was portraying the modern economy with its creation of paper money as a continuation of alchemy by other means. While traditional alchemists attempted to turn lead into gold, in the modern economy, paper was made into money. Indeed, the fact that central banks can create money out of thin air, so to speak, is something that many observers are likely to find surprising and strange, perhaps mystical and dreamlike, too  – or even nightmarish. Of course, Weidmann concludes, it is important that central bankers, who are in charge of a public good – in this case, stable money – bolster public confidence by explaining their policies. The best protection against temptation in monetary policy is an enlightened and stability-oriented society [and Gold!].



Jens Weidmann; Speech at the 18th colloquium of the Institute for Bank-Historical Research (IBF) in Frankfurt

The caption for today’s event is “Paper money – Public finances – Inflation.  Did Goethe hit upon a core problem of monetary policy?

Money and money creation

I wish to begin with a question which appears trivial at first glance but which, as experience has shown, is particularly difficult. What is money exactly? A succinct response from an economist would be: Money is what money does.

As money is defined by its functions, various instruments are fundamentally capable of acting as money, as long as they can be used as a medium of exchange, medium of payment and store of value.

Shells were previously used as money in some countries, for example, as were furs, salt or pearls. Livestock could also serve as money – the Latin word for cattle is “pecus” from which the word “pecunia”, meaning money, is derived.

Concrete objects have served as money for most of human history; we may therefore speak of commodity money. A great deal of trust was placed in particular in precious and rare metals – gold first and foremost –  due to their assumed intrinsic value.

In its function as a medium of exchange, medium of payment and store of value, gold is thus, in a sense, a timeless classic.“To gold they tend, on gold depend, all things!”, says Margaret in the First Part of Goethe’s Faust.

However, the money that we carry around in the form of banknotes and coins no longer has anything to do with commodity money. Money has no longer been linked to gold reserves since the US dollar was removed from the gold standard in 1971.

In short: today’s money is no longer backed by any real assets. Banknotes are printed paper – and the experts amongst you know that the euro is printed on paper made of cotton – coins are minted metal.

That banknotes and coins are accepted as a medium of payment in our daily lives also has to do with the fact that they are the only legal tender. However, ultimately the acceptance of banknotes is based on public confidence that it can use this paper money to make purchases.

In this sense, money is a social convention – it has no intrinsic value which comes before its use; instead, its value is created by its constant exchange and use as money. By the way, this recognition that trust is central, or even constitutive, for the properties of money is very old; it was already discussed in the 4th century BC by Aristotle in his Politics and Nicomachean Ethics.

In recent times, in particular, many citizens are asking about the origin of money: where do the central banks actually acquire the huge amounts of money that they need to give billions in loans to the banking system as part of monetary policy operations or to make other purchases? Why it is often repeated in this context that central banks have virtually unlimited firepower? 

Central banks create money by granting commercial banks credit against collateral or by buying assets such as bonds. The financial power of a central bank is unlimited in principle; it does not have to acquire beforehand the money it lends or uses for payments, but can basically create it out of thin air.

The printing of money is an appropriate image here; from an economic perspective, the printing press is not necessary, as the creation of money primarily shows up on the central bank’s balance sheet, on its accounts.

How does Johann Wolfgang von Goethe enter the equation when talking about the creation of money. Why have I widened the discussion further?

Money creation, Goethe, Faust and alchemy

Let me remind you briefly of the “money creation” scene in Act One of the Second Part of Faust. Mephistopheles, disguised as a fool, talks to the Emperor, who is in severe financial distress, and says

“In this world, what isn’t lacking, somewhere, though? Sometimes it’s this, or that: here’s what’s missing’s gold”“

The Emperor finally responds to Mephistopheles’  subtle attempt to persuade him,

“I’m tired of the eternal ‘if and when’:

We’re short of gold, well fine, so fetch some then”

To which Mephistopheles replies

“I’ll fetch what you wish, and I’ll fetch more”

In the commotion of the nocturnal masquerade ball, he persuades the Emperor to sign a document  – a document  which Mephistopheles has reproduced over night and then distributed as paper money.

