In the face of escalating sanctions imposed by the European Union and the U.S. government, supposedly related to the Iranian nuclear program, officials in Iran announced that the nation would accept gold and currencies other than the dollar in international trade. China, Russia, India, and other major economies have continued to do business with the Islamic Republic despite the growing Western pressure.
"In its trade transactions with other countries, Iran does not limit itself to the U.S. dollar, and the country can pay using its own currency," Iranian central bank governor Mahmoud Bahmani was quoted as saying in state-controlled media. "If a country should so choose, it can pay in gold and we would accept that without any reservation."
Analysts said the move, officially announced Tuesday, represents another serious attack on the status of the already-embattled American dollar. While it currently serves as the global reserve currency due mostly to its use in paying for oil on international markets the Federal Reserve-issued debt-based currency is facing increasing challenges on several fronts.
Unlike most of the world’s nations, which have privately owned monetary authorities, such as the Fed, that are controlled by banking cartels, Iran has a state-owned central bank. More than a few analysts have suggested the Islamic Republic’s relatively unique monetary system is actually one of the reasons Western belligerence toward the nation is growing louder.
Prior to the NATO-backed overthrow of strongman Moammar Gadhafi, Libya also had a state-owned central bank. The nation had massive reserves and no foreign debt before "regime change" arrived. But in the early days of the Western-backed rebellion, "rebels" promptly established a new central bank to replace Libya’s existing monetary authority sparking serious suspicions among analysts.
Gadhafi, whose government was sitting on huge stockpiles of gold bullion, had been seeking partners to create a gold-backed currency for the oil market that would have marginalized the U.S. dollar. Before the plan could come to fruition, however, Libya was aggressively bombed by international forces. NATO’s rebels on the ground known terror leaders, former Gadhafi officials, Western special forces, and assorted Islamic extremists finished the job and executed the long-serving dictator.
Iraqi tyrant Saddam Hussein had also threatened to start selling oil in currencies other than the U.S. dollar. But that scheme was put on ice as well when U.S.-led military forces invaded and occupied the nation in 2003 first under the guise of "weapons of mass destruction" and supposed links to terror, and later for the supposed purpose of "spreading democracy."
Western leaders have similarly accused the Iranian dictatorship of secretly developing nuclear weapons. Iranian officials claim its atomic program is for peaceful purposes, and while some analysts disagree, even the U.S. intelligence community has failed to find any evidence of clandestine weapons development in Iran.
Despite the lack of evidence, however, Western governments have become increasingly belligerent, imposing a wide range of sanctions on Iran, its central bank, and even foreign institutions that do business with it. The value of Iran’s fiat currency has plunged in recent months, even against other declining currencies. But with much of the world refusing to go along with sanctions, it is unclear how effective the efforts to punish the nation have been.
"Much has been spun in recent weeks to indicate that as a result of collapsing trade, Iran's economy is in shambles and that the financial embargo hoisted upon the country by the insolvent, pardon, developed world is working," noted the financial analysis site ZeroHedge. "We had a totally different perspective on things."
According to ZeroHedge’s take on the situation, the Iranian regime is actually plotting to put the final nail in the dollar’s coffin. "We essentially said that Iran, with the complicity of major trading partners like China, India and Russia is preparing to phase out the petrodollar: a move which would be impossible if key bilateral trade partners would not agree to it," it noted.