Economics for dummies - Part II (Petro Bucks)

In my post some time back I had talked about how the people of Squanderville sold bonds to Thriftsville to support their squanders. However that is not the only option Squandervillians have. Below is an oversimplified version of the other option that a country can take. It is, what I call a dummies version of this story. Read along to know what we are headed for.

Any sane civilization with some self-respect and dignity eventually goes to war, killing its own people and leaving the survivors in suffering. It was in those times that the United States of Warriors realized that they can make some money. Warriors supplied arms and ammunitions to its allies for gold, by the time the war was over, Warriors had amassed enough gold that their currency was seen as more stable than Gold. Oil, which everybody needs began to be traded in WarBucks (Currency of Warriors) just because the currency was percieved stable. The demand for WarBucks, therefore started rising, Warriors made use of the oppurtunity and started printing WarBucks and bought stuff with them. In effect they bought stuff for free! (If you are wondering why cant everyone do this, well, read Part I. In short, if I start printing currency and start buying stuff with it, the people who have got my currency will come back to me and want to buy some other stuff with it, if I print too much of my currency there will be too much money chasing the limited amount of stuff I have and will result in things getting more expensive - Inflation. WarBucks however, were used by others to buy not stuff at home but oil elsewhere thus no inflation)

Soon everyone has loads of WarBucks that they use to buy Oil. Now the United Emirates of Oilers decide to stop trading in WarBucks and use NewBucks, suddenly the world realises that they cannot do anything with WarBucks and they want to sell the WarBucks. WarBucks fall steeply against NewBucks, Warriors do not have enough stuff to sell if the countries decide to sell WarBucks for WarStuff. Essentially Warriors can go bankrupt. What are the options they have:
1. Start producing stuff, and do that more economically than others to make it economically viable for others to buy. Which also means that the cost of labour has to go down drastically (They obviously had been squandering all along with free stuff they had been buying with WarBucks)
2. Do what they are best at doing: Go to war, thereby forcing all its allies to use WarBucks again.

Option 2 obviously sounds much more sensible, doesnt it?