"Deal Or War": Is Doomed Dollar Really Behind Obama's Iran Warning?

Tyler Durden's picture

Authored Op-Ed by Finian Cunningham via RT.com,

US President Barack Obama has given an extraordinary ultimatum to the Republican-controlled Congress, arguing that they must not block the nuclear accord with Iran. It’s either “deal or war,” he says.

In a televised nationwide address on August 5, Obama said: “Congressional rejection of this deal leaves any US administration that is absolutely committed to preventing Iran from getting a nuclear weapon with one option: another war in the Middle East. I say this not to be provocative. I am stating a fact.”

The American Congress is due to vote on whether to accept the Joint Comprehensive Plan of Action signed July 14 between Iran and the P5+1 group of world powers – the US, Britain, France, Germany, Russia and China. Republicans are openly vowing to reject the JCPOA, along with hawkish Democrats such as Senator Chuck Schumer. Opposition within the Congress may even be enough to override a presidential veto to push through the nuclear accord.

In his drastic prediction of war, one might assume that Obama is referring to Israel launching a preemptive military strike on Iran with the backing of US Republicans. Or that he is insinuating that Iran will walk from self-imposed restraints on its nuclear program to build a bomb, thus triggering a war.

But what could really be behind Obama’s dire warning of “deal or war” is another scenario – the collapse of the US dollar, and with that the implosion of the US economy.

That scenario was hinted at this week by US Secretary of State John Kerry. Speaking in New York on August 11, Kerry made the candid admission that failure to seal the nuclear deal could result in the US dollar losing its status as the top international reserve currency.

“If we turn around and nix the deal and then tell [US allies], ‘You're going to have to obey our rules and sanctions anyway,’ that is a recipe, very quickly for the American dollar to cease to be the reserve currency of the world.”

In other words, what really concerns the Obama administration is that the sanctions regime it has crafted on Iran – and has compelled other nations to abide by over the past decade – will be finished. And Iran will be open for business with the European Union, as well as China and Russia.

It is significant that within days of signing the Geneva accord, Germany, France, Italy and other EU governments hastened to Tehran to begin lining up lucrative investment opportunities in Iran’s prodigious oil and gas industries. China and Russia are equally well-placed and more than willing to resume trading partnerships with Iran. Russia has signed major deals to expand Iran’s nuclear energy industry.

American writer Paul Craig Roberts said that the US-led sanctions on Iran and also against Russia have generated a lot of frustration and resentment among Washington’s European allies.

“US sanctions against Iran and Russia have cost businesses in other countries a lot of money,” Roberts told this author.

“Propaganda about the Iranian nuke threat and Russian threat is what caused other countries to cooperate with the sanctions. If a deal worked out over much time by the US, Russia, China, UK, France and Germany is blocked, other countries are likely to cease cooperating with US sanctions.”

Roberts added that if Washington were to scuttle the nuclear accord with Iran, and then demand a return to the erstwhile sanctions regime, the other international players will repudiate the American diktat.

“At that point, I think much of the world would have had enough of the US use of the international payments system to dictate to others, and they would cease transacting in dollars.”

The US dollar would henceforth lose its status as the key global reserve currency for the conduct of international trade and financial transactions.

Former World Bank analyst Peter Koenig says that if the nuclear accord unravels, Iran will be free to trade its oil and gas – worth trillions of dollars – in bilateral currency deals with the EU, Japan, India, South Korea, China and Russia, in much the same way that China and Russia and other members of the BRICS nations have already begun to do so.

That outcome will further undermine the US dollar. It will gradually become redundant as a mechanism of international payment.

Koenig argues that this implicit threat to the dollar is the real, unspoken cause for anxiety in Washington. The long-running dispute with Iran, he contends, was never about alleged weapons of mass destruction. Rather, the real motive was for Washington to preserve the dollar’s unique global standing.

“The US-led standoff with Iran has nothing to do with nuclear weapons,” says Koenig. The issue is: will Iran eventually sell its huge reserves of hydrocarbons in other currencies than the dollar, as they intended to do in 2007 with an Iranian Oil Bourse? That is what instigated the American-contrived fake nuclear issue in the first place.”

