Iran to replace dollar with euro in foreign deals

[TexasLawyer]

Ruh-roh!

Iran to replace dollar with euro in foreign deals
Dec 18, 2006

The Iranian government said it has ordered the central bank to transform the state's dollar-denominated assets held abroad into euros and use the European currency for foreign transactions.

"The government has ordered the central bank to replace the dollar with the euro to limit the problems of the executive organs in commercial transactions," government spokesman Gholam Hossein Elham told reporters Monday. "We will also employ this change for Iranian assets (in dollars) held abroad."

The move comes amid mounting pressure from the United States for the UN Security Council to agree sanctions against Iran over its controversial nuclear programme.

Elham added that Iran's budget would in future be calculated according to euros.

<snip>


http://www.breitbart.com/news/2006/12/18/061218095123.sn4s0vlu.html

[Spazito]

1. Gosh, Saddam/Iraq was planning to do the same.....

just before they became one of the "axis of evil" and were subsequently illegally invaded and, just coincidence I am sure, we have the neocons/bush cabal threatening military action in Iran.

[MisterP]

14. maybe this is what the proposed "surge" was for?

[Spazito]

18. With this cabal, NOTHING is beyond....

the realm of possibility, that's for sure!

[Redstone]

2. I'm NOT criticizing you for posting this, but who cares?

What effect will this have on me, the average American slob?

Redstone

[TexasLawyer]

7. petro-Dollar v. petro-Euro

Whether and to what extent oil is traded in dollars versus euros has huge ramifications for the strength of the dollar and our American standard of living.


IRAN, BOURSE AND THE U.S. DOLLAR

By Ed Haas
January 28, 2006
NewsWithViews.com

On November 10th 2005, the Muckraker Report published an article that described one of the unspoken reasons why the United States had to invade Iraq; to liberate the U.S. dollar in Iraq so that Iraqi oil could once again be purchased with the petrodollar. See The liberation of the U.S. Dollar in Iraq

In November 2000, Iraq stopped accepting U.S. dollars for their oil. Counted as a purely political move, Saddam Hussein switched the currency required to purchase Iraqi oil to the euro. Selling oil through the U.N. Oil for Food Program, Iraq converted all of its U.S. dollars in its U.N. account to the euro. Shortly thereafter, Iraq converted $10 billion in their U.N. reserve fund to the euro. By the end of 2000, Iraq had abandoned the U.S. dollar completely.

Two months after the United States invaded Iraq, the Oil for Food Program was ended, the country’s accounts were switch back to dollars, and oil began to be sold once again for U.S. dollars. No longer could the world buy oil from Iraq with the euro. Universal global dollar supremacy was restored. It is interesting to note that the latest recession that the United States endured began and ended within the same timeframe as when Iraq was trading oil for euros. Whether this is a coincidence or related, the American people may never know.

<snip>

http://www.newswithviews.com/public_comm/public_commentary31.htm

[peacetalksforall]

9. Could mean your job or someone in your family - for starters.

Tough on our wealthy people also except for those who already started converting their assests to Euros.

Could be a little pick up for those U.S. products desired overseas.

Basically, more of the middle will move down. Close to schedule.

[MercutioATC]

11. Depends. Would a 20% devaluation of the Dollar have an effect on you?

Example:

Saudi Arabia sells $250B in oil. They can't spend all of that money, so they hold it in accounts in foreign banks. Right now, they hold it in Dollars.

What would happen to the value of the dollar if everybody sold the dollars they had and bought Euros...especially oil-producing countries?


The median estimate I've seen is a 20% drop in the value of the Dollar. 20% is destabilizing territory.



It's inevitable, but holding petrocurrency in Euros instead of Dollars is going to make a BIG difference to all of us.

[Redstone]

13. Thanks for the explanation. Now I understand.

Redstone

[Bandit]

19. Hmm

Foreign Policy issues are usually way beyond the comprehension of the average American..:shrug:

[mikelgb]

3. franz ferdinand

[dipsydoodle]

6. What's a Scottish rock band

got to do with the price of eggs ? :)
http://en.wikipedia.org/wiki/Franz_Ferdinand_(band)

[liberal N proud]

4. Since this is why they are part of the axis of evil...

along w/ Iraq, N. Korea and Venzuela , when does the attack on Terhan start.
This the true HIDDEN reason bu$h attacked Iraq.

[dipsydoodle]

5. BBC has picked up on it too

Iran is to shift its foreign currency reserves from dollars to euros and use the euro for oil deals in response to US-led pressure on its economy.
>
Analysts said Tehran had been steadily shifting its foreign-held assets out of dollars since 2003 and that Monday's announcement was unlikely to affect the value of the dollar, which has weakened significantly in recent months.

http://news.bbc.co.uk/1/hi/business/6190865.stm

[rodeodance]

8. another slap in the US face. And we deserve it--yet, for the most part

it will be the 'little people' who suffer in the end.

[Vidar]

10. Good fo them.

[greenman3610]

12. Must viewing video explains this -Monte Python meets peak oil

http://video.google.com/videoplay?docid=7374585792978336967

[dipsydoodle]

15. Another brief link

http://www.mehrnews.ir/en/NewsDetail.aspx?NewsID=416994

[magellan]

16. Never fear

An attitude adjustment is on the way: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2657972

edited link

[Spazito]

17. Yep, just like Iraq who, "coincidentally" had signaled their intent

to change to Euros just before the illegal invasion and occupation.

