Will The Iran War Trigger A Dollar Crisis?
The oil spike has moderated and markets are mellow for the time being, but could the long-term economic consequences of this war just be getting started?
U.S. allies have shown a lackluster response after President Trump’s request for assistance in reopening the Strait of Hormuz — a corridor carrying roughly 20% of global oil supply — and this may spell a trend of what’s to come. What happens when oil-producing Gulf states have had enough of our/Israel’s foreign policy machinations and, as a result, begin to de-dollarize or offload U.S. sovereign debt?
Tonight at 7pm ET, wealth manager Peter Schiff, proponent of the Austrian school of economics, and Rabobank global strategist Michael Every will square off on these questions and debate whether the Iran war will undermine the foundations of dollar dominance.
Moderating the discussion is the great Dave Collum, chemistry professor at ZeroHedge and long-time friend of ZH.
Schiff: Dollar’s Days Numbered
Schiff has long argued that U.S. fiscal deficits, monetary expansion, and reliance on foreign capital have put the dollar on an unsustainable trajectory. In recent commentary on the Iran conflict, he warned the war could accelerate those vulnerabilities.
According to Schiff, the combination of higher oil prices, massive war spending, and renewed inflation pressures could trigger a severe economic downturn and destroy purchasing power for Americans. The conflict could be the catalyst that finally exposes structural weaknesses he has warned about for years: a heavily indebted U.S. economy dependent on monetary stimulus and foreign financing.
When other countries start offloading their dollars, it may be rapid and jarring. As Schiff is fond of saying, stocks take the escalator up and the elevator down.
Every: Manufactured Hegemony
Rabobank’s Michael Every takes a different approach.
Less worrisome, he sees Hormuz being opened in two to three weeks:
Rather than collapsing the dollar, crises can actually reinforce its dominance, as global investors rush into U.S. assets during periods of uncertainty. Indeed, in the opening days of the Iran conflict the dollar initially strengthened even as global markets tumbled.
Every also sees the war as a geopolitical chess move that can strengthen the U.S. dollar. If the post-war Iranian regime is more subservient to the Americans, they would control another crux of the world’s energy trade.
Tune in tonight at 7pm ET to witness the showdown. Right here on the ZeroHedge homepage and streaming on X.
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GUNS N GEAR
I missed that part in the Constitution where it says I have to love Israel?
The biblical texts which are used to justify the sacred israel theme are subject to great debate and interpretation. The greatest flaw in this heresy is called dispensationalism, which only began about the turn of the 19th century with the Rockefeller paid reinterpretation of the Bible by a drunken fraud named Schofeiled for whom said “bible” is named. Likewise the term “Judeo-Christian” became current and ubiquitous in political language. A discussion of the theory itself is well beyond the scope of a comments thread, it is all readily available. If the assertions of the dispensationists are true, why did it take until the 20th century to appear?
In brief, God’s Covenant with Abraham with regard to blessing Israel was for the Old Testament Hebrew nation. When Jesus appeared and established a new Covenant, those who accepted the Gospel became the church and entered into the new Covenant of Salvation by Faith in Jesus and His Resurrection. Israel, by and large, rejected the new Covenant, were condemned by Jesus as the synagogue if satan. The temple was destroyed by the Romans and the Jews were scattered. Christianity replaced “Israel” as the true Faith. As if that were not enough, the establishment of the current nation of “Israel”is much more of a figment of geopolitical maneuvering in the interest of western governments (esp. Britain) with abundant duplicity and enough skulduggery to go well round. All of that is available to those who will look.
I have no interest in another online debate on so complex a subject and will not be engaged here. Please write what ever you wish, but refrain from attacking the messenger. I will not be tempted to reciprocate.