Those involved are quite taken by the initial success of this measure. The Chancellor is delighted to announce

“See and hear the scroll, heavy with destiny, – (referring to the paper money that has been created) –

that’s changed to happiness our misery”

He reads,

To whom it concerns, may you all know,

This paper’s worth a thousand crowns or so

A little later, Mephistopheles stirs up the general elation even further by saying

“Such paper’s convenient, for rather than a lot

Of gold and silver, you know what you’ve got.

You’ve no need of bartering and exchanging,

Just drown your needs in wine and love-making.”

Those concerned are so overjoyed by this apparent blessing that they do not even suspect that things could get out of hand.

In the Second Part of Faust, the state can get rid of its debt to begin with. At the same time, private consumer demand rises sharply, fuelling an upswing. In due course, however, all this activity degenerates into inflation, destroying the monetary system because the money rapidly loses it value.

It is very striking that Goethe throws light in this way on the potentially hazardous connection between paper money creation, public finances and inflation – and thus on one core problem of uncovered monetary systems. This is all the more remarkable given that Faust and Goethe are not generally immediately associated with economics, especially not with such central areas of conflicting monetary policy priorities.

The fact that Faust can indeed be interpreted in economic terms has been demonstrated, not least, by Professor Adolf Hüttl, who used to be Vice-President of the former Land Central Bank in Hesse. I am delighted that he is in attendance here today. Back in 1965, he wrote a very insightful article in the Bundesbank’s staff magazine about  “Money in the Second Part of Goethe’s Faust”.

In the mid-1980s, while teaching in Sankt Gallen, Professor Hans Christoph Binswanger – who I am pleased to say is also here today – took a similar line and brought out a book entitled “Money and Magic: a Critique of the Modern Economy in the Light of Goethe’s Faust”.

Binswanger’s thesis is that Goethe was portraying the modern economy with its creation of paper money as a continuation of alchemy by other means. While traditional alchemists attempted to turn lead into gold, in the modern economy, paper was made into money.

Indeed, the fact that central banks can create money out of thin air, so to speak, is something that many observers are likely to find surprising and strange, perhaps mystical and dreamlike, too  – or even nightmarish.

The responsibilities of an independent central bank

If central banks can potentially create an unlimited amount of money out of thin air, how can we ensure that money remains sufficiently scarce to preserve its value? Does this ability to create money more or less at will not create the temptation to take advantage of this instrument to create additional leeway short term, even at the risk of highly probable long-term damage?

Yes, this temptation certainly does exist, and many in monetary history have succumbed to it. Taking a look back in time, this was often the reason for establishing a central bank: to provide those in power with free access to seemingly unlimited financial resources.

However, such government interference in central banking, combined with the government’s large demand for funding, often led to a strong expansion in the volume of money in circulation, causing it to lose value through inflation.

In light of this experience, central banks were subsequently established as independent institutions, with the mandate to safeguard the value of money, in order to explicitly keep the government from co-opting monetary policy.

The independence of central banks is an extraordinary privilege – it is, however, not an end in itself. Instead, its primary purpose is to use its credibility to ensure that monetary policy can focus unhindered on preserving the value of money.

Independent monetary policy combined with policymakers with a well-functioning, stability-oriented compass are a necessary – but not a sufficient - condition for preserving the purchasing power of money as well as public confidence in it.

Of course, it is important that central bankers, who are in charge of a public good – in this case, stable money – bolster public confidence by explaining their policies.

The best protection against temptation in monetary policy is an enlightened and stability-oriented society.

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Stackers's picture

Central bank fiat money is NOT the problem.

The problem is credit debt based fractional reserve banking.

Every bank is its own little money printing machine of leveraged fractional reserve credit.

The 10-1 limit is a joke as proven in 2008

Spitzer's picture

Fiat or digital works fine as a MEDIUM OF EXCHANGE only.

As long as nobody is saving in fiat, then politicians and central banks have no access to the purchasing power.

Anyone saving in fiat is as much to blame as the central bankers.

Anyone who saves in any debt instrument is as guilty as central bankers or politicians.

Poor Grogman's picture

That is true but in order to use it as a medium of exchange many still prefer to keep some cash in their pocket.