[seemslikeadream]

20. Dollar dropped in Iran asset move

The move could have implications for the oil market

Dollar dropped in Iran asset move

The move could have implications for the oil market
Iran is to shift its foreign currency reserves from dollars to euros and use the euro for oil deals in response to US-led pressure on its economy.
In a widely expected move, Tehran said it would use the euro for all future commercial transactions overseas.

The US, which accuses Tehran of supporting terrorism and trying to obtain nuclear weapons, has sought to limit the flow of dollars into Iran.

It wants the United Nations Security Council to impose sanctions on Iran.

Dollar squeeze

Analysts said Tehran had been steadily shifting its foreign-held assets out of dollars since 2003 and that Monday's announcement was unlikely to affect the value of the dollar, which has weakened significantly in recent months.



" There will be no reliance on dollars

Gholam-Hussein Elham, Iranian spokesman

[ayeshahaqqiqa]

21. Well, Bush wanted to limit the flow of dollars to Iran

if they start using Euros, this will be the case.

[Delphinus]

22. What's it going to do to the stock market?

I don't follow it or understand it enough to know.

[xchrom]

25. in the short term not so much -- but the long term --

this means our dollar has less value and right now that's a problem because we are looking at a long term devaluing of the dollar.

i'm beginning to think mogambo guru is on to something re: attaching the dollar to gold again.

[nashville_brook]

34. inflation. lots of it.

[Broadslidin]

23. Future Iraqi Supreme Rulers Will Also Dump The Blood Soaked u.s. dollar.

International oil contracts written in
higher valued Euro Dollars cannot come soon enough...!

[nashville_brook]

24. the dollar is in free fall -- why should they get paid in dollars when euros buy more?

[DavidDvorkin]

26. There's been no major change in the exchange rate so far

At least, not to my untutored eye. (I go by http://www.xe.com.)

Perhaps the major traders are waiting to see if Iran's actions are isolated. Or perhaps China's gradual shift is so much more important that this is just another minor drop in the bucket.

[seemslikeadream]

28. isolated?

a nice word for it


http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=364&topic_id=2944423&mesg_id=2944423


http://news.bbc.co.uk/1/hi/business/6190865.stm

http://en.wikipedia.org/wiki/Iranian_Oil_Bourse

http://www.iranian.ws/iran_news/publish/article_19564.shtml

http://www.politicalcortex.com/story/2006/8/23/23238/6451

http://www.bloomberg.com/apps/news?pid=20601087&sid=aLJU5bDgo3T8&refer=home

[ama]

36. Euro/dollar since 1999

http://www.ecb.int/stats/exchange/eurofxref/html/eurofxref-graph-usd.en.html#firstdate
?

[DavidDvorkin]

37. I'm well aware of the trends

I've been following them for quite a while.

What I meant was that I hadn't noticed any significant movement recently specifically in response to Iran's changeover.

[nashville_brook]

27. question: what happens when the dollar is no longer backed by oil?

http://www.masternewmedia.org/news/2006/01/23/the_iranian_oil_exchange_proposal.htm

"In 1971, as it became clearer and clearer that the U.S Government would not be able to buy back its dollars in gold, it made in 1972-73 an iron-clad arrangement with Saudi Arabia to support the power of the House of Saud in exchange for accepting only U.S. dollars for its oil. The rest of OPEC was to follow suit and also accept only dollars. Because the world had to buy oil from the Arab oil countries, it had the reason to hold dollars as payment for oil.

Because the world needed ever increasing quantities of oil at ever increasing oil prices, the world's demand for dollars could only increase. Even though dollars could no longer be exchanged for gold, they were now exchangeable for oil."

[nashville_brook]

29. question: didn't Saddam switch to euros before the invasion?

[seemslikeadream]

30. Saddam Turns His Back on Greenbacks

:hi:
http://www.time.com/time/magazine/article/0,9171,998512,00.html

[Turbineguy]

33. It was around

election time 2000. The switch was scheduled to take place 3 days after the US election.

I suspect that if Gore had become President Iraq would have gone back to Dollars. The switch turned out to be smart. When Bush was declared the winner, the dollar started dropping against the Euro (it was $0.86 then and went to $1.27 in short order) and Saddam Hussein (who took a 15% commission on oil sales) was able to squirrel away lots of money.

Saddam knew that if Bush became US president, his days were numbered. After all, candidate Bush had said he would take Saddam out. Bush was kind enough to allow him to build up a nice stash for over 2 years.

[nashville_brook]

31. who wouldn't want to dump the depreciating dollar in favor of the strong euro

china? japan? russia?

[nashville_brook]

32. coincidentally -- US to warn Iran with naval buildup in Gulf- CBS

http://www.alertnet.org/thenews/newsdesk/N18217613.htm

[madrchsod]

35. mean while-----

http://news.bbc.co.uk/2/hi/middle_east/6190673.stm
BBC NEWS | Middle East | Poll blow for Iran's Ahmadinejad

the people are fed up with his crap too. which leads me to question the motive of showing force when the iranian people reject the conservatives..oh wait its the "bush doctrine", fuck up anything that looks like a compromise.