Iran moves back to the Dollar

Iran announced way back around 2006 that it would sell more oil for Euro’s and transition away from U.S. Dollars. This was of course ammo for the “collapse of the dollar” crowd. After all, the U.S. imports enormous quantities of crude and so the dollar must be losing its reserve status if we can’t even buy oil with dollars right?

Well, Iran has just announced a giant about face. You see, they are curtailing oil sales in Euros and going back to the Dollar. Turns out the Euro isn’t so great afterall. Oh, how sentiment changes fast! As I’ve argued before, the Dollar may be an unattractive currency, except for all the rest!

Who’s afraid for the dollar? Part I

We hear many prognosticators talk negatively about the dollar (I call them “dollar bears”). Some predict the dollar will get so weak it will crush the economy, cease to be the world’s reserve currency, and drive interest rates to double-digits. Some even talk about Zimbabwe or Weimar Republic style hyperinflation due to the all the money the Federal Reserve is “printing”.  These fears are overblown and unrealistic in my opinion and I’d like to take a moment to explain why this is not something we should fear. Since this is an extensive topic, I will break it into several parts.