Iran to OPEC: Dump the Dollar

In what surely will be spun as further evidence of his bellicosity towards the "civilized" world, Iranian President Mahmoud Ahmadinejad denounced the American dollar as a "worthless piece of paper" during a recent OPEC summit.

As the world's reserve currency--and presently the only currency accepted in the oil trade--the dollar enjoys special favor amongst all nations. America's role as the issuer of dollars is therefore particularly powerful, but only inasmuch as the dollar maintains its purchasing power in the world market. The dollar's steady decline against other currencies has eroded what used to be widespread support for the currency, and has strengthened the argument for another, more stable currency as a replacement.

Discussions about the value of our currency are not likely to crop up in casual conversations in mainstream America. Frankly, it's a boring topic. However, as fuel prices continue to surge to unprecedented levels, it's becoming increasing clear to most people that something has gone awry--and most are not sure how to fix the problem or where to lay the bulk of the blame.

The usual scapegoats are working their way into everyday conversation, with most pundits looking to Washington to find the answer. And Washington is all too happy to use this "crisis" as an opportunity to expand power and influence over the citizenry. Calls for reduced consumption, price controls, energy independence, increased domestic drilling/exploration, etc. have entered the debate, creating the illusion that our politicians have our best interests in mind.

The American citizen's confusion over who or what is causing steep increases in energy prices, coupled with their already itchy trigger finger for war in the Middle East, adds another interesting twist to Iran's proposal to dump the dollar in favor of a stronger currency. With no large-scale army, navy, air force, or coast guard and very few (if any) long-range weapons, Iran is in no position to challenge America's superior military might should America decide to strike Iran's nuclear facilities.

Warfare need not always involve exchanges of bombs and bullets, however. Iran, as well as the other nations comprising OPEC, has the ability to severely cripple the American war machine without ever firing a shot. Should OPEC take Iran's advice and dump the dollar, the potential exists for a prolonged, painful brand of warfare that will affect every American - rampant inflation and an extended downturn in economic activity.

Objectively, it's difficult to argue with Iranian (and OPEC) logic on this issue. After all, America's reckless devaluing of her currency directly affects the prosperity of every other nation that uses the dollar to purchase oil (which is the entire world, as stated above). Iran is a bit of a special case, however. Already under strict UN-levied sanctions with the threat of even tighter restrictions looming, how do you expect the Iranians to react when they are forced to accept the worthless currency of a country who threatens them with military force on a daily basis?

I don't know enough about the Iranian regime to make any comments about them. Certainly, Iran is not paradise, but then again neither is America. The way I see it, America is forcing Iran into a corner, starving their people and inciting further Western hatred in the region. Tightening sanctions and further depriving the Iranian people of needed food, energy, and medical supplies will further destabilize the region and increase the likelihood of hostilities between the two countries. To suggest fomenting conflict has been America's plan all along is far from a stretch, for one need only to look back to Iraq in the 1990's (or Japan prior to WWII) for historical precedent. As long as America or her allies do not fire the first shot, a conflict with Iran--regardless of the weapons used in retaliation--will forever be spun as a defensive conflict.