Economics trumps empire
The Iranian state is in search of a credible currency. It ain’t the US dollar, which the Iranians proudly cite as having shrank to a position of denominating only 15% of their oil trades in comparison to other currencies. They’re looking to ditch that remaining 15%.
The Iranians aren’t alone. Economically booming Gulf Arab states don’t want to import the inflation the US state is creating by running the Federal Reserve virtual printing presses overtime to print more money. The Kuwaiti government threw the US dollar under the bus in May and the Saudi Arabian government is looking likely to follow their lead.
Hat tip: LondonYank
The US economy is not going to be able to handle this without severe discomfort. If you think the economy sucks right now, just wait a few months and let these trends play out. The wages of empire are financial ruin.
There are those of you out there who are naive enough to think that Ron Paul can make everything alright. It doesn’t work that way. The US government has, for decades, followed a policy course that arguably amounts to the intentional, systematic destruction of wealth — even as the remaining wealth was artificially and unjustly concentrated in the hands of the political class. The parasitic elite of government and subsidized business have been, metaphorically, eating our seed corn. The only way out of a hole dug this deep is to produce our way out of it.
The best Ron Paul can possibly do — best case scenario — is get the federal government somewhat out of the way. The task of actual economic rebuilding will still fall upon workers and entrepreneurs. In the looming shadow of a severe economic crisis, can those workers and entrepreneurs afford to wait around for Ron Paul to supposedly hand them a small portion of their freedom on a silver platter by perhaps some time in 2009? One and a half years from now at best? If a little voice in the back of your head says “no”, then the way forward is clear. Act like we live in a free market economy today (even though we don’t), defying unjust laws that hamper peaceful production and voluntary exchange.
UPDATE: For a solid Austrian economics analysis of why the US economy is going to continue getting worse — a lot worse — refer to Robert P. Murphy’s piece from yesterday: The Worst Recession in 25 years?
Murphy, BTW, is the author of Chaos Theory: Two Essays on Market Anarchy[free PDF], a short and easy to read book on the case for market (as opposed to governmental) provision of law, security and defense.
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