As long as you carry the actual money in your possession you are getting taxed through inflation.

In other words there is a carry cost for (using FIAT money.

Additionally even if you save in gold, and use FIAT for purchases you are getting taxed when you change your so called " Capital Gains" in gold back into FIAT.

Don't worry the government will tax you either way. This supposed panacea of saving in gold and using Fiat for purchases has already been considered by the Money Changers.

The present FIAT system is the best method yet devised of stealing your wealth and labour while pretending to help you.

Debt serfdom bitchez....

Spitzer's picture

-Once it is established that there is literally nothing to be gained by printing money (like it is in allot of banana republics and developing nations that live within their means) then holding cash for a short to meduim period of time will no carrying cost issue.

-Germany has no capital gains on physical gold and other Euro nations may follow suit.

-Singapore has no capital gains.

- there is no VAT tax on gold in the eurozone

Go to any developing nation and see how well theft via inflation is working there.. It doesnt because they already have their MOE and SOV separated. Its the west that is so blind to this.

Zeroexperience2010's picture

F.O.F.O.A reader as well ;) ?

Fully agree that people should not use fiat as a SOV, only MOE. This is what happens in HI countries, only there theSOV is mostly USD, people get paid in Zimbabwe D. buy stuff immediately and remaining is converted to USD. Only as the major 'stable' currencies start being debased, there is only gold left as SOV (forget silver, no CB holds it, and they are part of the giants).

Germany has actually capital gains taxes on gold, you have to hold it at least 12 months to not have it. Which is ok, as most people will use it as SOV, and not to trade. Additionnally you can buy up to 15000 EUR woth of if anonymously (ie with cash no ID to show), it's only when you sell to a dealer that you have to disclose your identity, but then you are free to sell to anyone as well.

There is actually no VAT in the EU, not only eurozone, on investment grade gold (bullion) as well of course in Switzerland.

Poor Grogman's picture

It seems my point stands that FOFOAs proposals simply create other avenues for wealth confiscation by the state.

saturn's picture

So the dinosaurs died because they did not have a central bank?

GubbermintWorker's picture

Capital gains? When I sell my gold or silver its done via cash, no records. The same as my PM purchases. Capital gains....LOL!

Muppet of the Universe's picture


The singularity is coming.

Al Gorerhythm's picture

When the two work in collusion, as they do now, it is a gigantic problem.

The problem with fiat is that it is a cartel controlled money enshrined by government sanction. There are no competing currencies in use as a benchmark for measuring honest money exchanges between individuals, which is the essence of trade. Even in barter, without a benchmark of value, it is hard to guage if the item you are trading for another is equal in value. If you are accepting money, you have to have complete trust in the money exchanged for the good, if there is to be a transaction that implies settlement. If the money supplied doesn't fulfil  any of the "acceptable-to-all-parties" functions of money, then it isn't a true exchange of values. In these times, money has lost its savings function. It isn't a store of value over time, therefor it can only be described as a medium of exchange.

As a measure, gold's price acts as a barometer to the falling value of the purchasing power or exchange value of the dollar, although  other select commodities or money will do the same, if run in parallel to it (the fiat currency). Gold prices the purchasing power of paper currencies. Not 1:1 but surely a useful barometer of monetary policy.

The role of the central banker today is to ensure that competing currencies do not gain too much value compared to the dollar. That's not a benchmark measure. It's a measureless, holographic mesmerization of value.

We need competing currencies, not floating. We need an inelastic yardstick.

All Risk No Reward's picture

Debt Money Tyrants capturing governments to inflict Debt Money Tyranny on unsuspecting, ignorant, apathetic populations is the problem.

Debt Money Tyranny - the money flow chart of the sovereigns and the subjugated:

Urban Redneck's picture

People's trust in partnership of Government & Central banks to do what is Right as opposed to what is Easy or Expedient is the problem, because the People have a mistaken notion that money is wealth (or a store of value) as opposed to a medium of exchange (and tool of the State, or a "social convention").  The pespective of the PEOPLE at ground level is very different from the perspective of TPTB wielding the levers of power.

