Is Gold The Real Reason For Nato’s Action In Libya
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Is Gold The Real Reason For Nato’s Action In Libya
It’s all over the Internet… hundreds of similar-sounding articles proclaiming that the NATO air strikes against Muammar Gaddafi’s Libya, are motivated not by humanitarian concerns or even by oil, but by Gold!
The articles apparently began appearing in mid-March. Within a few weeks, a slick “news video” (“Gaddafi gold-for-oil, dollar-doom plans behind Libya mission”) appeared on YouTube, with the same message… and the message is disturbing. The articles and video all made the following startling and disturbing claims:
1. Just prior to the air strikes, Gaddafi had planned to introduce a new currency, the “Gold Dinar”.
2. The currency was to be supported by Libya’s massive gold reserves of 144 tonnes.
3. The gold coin was to be accepted throughout Africa and the Middle East and would have been the only currency accepted for purchases of oil.
4. This strategy would likely crush both the Dollar and the Euro, making the Dinar the dominant international currency.
5. The NATO military action is the result of a US-led plan to crush Gaddafi’s currency plans and to protect Western financial interests. The military action is supported by US oil interests, who are seeking to obtain access to Libya’s massive oil reserves.
Certainly, the wisdom of the current strategy and tactics used in Libya are open to debate. But a cautious examination of the facts makes Gold an unlikely “cause” for the current conflict.
1. Was Gaddafi sponsoring the “Gold Dinar”? Yes, he has proposed similar plans in 1996, 2000, and more recently in 2009 when he was head of the African Union. However, in 2010, the African Union rejected his plans for a gold currency issued by the “United States of Africa” and chose not to re-new his term in office.
2. Does Libya have reserves of 144 tonnes. Yes, currently Libya’s gold reserves are held in Libya. However, while 144 tonnes is a great deal of gold, it places Libya only 25th in the world… Libya’s reserves are, as an example, only about 1/3 of the reserves held by Portugal.
3. Was the Gold Dinar concept widely accepted? No. While Gaddafi’s proposals have been politely discussed over the years, there is little sign that other nations in the area were ready to convert to a gold-based Libyan-sponsored African currency. In fact, a common African currency has been planned since the 1990s by the African Union but even its acceptance is encountering widespread hesitation throughout the continent. The likelihood of Middle-eastern acceptance is questionable since a number of these same oil-producing nations are currently supporting the anti-Gaddifi, Libyan rebels.
4. Would the release of the Gold Dinar ruin the Dollar and the Euro? No. There are two reasons why not:
• The Gold Dinar would very likely not enjoy the level of acceptance that would give African and Middle Eastern oil-producers the kind of currency dominance described in the articles.
• Even Libya would be unlikely to implement any strategy that would destroy the Dollar and the Euro. Why? Because Libya’s gold reserves are only 5.6% of its total currency exchange reserves… that means that 94.4% of Libya’s currency reserves are held, not in gold, but in something else… almost certainly Dollar and Euro based assets… and even Gaddafi’s enemies say, “…he’s crazy… but he’s not stupid!”
5. Is the US leading the attack against Gaddafi? No. A review of events over the last 60 days, indicate that Britain and France have taken the lead, both diplomatically and militarily.
Initially, the military action was authorized by the UN Security Council and then managed by NATO. In fact, both France and Britain have criticized NATO for not expanding the scope of action in Libya. As to oil, Libya is an oil-exporting nation, but its reserves are only about 2% of world reserves and its current low production levels make it only the fourth largest producer in Africa.
So, where did all those articles and videos come from? Like so much Internet gossip, the original source for the articles may never be clear. But the video originated from RT (RussiaToday), a media outlet, funded by the Russian Federation. It may not be coincidental that the video was released in the midst of a series of vehement Russian complaints about western attacks on its long-time ally, Muammar Gaddafi.
So if not for gold or oil, why is NATO in Libya? Most unbiased observers believe that the reasons for the intervention in Libya have more to do with international posturing and less with grand conspiracies… the Libyan uprising occurred in the midst of a pattern of democratic revolts across the region. These observers believe that European and Western governments felt that it would be viewed as disingenuous to encourage such revolts, but to be unwilling to provide aid if things went awry… and Britain and France led the march.
The Libyan military conflict may not be driven by gold, but its impact on the gold markets will be felt regardless of the outcome. Any instability in this region will affect the oil markets, and those perceived effects on oil will continue to drive gold prices higher.
Originally posted by GoldBuzzer on 10/05/11
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