International Currency

Is international currency dealing nothing more than smoke and mirrors?
OK, so someone sells dollars and buys euros, and, because of the exchange rate, makes a packet of money, for example. Nothing was produced and sold, and no service was provided and paid for. So the profit from the transaction comes literally from nowhere. So how does one spend what does not exist? Is anyone out of pocket? It's all a magical mystery. How can we run a world this way?

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Why is the USA the wealthiest country on earth?
and why is the US dollar the "international currency" used all over the world?

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HOW will the USA defend the dollar?
So, how important is it that oil continue to be denominated in dollars? Would the United States wage war to defend the dollar's status as the world's "reserve currency"? The answer to this question could come as early as this week, since the long-awaited Iranian Oil Bourse is scheduled to open between February 1-11. According to Iran's Finance Minister Davoud Danesh-Jafari, "All preparations have been made to launch the bourse; it will open during the 10-day Dawn (the ceremonies marking the victory of the 1979 Islamic Revolution in Iran) The bourse is considered a direct threat to the continued global dominance of the dollar because it will require that Iranian "oil, petrochemicals and gas" be traded in "non-dollar currencies". (Press TV, Iran) The petrodollar system is no different than the gold standard. Today's currency is simply underwritten by the one vital source of energy upon which every industrialized society depends---oil. If the dollar is de-linked from oil; it will no longer serve as the de-facto international currency and the US will be forced to reduce its massive trade deficits, rebuild its manufacturing capacity, and become an export nation again. The only alternative is to create a network of client regimes who repress the collective aspirations of their people so they can faithfully follow directives from Washington. As to whether the Bush administration would start a war to defend dollar hegemony; that's a question that should be asked of Saddam Hussein. Iraq was invaded just six months after Saddam converted to the euro. The message is clear; the Empire will defend its currency.

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