Iranians to Price Oil in Euros and Yen

If you remain skeptical about the possibility of a United States/Iranian confrontation in the near future, Iran's refusal to sell oil in dollars should dispel any lingering doubts.

In a lot of ways, economic warfare is deadlier than conventional warfare. Simply put, Iran's refusal to accept dollars for oil will trigger an increase in demand for other (more stable) currencies like the Euro and the Yen. Iran's decision, coupled with the Federal Reserve's latest rate cut, means more dollars will compete for fewer goods in the world economy. This is inflation in its simplest form.

How will that impact the United States' policy towards Iran? Well, there's a (recent) historical precedent to consider here, as Saddam Hussein did the same thing in November, 2000. While I do not contend that we invaded Iraq solely to defend the dollar's hegemony in the world market, there is a significant amount of literature available to suggest Hussein's decision to diversify his country's holdings played a major role in our ousting of the dictator.

Is the deliberate destabilization of a country's currency enough to drive that nation towards open conflict? Absolutely. A country's currency serves as its economic bloodline to prosperity and the well-being of its citizens. Given that the United States has been itching for a reason--any reason--to strike Iran, and that effort has received (at best) lukewarm support, how much more support is likely to be drummed up when we begin to read stories blaming Iran for our economic woes?

Make no mistake, the drumbeat for war will increase in intensity over the coming months and, under a constant deluge of propaganda, American support for another pointless war in the middle east will increase. As the economy goes south, support for war will increase. This formula isn't new or groundbreaking...it has been perfected over the years and experienced great success.

Unfortunately, most Americans refuse to confront the reality associated with years and years of reckless spending and the continuous expansion of the welfare/warfare state. Instead, we embrace a series of programs and reforms that will only result in prolonged agony and an even deeper recession. You cannot possibly solve government-generated problems with more government; such "cures" are tantamount to curing an alcoholic by giving him a job as a bartender. Yet, due to economic ignorance or general ambivalence, Americans are doing just that.

I hope I am wrong about my prediction in the coming months, and that America begins to address our present economic woes using methods other than reducing interest rates and flooding the world market with more worthless dollars. It should be obvious by now that this Keynesian practice hasn't worked, nor will it ever work.

It is time for serious action in our economy, and the government can kick things off by legalizing competing currencies. It goes without saying that, had America stuck to any semblance of a gold standard, America's supply of oil would be secure and not subjected to the scares that are inherent in a fiat banking world. Sound money knows no borders, nationalities, or codes...and senseless wars to defend a worthless currency would never be fought, much less entertained.