 <CTRL-P> brings to mind Ben's response to Ron Paul as to the nature of gold ("tradition" vs money). I don't think Ben was necessarily lying when he said he doesn't think gold is money. Money is something that Ben can print at will, gold is not. If he lied in his response to Rep. Paul's question it would be when he stated that Treasury bills are not money, since they are the primary currency used between central banks for non-overnight transactions (f/x reserves). However, in fairness to Ben's sense of self importance the creation of Tbills is done at the will of the State's Treasury, not its Central Bank. Central Bankers are nothing more than hired help to those who direct the State.

To quote J.P. Morgan, "I don't know as I want a lawyer to tell me what I cannot do. I hire him to tell how to do what I want to do." To promote the phrase to the level of TPTB, "I don't know as I want a central banker to tell me what I cannot finance. I hire him to tell how to finance what I want to do."

Gold is a relic of a barbarous age when TPTB had to find some fools to loan them gold to finance their acquisition of other (non-gold) resources . In this more "sophisticated" age TPTB simply order their Central Bankers to print the money, and the costs are seamlessly passed on to their muppets through decreased purchasing power. The new fools are built into the system and do not have to be found or convinced to participate. 

The war between credit and resources. The war between money and wealth. It's a matter of perspective. Credit and money are the opposite faces of the heads-I-win, tales-you-lose trick of the central banks to support the State's ambitions. If Money (or credit) was wealth to TPTB then there would be fewer wars, as TPTB could simply have their Central Bankers and Treasurers print wealth or issue credit. TPTB measure wealth (and power) in terms of the means of production (raw materials, factories, infrastructure, muppets, and energy resources). Muppets, however, measure wealth (and power) in terms of money. Gold (and precious metals generally) are the overlap of the two measuring systems (lead and brass also overlap but my time is short today).

Spitzer's picture

The "TBTB" as you call it, is afloat on Meduim of exchange denominated savings.

For all that is said about "TBTB", this is an issue between the spenders and the savers. Not the TBTB and the people. Think of how many regular people (spenders) that also benifit from medium of exchange denominated savings.

It is only net producers and savers that get screwed by this. Not debtors



Urban Redneck's picture

That gets into the question of who is really are TPTB. Big Indutrial Business- such as Exxon, Cargill, Lockeed, and Boeing (outside of Big Financial Business or AAPL) don't like to stockpile excess cash unless there is economic uncertainty. Even the big insurance companies setup equity (and hybrid) funds to dispose of current cash deliver future cash flow. Prior to the 2006-2008 meltdown, and the subsequent breakup and firesale by Treasury, AIG had a huge cash disposal operation which was then sold to Richard Li. The current balance sheet cash position of big business is a historical aberration, and extremely problematic in an environment of negative real interest rates and the FED monopolizing and destroying the attractiveness the low-risk "savings" vehicles.  

There has historically been tension and power struggle between Treasury and the Federal Reserve. This has been largely mitigated by the wholesale purchase of the US government by the banking industry lobby with its excess cash. When the Secretary of the Treasury is, or has been, a banker- there been a direct correlation to higher incidences of financial bailouts of the banking industry. However, when TSHTF the Secretary of the Treasury does have the authority to nationalize the five banks (which would effectively nationalize the Federal Reserve and most of the derivatives mess). Hence, it is in Wall Street's best interest to keep of their own in that office, since the Secretary can effectively bypass the industry's pet congress-critters.

DoChenRollingBearing's picture

If you do not own some, gold is without doubt the best diversification in town.  Buy early, buy often!

francis_sawyer's picture

Another jew opinion about money... how refreshing! :-)

vast-dom's picture

says the unenlightened anti-semite. 

Spitzer's picture

Its Zerohedge.

Somebody has to warm up the ovens on every post.

otto skorzeny's picture

the oven thing is a big lie that the Jews use to extract $ under the guise of guilt

Spitzer's picture

Keep turning that knob... The elements are almost red hot.

otto skorzeny's picture

As a "physical gold advocate" and fanboy of The Austrian School of Economics you as well as anyone should realize that gold extraction from people's teeth  is much more economically efficient than mining it.

Spitzer's picture

As a practicing Nazi and a fanboy of jew conspiracy, you should realize that you waste space in the comments section of this forum.

JOYFUL's picture

Your obession with ovens identifies you as a practicing kook, whose desperate attempts to maintain a hoary mythology about Zyklon B have descended into farce...take some time off for reflection and renewal - your schtick is burnt toast!

Spitzer's picture

mythology about Zyklon B

Amadenjad is that you ?

Ghordius's picture

even if Zyklon B would be only the stuff of a "hoary mythology" - the persecutions, the stamps in the passports, the searches, expropriations and deportations are undeniable, historic, horrible facts, as much as endless other pogroms

Acet's picture

I wouldn't take that discussion seriously: it seems to me that somebody's paid sock puppets are doing their "make the site look like a bunch of nutcases" show in the early part of the thread to scare away the normals.

It seems to me that there are multiple States (as in, countries) that would rather not see ZH go mainstream and they certainly can afford to pay one or more persons to sit and watch for the more relevant postings and do their Itchy-n-Scratchy routine to make us all look bad. No conspiracy required, just a couple of desks in an Intelligence Agency or PR firm and less than a hundred thousand of dollars a year - I bet trolling forums is entry level work that's gives to junior people in one of those places.

Ghordius's picture

you think so? don't know. I get often enough the accusation of being a paid sock puppet or an intelligence agent myself. JOYFUL looks genuine, to me.

mea culpa: I also enjoy putting a "baiting comment" (aka "trolling") in the room and I don't conform to some parts of the netiquette by often rephrasing positions in the way I understand them (aka "strawmanning").


anyway, IMO the worst sin is still not getting back to the original article, so my two cents:

nice to see our dear Bundesbank president and ECB governing council member Jens Weidmann being aware of what money is. "Money is what money does". And "money is a social convention".

All very good. And it reminds me to save in gold.

to his: "the independence of central banks is an extraordinary privilege" I just have a reminder: yes, during the discussions of the liberal revolutions it was deemed just and fair to grant the CBs independence from politics. because it was obvious that politics can be corrupted by this power and adopt short term monetary solutions to fiscal problems.

but at that time nobody ever envisioned banks getting the size of today, and so generating the phenomenons of Too Big to Fail, Too Big to Bail Out and Too Big to Jail.

Break up the banks. Outlaw (again) the casino-derivatives like CDSs. Tax betting. Outlaw stock exchange practices mired in making deep, liquid markets shallower (by stretching time, for example, as the HTFs do).

marathonman's picture

nobody envisioned banks getting the size of today,

I think that was the plan all along when the Central Bank eventually would own the government.  Breaking up the banks is not an option when they own the government.  The government had the chance in '08 to own the banks and instead W and the Democrats gave us all to an insolvent Goldman Sachs.  The independent central bank is the enabler of big government, the American Empire, and the loss of our freedoms and constitutional protections.  Kill the beast.  End the Fed.  Jail the TBTF.

Ghordius's picture

your argument is the newest one, I'm thinking at an older one: banks in the 19th Century were mostly family affairs. I'm thinking that rules conceived for banks with less than 50 employees might just not fit banks with 5'000 and more.

JOYFUL's picture

Indeed, the "undeniable, historic, horrible facts, as much as endless other pogroms" are as much of interest(if not more!)for the question of who was doing the terrorizing of whom...outside of a group of rapidly decreasing hoary mythologists, its widely known that khazarian kooks whose sionist project required the elimination of that element of eastern european jewry not amenable\desirable to their commune in the desert were the real instigators of 'nazism' , "anti-semitic" campaigns and the rest of your list.

Guys like Spitzer are just mad that the schtick that worked so well for their parents generation is deader than a duck in the Gulf of BP!

Ghordius's picture

J, there are nowadays two main fronts on this battle of ideas: those who want to have the freedom to attack (deport, disfranchise, tax, harass, hamper) minorities and those who defend the liberty of minorites. and the rest are fringes have pet loves and/or hates. just saying... I think you can imagine where I stand, though I'd be happy to hear why I should change my position.

WSMassiv's picture

Realize that the people in charge are not religious in any sense what so ever.  Jews/Israel/Muslim/Repub/Democrat/Conservative/Liberal/Heads/Tails is all being used to divide us from confronting the real power centers.  To keep us occupied enough not to seek the truth, a false hope, a false truth. 

