Earlier this week, Iran escalated the economic war with the US and Europe by passing a proposal to begin selling oil in currencies other than the dollar (petro-dollar). This move is a strong attempt to undermine the US dollar hegemony as the global reserve currency, while threatening Europe with potential fuel shortages during the harsh winter months.
On February 15th, the US and international banking system responded to Iran with their own salvo, and are dropping the Middle Eastern nation from the global Swift System. Swift is the international banking program which facilitates money and wire transfers around the world.
Iran is to be dropped out of the Swift system in Belgium. That means Iran could neither send or receive bank money wires.That would slam Iran’s economy.This is economic war at the highest level of conflict. This could start a greater move of central banks with fears of the West to increase and retrieve their gold positions. It certainly puts cash reserves held by central banks (which are computer entries anyway) into serious question as to security.This is as serious as it gets in nuclear and economic terms. The only weapon that can be effective against Iran’s nuclear industry is Western nuclear deep penetration bunker busters.Hold tight to your insurance investment positions. – Jim Sinclair, JS Mineset
Economic sanctions, as well as diplomatic rhetoric, are the primary tools used in conflicts today prior to the need for military action or intervention. Before a US coalition invaded Iraq in 2003, over 16 resolutions from the UN were issued against the Saddam Hussein regime, before military action was finally approved under President Bush.
The nexus for sanctions against Iran is their ever growing nuclear program, and the fears being inspired by the United States and Israel. Both sides are gearing up for potential conflict, as several carriers and submarines have already been positioned in the Straits of Hormuz, and Iran is responding with threats of suicide speed boat attacks on the larger vessels.
Economic sanctions implemented in the past by the US, UN, or European contingencies have worked moderately at best. During the time when sanctions were imposed on Iraq, governments such as France chose to undermine international agreements, and purchase oil from the rogue nation, which led to Saddam using the funds to purchase weapons instead of food.
Today, economic sanctions on countries such as North Korea and Syria have been opposed by members of the Security Council, who have intrinsic agreements of their own with each nation. China is a big supporter of communist Korea on the penninsula, and Russia owns military bases in Syria which would be danger should an international coalition choose to intervene in their current civil strife.
For the global economy, there are many pitfalls to increasing sanctions on the state of Iran, and the ones who will be most affected are the citizens in the West. Spiking oil prices, such as what has taken place in Europe with Brent Crude this week, could lead to shortages and the inability for people to afford energy at a time when harsh winter conditions have already taken many lives.
The US and international banking systems implemented a major salvo against Iran this week when they cut off the Middle Eastern nation from the Swift banking system, and the world may find out as early as this weekend what Iran will do in response to the growing economic war of resources, oil, and money.