This is not just about Iran. It is about other major world economies moving away from holding the US dollar as a means of doing business. If the US unilaterally scuppers the international nuclear accord, Washington will no longer be able to enforce its financial hegemony, which the sanctions regime on Iran has underpinned.

Many analysts have long wondered at how the US dollar has managed to defy economic laws, given that its preeminence as the world’s reserve currency is no longer merited by the fundamentals of the US economy. Massive indebtedness, chronic unemployment, loss of manufacturing base, trade and budget deficits are just some of the key markers, despite official claims of “recovery.”

As Paul Craig Roberts commented, the dollar’s value has only been maintained because up to now the rest of the world needs the greenback to do business with. That dependency has allowed the US Federal Reserve to keep printing banknotes in quantities that are in no way commensurate with the American economy’s decrepit condition.

“If the dollar lost the reserve currency status, US power would decline,” says Roberts. “Washington’s financial hegemony, such as the ability to impose sanctions, would vanish, and Washington would no longer be able to pay its bills by printing money. Moreover, the loss of reserve currency status would mean a drop in the demand for dollars and a drop in willingness to hold them. Therefore, the dollar’s exchange value would fall, and rising prices of imports would import inflation into the US economy.”

Doug Casey, a top American investment analyst, last week warned that the woeful state of the US economy means that the dollar is teetering on the brink of a long-overdue crash. “You’re going to see very high levels of inflation. It’s going to be quite catastrophic,” says Casey.

He added that the crash will also presage a collapse in the American banking system which is carrying trillions of dollars of toxic debt derivatives, at levels much greater than when the system crashed in 2007-08.

The picture he painted isn’t pretty: “Now, when interest rates inevitably go up from these artificially suppressed levels where they are now, the bond market is going to collapse, the stock market is going to collapse, and with it, the real estate market is going to collapse. Pension funds are going to be wiped out… This is a very bad situation. The US is digging itself in deeper and deeper,” said Casey, who added the telling question: “Then what’s going to happen?”

President Obama’s grim warning of “deal or war” seems to provide an answer. Faced with economic implosion on an epic scale, the US may be counting on war as its other option.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
buzzsaw99's picture

those maggots love war. what the hell kind of threat is that?

I am Jobe's picture

Did someone say War? Wow Yellow Ribbons will be the future 

TongueStun's picture
TongueStun (not verified) I am Jobe Aug 16, 2015 6:10 PM

I'm sick of Dick Sucka Obama's constant lying....it's going to be war or nuclear war.

quintago's picture

This article is about right. If the deal fails in the US, others will proceed and to circumvent the sanctions others will have no choice but to transact in other than USD. The Israelis know we won't let this happen that's why they want the deal to fail, because it will lead us to war to stop it. If you have any sense of love for this country, depsite what you think it has turned into, you will write to every member of congress and let them know to vote for it or risk losing your vote forever. Unfortunately they are a bunch of cowards and won't vote the way they should, so instead they need to know they can win a re-election without the zionist lobby's money in order to vote for it and the only way they can do that is by getting phone calls, emails, and letters pouring them in assuring them of the same.

Stumpy4516's picture

If Iran's selling of it's products was or is that dangerous to the dollar they would (or will) be destroyed regardless of any phoney deal.

And Russia will not fire a shot should Iran be attacked.  The "deal" is not about preventing war, it is about something else.  It is likely just a delay tactic or is a ploy to make it appear they tried for peace but were forced to attack due to someone else.

Did Putin ever deliver those S-300/400 missiles?  NO.  Putin is cooperating to keep Iran an easier target while talking empty words.

Tarshatha's picture

Ten years ago, perhaps, but not now. The US no longer has the will nor the means to wage another protracted war in the middle east except by use of their, and Israel's proxy army, ISIS. The USD is in palliative care chalked full of cancer with it's selfish finger locked squarely on the nuclear option, if it dies we all got to die.

At this time the world no longer fears the monsters running the US Fed and the US military industrial complex, they are simply turning their backs on it and the only option the US and more importantly, the welfare state of Israel has is to start WW3.

If the US and Israel fail to drag Russia and their close allies, China, India, Iran etc. into a provocated war, they will simply turn on their own people with a series of false flags, marshal law and made up provocations to kick off WW3.

Either way Iran is correct, the US is the great Satan, Americans just don't realize it's not them, it's the Zionist cabal that has hijacked their government, military industrial complex and the US Fed. Unfortunately, if the dancing with the stars and Monday Night football crowd doesn't wake the fuck up soon this world is going to get depopulated in a hurry.

 

I am Jobe's picture

Did someone say War? Wow Yellow Ribbons will be the future 

Divine Wind's picture

 

 

 

But...But...But Martin Armstrong says that we will see the Euro, Yen and other currencies collapse before the USD.

Hmmmm.

Serfs Up's picture

 

Oh....never mind...collective wounds and unconcious projection and all that...I see now....

Uber Vandal's picture

And all of the ramp ups at the closing bell, flash crashes and monkey hammers of commodities are simply the product of ones's imagination per Marty.

http://www.armstrongeconomics.com/archives/35913

As was said on this board in the past, do not trust anyone who uses the phrase conspiracy theory.

Jaspergers's picture

"do not trust anyone who uses the phrase conspiracy theory" +1

Perimetr's picture

"Faced with economic implosion on an epic scale, the US may be counting on war as its other option"

 

Wait . . .

 

Since when has war not been our option?

The US has been at war during the entire 21st century.

Luc X. Ifer's picture

USSA as you know it - a maleficent empire is on its way out from the house of the future, just a new member of the history of former empires.

 

doctor10's picture

It all blows out regardless of what we/Obama does here. The debt is simply too large. The MIC/Obama administration banked on a real financial recovery at this point in time.

With ObamaCare they shot themselves in the ass.

The only issue is whether or not it detonates on Obama's watch or the next Oval Office Occupant. "WAR" may put it off 18 months or so-but not much longer than that

"pigs get slaughtered"

Refuse-Resist's picture

Call their bluff. Fuck it. Let's rock!

I'm reasonably certain a big war would mean the collapse of the USGOV.

 

Is that not a desireable outcome at this point? You can't make an omlette without breaking a few eggs.

So again:

 

FUCK IT LETS ROCK!

Chuck Knoblauch's picture

It's all about trade.

China is already pumping Iranian oil.

Selling it for non-US dollars.

The Chinese won this game of chess.

Obozo is in over his head.

I don't like it, but we have a turd running policy.

Sanctions against Iran in the first place was stupid.

It opened the door for China.

STUUUUPID!

It made Israel feel good, but it fucked oil prices.

It fucked Texas.

Is Obozo still on vacation worshiping Allah?

God, what a group of assholes we have running policy in the ME!

Peelingtheonion's picture

 

“If we turn around and nix the deal and then tell [US allies], ‘You're going to have to obey our rules and sanctions anyway,’ that is a recipe, very quickly for the American dollar to cease to be the reserve currency of the world.”

 


That has been the root cause for most all of the turmoil in the M.E. and other U.S. foreign policy objectives...It's about the preservation of the status of the petro dollar....ask any nation or national leader who didn't get that memo...what happens

NidStyles's picture

Really? It seems to be more about enabling Israel to control the region from what I can see.

johngaltfla's picture

OH man, another tinfoil Glenn Beck style article on the Iran deal and Kerry's statements. Ugh.

Billy the Poet's picture

But the UK, France, Germany, Russia and China have agreed to end Iran sanctions. Why is it crazy to believe that if the US tries to continuing sanctioning Iran and its trading partners including those nations that there would be major economic consequences?

Tarshatha's picture

Because, if there was peace in the Arab world, Israel's continued future as the occupier of Palestine would be in jeopardy. Israel must have war in the ME in order for it to survive.

 

Remember "Henry Kissinger’s recent statement, that in 10 years Israel will cease to exist"

 

But until then Millions die because of apartheid Zionist scum.

 

Luc X. Ifer's picture

dude i hope you sleep with your tinfoil on. 

lawton2's picture

The dollar will probably strengthen a little more with the period of high deflationary forces that looks to be coming soon.

BarkingCat's picture

and the reason why they all the US dollar to hold reserves is that is the only market deep enough to facilitate it.
There is no other financial instruments with enough liquidity.

Seagate's picture

Bull. If the Iran deal can scuttle the USD as a reserve currency, then the actual crown was not there to begin with.  How 'bout the US export its own oil?  Iran is always going to be a shit hole with rabid leadership and the US has enough shale in the west alone for 200 years.  Further, I thought all the lefties were going to use wind a solar energy to eliminate the need for hydrocarbons. I wish they'd makeup their minds. 

Billy the Poet's picture

So you want the US to stop trading with virtually every nation on Earth because they are willing to do business with Iran. Yeah, that ought to work out OK.

Socratic Dog's picture

Iran is always going to be a shit hole with rabid leadership?  I seem to recall it was a stable democracy until the CIA overthrew it and installed the Shah.

BarkingCat's picture

Chuck Schumer is a hawk???
Chuck Schumer is a shmuck!!!

He's only a hawk when a democrat is driving to war or military action would benefit the nation that he really feels allegiance to - Israel.

trulz4lulz's picture

I had to go with.....Shmuck....that was a really hard decision.

JustObserving's picture

US debt is increasing exponentially.  It will end with the collapse of the dollar or a major war or both:

What difference does the fiscal gap approach make in our understanding of the true federal debt? CBO tells us that the national debt was a little less than $13 trillion in 2014. But the fiscal gap in that year as calculated by Kotlikoff was $210 trillion, more than 16 times larger than the debt estimated by CBO and already judged, by CBO and many others, to be unsustainable. If a $13 billion gap is unsustainable, what term should we apply to a $210 trillion gap? Kotlikoff also calculates that the fiscal gap is equal to about 58 percent of the combined value of all future revenue. Thus, we would need to reduce spending or increase taxes by enough to fill that 58 percent gap if we wanted to put the federal budget on a path to solvency that balances the interests of those now receiving benefits and those who hope to receive benefits in the future.

Kotlikoff goes on to illustrate that the fiscal gap is increasing at an alarming rate and that delay makes our problem much worse. In 2003, just a little more than a decade ago, the fiscal gap was $60 trillion. But by last year it had catapulted to $210 trillion. The fiscal gap may not continue increasing as rapidly as it has over the past decade, but with each passing year - as Congress and the President do their best to avoid action - our hole grows deeper by substantial amounts.

http://www.brookings.edu/research/opinions/2015/04/08-federal-debt-worse...

lolmao500's picture

The whole western world is fucked. Forget it, we're going down and they won't save it before it's too late, hell it's already too late.

Fuck hoping for the better, like a sheep in front of 10 wolves... I'm prepping.

SWRichmond's picture

Dont forget training and conditioning in your prepping.

falak pema's picture

Nothing new here, we have all been saying this since before 2008...In fact, since GWB's Crusade, which extended the US military lines to breaking point exacerbating the local resistance to fight.

The $ hegemony was made more fragile by this military ramp up and the concomitant greed of US oligarchs to outsource its production to Chindia. Double pincer that the neo-cons engineered in their blind hubris of "towering colossus" mantra--what could possible go wrong with the USSR belly up-- which came back to bite the US.

Making China the world factory is what made the Saud alliance fragile. Chindia has overtaken the US as clients of ME oil and the IRan conundrum spawned since 1953 coup would do the rest.

What people tend to forget in their hubris is : your past acts of unwarranted violence are the PROLOGUE for what follows; not the epilogue of past dreams unfulfilled triggered by upping the "to the victors the spoils" mantra in the hope of destroying all opposition.

Nemesis or karma awaits.

Johnny Fiat and The Contangos's picture

"The $ hegemony was made more fragile by this military ramp up and the concomitant greed of US oligarchs to outsource its production to Chindia."

Um, George Bush wasn't in office when China got its Most Favored Trade nation status in the mid 90's...

http://tech.mit.edu/V114/N27/china.27w.html

There, fixed it for yah.

falak pema's picture

There is continuity on this "outsourcing issue" between Bush Sr, Clinton and GWB, as it serves the Oligarchy interests. Your link proves that fact.

Most favoured trade nation in 1994 is followed by WTO benediction under GWB in 2001 and China then REALLY takes off!

Its one continuous time line to serve US Oligarchy.

Seagate's picture

Did anyone mentioned in the article including the author take note of the devaluation in the Yuan?  Can't picture people taking Yuan now when it is destined to decline 10% by Christmas.

Bitcoin Meiser's picture

The PBOC just announced tonight that the value of the Yuan may go up or down. I think that is a hint that it is about to go up. It's up from here for the Yuan.

lesterbegood's picture

LET IT BE KNOWN as of December 1, 2014, under the court decision of August 25, 2014 that convicted the United States Corporation and their officers of fraud, extortion, human trafficking, involuntary servitude, murder, high treason, and crimes against humanity, all corporate governmental, judicial and enforcement powers and authority are revoked and nullified and all such personnel are hereby ordered to immediately STAND DOWN.
Any further corporate governmental intervention into any matter regarding any activity in any of the several states related to the Respublica of Earth, United States of America is now considered a Breach of the Peace.
LET IT BE FURTHER KNOWN that anyone disregarding this ORDER is considered personally liable for acts leading criminality against the People and faces immediate arrest and detainment by the Court of Ages, Earth District Natural Law Peace Officers deputized by the Court which includes all militia and National Guard.

http://www.courtofages.com/usa-orders.html

http://www.courtofages.com/intl-orders.html

http://www.courtofages.com/documents.html

https://drive.google.com/file/d/0ByoBFsAn_OgvVjEzUFpjelF5elk/view?usp=sh...

atomicwasted's picture

Have you wandered away from the group home?

BarkingCat's picture

And I as the high judge in the court of teakettles, oil lamps and mini-snacks have issued a verdict as well:

Let it be know to all that Avar Kingdom must repay its debt to the Kingdom of Dacia consisting of :
3,000 goats (unmolested),
25,000 live chickens,
2,000 baskets of barley,
120 oxen,
10 ogers.

Failure to repay the debt will be punished by the desolution of the kingdom and sale of the king and all male relatives to Sparta.

Implied Violins's picture

Wishful thinking might garner you a few quarters and dimes...if you steal it from a wishing well. Good luck with that.

trulz4lulz's picture

It s sad that the world has gotten to such a poor state of affairs that people create fantasy about the Space Police comming to save the planet. I hope you are right, otherwise its extinction.

Son of Captain Nemo's picture

US President Barack Obama has given an extraordinary ultimatum to the Republican-controlled Congress, arguing that they must not block the nuclear accord with Iran. It’s either “deal or war,” he says.

Yes... Yes... Yes indeed!!!....

All President "Hope & Change" I don't even need to get to the Constitutional question... will have to do is snap his fingers when Congress doesn't approve the deal to take us to war with Iran which will undoubtedly involve Russia and China...

This looks like a job for the Three Musketeeres 9/11 plunge protection team!

Paging Dov Zakheim, "Buzzy" Krongard and Larry Silverstein!  You're wanted at the Oval Office immediately!!!!

And let me tell you those fireworks will have to be pretty fucking amazing inside CONUS to rally the troops after 14 years of perpetual war!!!

Refuse-Resist's picture

"Paging Dov Zakheim, "Buzzy" Krongard and Larry Silverstein"

"Paging the IGLORIOUS BASTERDS, INGLORIOUS BASTERDS LINE 1"

FIFY -- but which one is the bear jew?

atthelake's picture

Sooner or later, WE are going to pay the price for not lynching our "leaders", long ago.

honestann's picture

Correction:  sooner and later.

Amish Hacker's picture

We have always been at war with...um, where were we?

honestann's picture

The dollar will not be the reserve currency much longer no matter what happens with the Iran deal.  The dollar is king for a short time longer as the international financial switches over in fits and starts, but then the dollar is toast.

And it is too late.  The USSA already overplayed its international payment system powers so far that the world got fed up and created alternatives.  That game is already over, and the USSA screwed themselves.  Of course, being an evil bully in other ways just made the foreign decisions to create other systems super easy to make.

And so, this threat is a fraud.  Deal or no deal, the dollar is finished.  Perhaps not by the end of this year, but continuously over the next few years.

The government of the USSA is a bunch of very dangerous but delusional predators.  Good riddens.