We can all agree that the people that are really in charge are just evil regardless of race, color, or faith...

They are unbridled lustful ego.

You must look past the spoon...

_underscore's picture


Indeed. It's all a marvellous distraction (as any conjurer will tell you) from what the other hand is doing. Add racial & religious cause/effect propaganda to the 'bread & circuses' mix so the population looks at the horizon instead of looking at the sly moves their masters are making, picking their pockets & liberties.

otto skorzeny's picture

I think it's great that guys like you come on ZH and bitch about banks and money and who is in charge of the whole corrupt, greedy mess but when it comes down to admitting who controls it all then everyone turns into Simon Fucking Wiesenthal.

bunnyswanson's picture

This has nothing to do with the good Jewish people.   We all pay for the sins of our fathers.   But it is undeniable - Contempt is in the air.  

Mercury's picture

...but some social conventions have a better track record than others.

If there were say...a way to store electricity indefinitely, exchange it without loss and carry around a small fortune's worth of it in one's pockets then that would probably get a leg up on gold as a universal store of value.

But neither that, nor anything like it is not going to happen any time soon. This type of situation has been around as long as civilization.

Trade-offs have been made.

It's interesting that utility has been eliminated in favor of other virtues but apparently gold's particular combination of pros and cons has made it the reigning and long term fittest survivor.

Which means it's something more than just a social convention.

robertocarlos's picture

Elective Affinity. Those crazy electrons.

otto skorzeny's picture

Ironic that Faust in High German means "fist" which is exactly what Shalom Bernank is sticking up everyone's ass.

Ghordius's picture

actually Faust is a shortening of Faustus - a latin name that means "blessed by Fortune".

And the character of Faust aka Doctor Faustus has it all. But he wants... more.

turbosuperman's picture

Today's money is backed by oil and the nuclear arsenal.

Restricting the industrial economy's ability to grow with gold or any other type of hard money (or even not using fractional reserve banking) would not have made sense during the days of increasing oil production.

Here's a scene from "The Day After the Next Financial Crisis:  US Dollar Collapse"

Spitzer's picture

First of all, nukes also backed the Russian Ruble and it tanked almost hyperinflationarily.

Second, since the 70's, savings is recycled into debt. It is not backed by debt per se.

In the end, freegold will take over.

Freegold- Separation of the meduim of exchange and the store of value of money. Gold for saving, digital/fiat for transacting.

Freegold is at play right now. Take a country like Jamaica for example. Everyone, including the tourists, uses Jamican dollars as a meduim of exchange. But nobody uses them as a store of value, yet they still work fine for a MOE.

That is why inflation shows up so fast in bannana republics. Because there is very limited savings for the printer of the currecy to draw on.

turbosuperman's picture

I'm not saying that nukes backing the dollar means it won't collapse.  I'm saying what will happen when it does.  When our 11 million barrels of oil imports every day stop, the country will shut down.  War will be inevitable.

The petrodollar system is what differentiates the US dollar.  Russians didn't have that.  Gold will probably emerge as a way for a new monetary system, but only after World War III and the deaths of billions.  Inflation shows up outside of the US because we are able to export our inflation (reserve currency, petrodollar).

Saddam turns his back on greenbacks,9171,998512,00.html

In his long-awaited memoir - out tomorrow in the US - Greenspan, 81, who served as chairman of the US Federal Reserve for almost two decades, writes: 'I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.'

Spitzer's picture

Ok so we agree that the US dollar will go the same way as the Ruble. The war in Iraq is a bit different..

Nobody liked Saddam. The whole world wanted him gone.

