War With Iran Imminent

From CNN: 6:19 a.m. EDT, Wed April 30, 2008
Iran dumps U.S. dollar for oil trades


If history is any indication, it looks like Iran has just drawn its last straw with the United States. Not a lot of people know this but in 2000 Saddam Hussein announced that he would no longer accept US dollars in the oil for food program and that all payments would need to be made in Euros. A couple years later we were invading Iraq and have now switched the sale of Iraq's oil back to the dollar. This was obviously an attempt to convince OPEC and oil producing nations not to do the same. Today, Iran announced that it would stop conducting oil transactions in US dollars. At a Summit last year Iranian President Mahmoud Ahmadinejad called the US dollar a "worthless piece of paper". Iran stopped accepting the dollar for oil transactions in Europe and Asia in 2003. What, you thought the war in Iraq was about spreading freedom and WMD's?

Oil has traditionally been sold in dollars. Since the US is no longer on the gold standard, we only needed to print money to make more dollars in order to buy our oil but this isn't the case for other countries who had to conduct business with the US in the form of loans, in US dollars, in order to buy oil. This guaranteed that the US and the US dollar would always dominate the world economy and profit from nearly every oil transaction world wide. Now that these oil producing countries are getting less for their oil due to the falling value of the dollar, the only thing that is stopping them from switching the sale of their oil to the Euro is fear of a US attack. Guess what, with Bush's massive failure in Iraq and showing the world that we can't really successfully overthrow a country nor can we win a fight against civilians with small arms and improvised explosives, they no longer fear the threat of war. They know the US military is spread too thin to invade another country and install a new puppet government who will sell the US oil and accept US dollars for those transactions.

What this move by Iran will do is either prompt an attack by the US, especially if Republicans remain in power, or it will encourage other countries to switch to Euros as well. If that happens it will further devalue the US dollar and further increase the value of the Euro. The impact it will have in the US financial markets will be devastating if all of OPEC follows suit. Americans would also be forced to pay what the rest of the world as been paying for gas at about $5 per gallon. The bright side is that we will finally have to become energy dependent and look to other sources of power and reduce our oil and gas consumption. We won't have to worry about SUVs blocking our views of traffic or flipping over every time they slam on their breaks when they see a Starbucks. American car companies will have to invest in new technologies as will the energy sector and that could spawn a new industry and create more jobs. China will have to pin its Yuan to the Euro as opposed to the dollar and their imports will become more expensive and no longer mirror the ups and downs of the dollar. Wal-Mart may actually start buying American products again as imports and the cost of transporting those imports will increase and they will have to rely on US Manufacturers to be their main vendors. Or, we could just bomb Iran and keep things as they have always been.

And now for a little nugget of gold: