Real Reasons For The Unclear Deal

Posted in Business, Current Affairs, Media, Uncategorized by Anuraag Sanghi on September 26, 2008

Democrat chairman of the house foreign affairs committee and non-proliferation hard-liner Howard Berman continued with his negative tactics and introduced a new version of the nuclear deal bill in the House Representatives that would be unacceptable to India. The Berman bill also has a killer provision on Iran that links India’s cooperation on Iran to the nuclear agreement, sources said. – (N-Deal: Berman introduces killer amendment, in Economic Times, dated 26 Sep, 2008, 0439 hrs IST, ET Bureau)

Outline of Nuclear Reactor Design

My post dated , September 20, 2008,123 Agreement – What Manubhai Does Not Tell Us, But Hurts Us talked about what could be the real reason why the US is so eager to do this deal with India. Iran with its Iran Oil Borse is a significantly determined effort to shake up the dollar hegemony. And that is something that has the USA rattled. No question!

With the 123 Deal – or without it, India will get the technology. That is not in question. It is another question whether India can at all partner with Iran to establish an alternate world currency (system).

So, my friends at the ET bureau, please note that the ‘negative tactics’ by Howard Berman are really desperate measures – to save the dollar hegemony.

3 Responses

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  1. Galeo Rhinus said, on September 26, 2008 at 2:11 pm

    I would partly agree with your thesis. There’s an element in your analysis that is missing, which is, what happens next to the dollar?

    History can be of some help. Although puny by today’s standards, the dollar derived significant gains as the fiat currency from 68 to 71 before nixon killed it. The US owed the middle east and other places in dollars so why pay back a strong currency.

    The same situation exists today. Why pay back in an expensive dollar.

    The dollar will be whacked by the US itself. The question is when and how. Perhaps the timing of the demise is of key… what you might have here about Iran is perhaps the timing of the demise… perhaps the US wants to time it at particular point to coincide with some global event…

  2. Anuraag Sanghi said, on September 27, 2008 at 8:11 am

    I have a feeling that the Bush Whack may finally turn out to be just that!

    There may be a huge dollar devaluation which will give China, Japan, Russia and India massive ‘haircuts’ on their dollar holdings!

  3. Galeo Rhinus said, on September 27, 2008 at 6:06 pm

    Agree… I think these “congressional” hearings for a bailout will lead to some massive printing of the dollars to keep the “liquidity” in the markets… but devalue the dollar. The US will see inflation – but the Dollar asset holders will get screwed…

    …will China stay still?

    Remember that the events from 1933 to 1940 were all provocations and then the oil embargo of 1940 or Japan was considered an act of war by Japan. They pulled out of India 3 months before pearl harbor. The war, according to the Japanese, had started months before they attacked Pearl Harbor. The US simply chose not to advertise that Japan had declared war – expressing shock an unpreparedness when attacked.

    Will China do the same?

    My guess is that both the US and China will not use their territories as battlegrounds.

    A weak India will get dragged into something that could deeply hurt India.

    This game needs to be played by someone whose foreign policy skills are those of a chess master.

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