United Nations Security Council Resolution 1441 is a United Nations Security Council resolution adopted unanimously by the United Nations Security Council on 8 November 2002, offering Iraq under Saddam Hussein "a final opportunity to comply with its disarmament obligations" that had been set out in several previous resolutions (Resolution 660, Resolution 661, Resolution 678, Resolution 686, Resolution 687, Resolution 688, Resolution 707, Resolution 715, Resolution 986, and Resolution 1284)

On 8 November 2002, the Security Council passed Resolution 1441 by a unanimous 15–0 vote; Russia, China, France, and Arab countries such as Syria voted in favor, giving Resolution 1441 wider support than even the 1990 Gulf War resolution.

turbosuperman's picture

Of course, the UN gives a cloak of legitimacy.  The people in it are probably paid off somehow or actually believed the US rhetoric about weapons of mass destruction (there were none) or Libya being a humanitarian mission.  The OPEC nations benefit from the petrodollar system because the US protects their regimes.

If Saddam didn't have oil, no one would have given a rat's ass about him.

Greenspan says it right there:  it's about oil.

Same with Libya.  Gaddaffi wanted to start using a gold dinar.

There's also the Iranian oil bourse that recently started trading oil in currencies other than the US dollar.  That's why they're next.

WSMassiv's picture

Thank you.  You beat me to it.  Nice to see some others speaking the truth.

Spitzer's picture

Im not sold on that. Saddam was a criminal psychopathy and everyone knew it. Nobody liked him and his oil reserves made him dangerous. This guy was crazy man...

The president of Iran doesn't strike me as a picture of sanity either. Im not saying I disagree with you but why do these countries give the west every reason it needs to take them out ?

Saddams record is below. Gaddafe was planning on using fighter jets against his own people. ... Just sayin..

Iran wants to be attacked. The world said that they would give Iran a nuclear powerplant if it wanted one but they insist on nuclear weapons.. Why ?

Why is Iran just asking to be attacked ? Why not just drop the nuke idea cold turkey ?

The Iran–Iraq War. The war began when Iraq invaded Iran, launching a simultaneous invasion by air and land 22 September 1980. Despite calls for a ceasefire by the United Nations Security Council, hostilities continued until 20 August 1988. The war finally ended with United Nations Security Council Resolution 598, a ceasefire brokered by the United Nations which was accepted by both sides. 500,000 dead.

The Invasion of Kuwait, also known as the Iraq-Kuwait War.
In August of 1990, Saddam ordered the Iraqi military, the fourth largest military in the world at the time, to invade Kuwait, leading to the 1991 Gulf War. Iraqi soldiers are accused of torturing and executing hundreds of Kuwaitis, as well as taking hostages and looting. More than 700 oil wells were set on fire and pipelines opened, spilling oil into the Gulf.

1991: Iraqi Scud missiles hit Israel
Iraq has attacked two Israeli cities with Scud missiles (39), prompting fears that Israel may be drawn into the Gulf War. Israel's largest city, Tel Aviv, and Haifa, its main seaport, were hit in the attacks, which began at 0300 local time (0100 GMT), when most residents were asleep.

1988 -- Al-Anfal Campaign

From February to September 1988, Saddam conducted what has been called a genocidal campaign against the Kurdish population. Gen. Ali Hassan al-Majid, or "Chemical Ali," Saddam's cousin, carried out the Al-Anfal operation using chemical weapons. Human Rights Watch estimates between 50,000 and 100,000 died. Kurdish officials and some international human rights groups put the number killed as high as 182,000

Biggest oil spill in history

Location: Kuwait
Gallons: 240 to 336 million

How It Happened:
As Iraqi forces retreated from Kuwait during the first Gulf War, they opened the valves of oil wells and pipelines in a bid to slow the onslaught of American troops. The result was the largest oil spill history has seen. Some 240 million gallons of crude oil flowed into the Persian Gulf. The resulting oil slick spanned an area just larger than the size of the island of Hawaii.

turbosuperman's picture

Okay, it seems you have some interest in believing that the US is some noble nation spreading freedom and democracy.  There were no weapons of mass destruction.  That is a fact.  If it wasn't just about the oil, HW Bush would have taken Baghdad during the first Gulf War.

The United States is an empire.  It uses its military to enforce its financial empire and secure natural resources and shipping routes, allowing it to enjoy a massive economic free lunch (see the trade deficit). 

I enjoy living in an empire.  I enjoy SUVs and all the stuff we have.  I just don't delude myself about what we are.

It's probably better that most of our troops and our people believe that we are a noble nation spreading freedom and democracy.  There is something to be said for blissful ignorance.