Commentary by Jack Kelley
It’s been said that nations derive their income from taxing their citizens whereas empires derive their income from taxing nations. Where the US is concerned, this taxation has come in the form of an inflated dollar, caused by the monopoly it has enjoyed where the purchase of oil is concerned.
In 1972 President Nixon made an agreement with Saudi Arabia that in return for a pledge of security and protection the Saudis would influence OPEC to accept only dollars for the purchase of oil. This has required nations to maintain larger supplies of dollars then they normally would have, increasing the world wide demand for dollars. A year earlier, Nixon had taken the dollar off the gold standard. Now he was saying that while they could no longer expect gold for their dollars they could buy oil with them. This allowed the dollar’s value to fluctuate according to demand, instead of being fixed at the rate of $35 per ounce of gold. As the law of supply and demand took effect, the dollar’s value relative to other currencies increased. The US then used these inflated dollars purchase goods from other nations. The effect of all this was that the US has been able to purchase as much as $1.25 worth of goods for every dollar it spends. In this way, the US has collected its tax from the nations of the world.
As we all know from our our personal finances, what begins as a bonus can soon become a requirement if we’re not careful. So has it been with the US economy, until now we can only make ends meet if we continue to collect this “tax” by keeping the dollar monopoly on oil purchases.
About 17 months ago I first wrote that Iran was going to break this monopoly by offering to accept payment for its oil in other currencies. Its customers would no longer be required use dollars to purchase Iranian oil. I said that if Iran could pull this off, the nations of the world would no longer have to maintain a large supply of dollars, but would begin selling them off in exchange for other currencies. As this happened the law of supply and demand would begin working against the dollar causing a decline in its value.
The thing that makes all this so confusing is that currencies no longer have absolute values like they did in the good old days. Back then all the currencies of the world derived their value in comparison to the dollar which derived its value in comparison to an ounce of gold which was fixed at $35.00. When the dollar went off the gold standard we were left with only relative value based on supply and demand.
When Iran began accepting other currencies the dollar’s monopoly was broken and its value began declining. The Euro benefited most from this and as an example of Iran’s success, in October of 2003 you could buy 1 Euro for $1.19. By the end of 2006 it took $1.31 and on Oct. 11, 2007 one Euro cost $1.43.
Iran hasn’t done this alone, but certainly started the attack against the dollar. Russia, China, and Venezuela have all helped out. And recently Japan’s three largest refineries announced that they’ve begun paying for Iranian oil in Yen. Some are calling this the currency cold war, saying that what America’s enemies couldn’t do militarily, they’ve begun to accomplish in the financial markets. China alone holds 1.3 trillion in US dollar assets. Dumping these assets is being called China’s nuclear option because of the devastating effect it would have on the US Economy. Recently China and Japan led one of the biggest sell-offs of US dollar assets in history.
Financial experts warn that the dollar is still over valued and will likely face further adjustments, and the head of the International Monetary Fund warned of an abrupt fall in the dollar’s value due to a growing lack of confidence in the US currency. Honestly we can’t blame Iran alone for our situation. Our staggering debt load, the spiraling rate of home mortgage foreclosures, the War on Terrorism and our general credit crisis have all contributed. And the rate of our moral decay has certainly disqualified us from receiving any help from God.
America has recovered from financial difficulties before, and may well do so again. And certainly there’s no immediate fear that we’ll go to bed one night with money in the bank and wake up the next morning to find that it’s all worthless. But never before has America had an enemy like Iran, whose president is admittedly orchestrating world-wide chaos in an all out attempt to hasten the return of al Mahdi, his Messiah. Never before has any national leader said that he’d gladly sacrifice his country and his people in such a pursuit. And the only obstacle standing in his way is the USA.
There’s no prophecy in the Bible that points to an end times conflict of such proportions as that which is looming between Iran and the US. But there is one that pits Iran against Israel, and many think that it’s just over the horizon. Even the secular press in Israel has begun to sense it, saying the next war will be the Gog-Magog war of the Bible. The only thing preventing an attack on Israel is the fear of US retaliation. Something has to be done to get us out of the way, and soon.
The US government has just imposed even more stringent economic sanctions against Iran, a move that Iranian officials say is tantamount to a declaration of war, and obligates them to respond. Will they cripple us militarily through a series of attacks against our forces in the Middle East? Or will they break our national will with devastating terrorist attacks here at home? Or beat us financially, by destroying our currency? We’re clearly vulnerable on all these fronts.
Or will the King of the Universe decide that America’s “15 minutes of fame” is up and suddenly strip our country of its Christian component leaving countless military and civilian leadership and support positions vacant, rendering the country confused and leaderless?
One of these options will likely take place soon, since America plays no obvious role in End Times prophecy. Even those who see us there, see us as Mystery Babylon, destroyed in a single day, in one hour. We are not specifically listed among either the participants or the observers in Ezekiel’s battle. Our presence cannot be detected among the forces of the Kings of the North or the South, nor do we appear with the Kings of the East. And there is no King of the West. It’s truly remarkable that a nation having enjoyed the power, the prosperity, and the influence of the US is primarily distinguished at the End of the Age by its absence.
And so the future will not be like the past, and life doesn’t just go on. We who are believers must finally and unreservedly shift our allegiance to our coming King, and make ready our place in His Kingdom, the one that will never be destroyed nor will it be given to another people. It will crush all those other kingdoms and bring them to an end. But it will itself endure forever. (Daniel 2:44)