Why Iran was Cut Off the Banking System

The reason why Iran was cut off the global Banking System (SWIFT-system) is little known.

During the crisis, it became apparent how important the banking-system is to the political class. Although normally many months or years are needed to agree on anything, the larges financial transaction in the history of mankind (the bailouts of the big banks) were pushed through in record time. Therefore it may not come as a surprise that when Iran announced in early February that they want to trade oil in currencies other than the US dollar beginning on March 20, the EU showed that they can act quickly if the USA wants them to. Iran was cut off the international banking system on March 17, just in time. The British "Telegraph" writes that not trading oil in dollars is part of an Iranian "vision of economic war with the west."

But is trading oil with non-dollars really such a terrible thing to do? To be sure, a monopoly on bulk oil markets is making it easier for the US federal reserve to print up dollars and disperse the negative effects of inflation over the whole world, which makes it easier to hide it, but who profits from that monopoly? The Federal reserve profits the most from that monopoly because when it prints a dollar, it becomes their full property, in other words if Ben Bernanke orders to print a billion dollars, he lawfully earned a billion dollars for the banking cartel that is forming the Federal reserve. Just because this operation is legal does not guarantee that it is also moral.

But of course at this time and age, morality is a secondary concern, so let us concentrate on the objective question of who benefits when the Federal reserve prints dollars. The member banks of the Federal reserve, who own this billion, of course benefit the most. Of course the member banks can pay big salaries, bonuses and dividends to their employees and shareholders. If done directly, in other words if the Federal Reserve were to just print the money and give it to employees and shareholders, then the general public might ask some inconvenient questions, therefore the operation has to be camouflaged behind numerous busy transactions of lending, repaying, "market operations" and economic jargon and mumbo jumbo, but the basic truth remains: When the Federal reserve prints a dollar, it becomes the property of the member banks of the Federal Reserve and nobody else.

So on top of the pyramid stands the Federal Reserve member banks, which basically use other banks to wash the money by using other banks. So banks for mere mortals are also big beneficiaries in the whole system - and of course government is also getting easy loans from the banks. While the Federal Reserve banks are private banks, they are still dependent on the government, because government (and not the free market) gives the Federal Reserve the monopoly of money by declaring paper "legal tender" if that paper was printed by the Federal Reserve. Then the wealth continues to trickle down to government employees, government contractors, subsidy and welfare recipients, etc.

Of course this would only benefit the economy as a whole when creating money were equivalent to creating wealth. In reality of course the users of the money pay for the wealth of the Fed and the banking system via inflation. Those who are near the Fed profit, those who are far from it, pays the inflationary price. It is clear that all people outside the USA are losers of this game and also very questionable whether ordinary people in the USA are profiting from the printing of money. On one hand the USA as a whole profits from the use of dollars abroad, but on the other hand American citizens also carry the main burden of inflation because they are also the main users of dollars. Anyway, what is sure is that a refusal of the dollar may only be interpreted as an economic war against the USA and not against "the West". On the contrary, all Western states except the USA would profit if the dollar-monopoly in the oil trade would be broken.

However, that does not prevent the European allies to defend the dollar-hegemony by cutting off Iran from the banking system. Basically, the EU is only enforcing an unwritten world-wide law that only US-dollars are "legal tender" for oil. It is no accident that the EU cut off Iran just a few days before it started selling oil for non-dollar currencies and it is no secret that the USA urged the EU to do it.