Iran & Russia bourse, CHAVEZ HINTS HE'S NEXT! ANYONE SEE THIS?!

[robertpaulsen]

I'm sure everyone here heard the "rumors" that Iran was thinking of starting a bourse to trade oil in euros instead of dollars. It was supposed to open in March, but when it was delayed, most people forgot about it as though it would never happen.

Well, it's back:

IRAN: EURO TO REPLACE DOLLAR AS OIL CURRENCY

Tehran, 5 May (AKI) - In July Iran will ditch the dollar in favour of the euro as the currency in which it will accept payments for its oil and natural gas exports, Iranian president Mahmoud Ahmadinejad announced Friday. The switch, first mooted months ago, was expected but Ahmadinejad's decision comes just as Washington is stepping up pressure on other United Nations Security Council members to act against Tehran for flouting agreements taken with the UN's nuclear watchdog.

Ahmadinejad's announcement, made in Baku, Azerbaijan where the Iranian leader is attending a regional economics conference, appears aimed at weakening the United States' resolve to seek sanctions against Iran if it does not comply with the UN International Agency for Atomic Energy's demands.

Some observers beleive the Iranian move could deal a severe blow the the American currency as many central banks from oil importing nations could choose to stock up their currency reserves with euros rather than dollars.

http://www.adnki.com/index_2Level_English.php?cat=Politics&loid=8.0.294707730&par=0


Back with a vengeance, I might add. For not only is Iran opening their own bourse, so is Russia:

Putin proposes creation of ruble-denominated oil, gas exchange
12:38 | 10/ 05/ 2006

MOSCOW, May 10 (RIA Novosti) - President Vladimir Putin said Wednesday that a ruble-denominated oil and natural gas stock exchange should be set up in Russia.

Speaking before both chambers of parliament, cabinet members, and reporters, Putin said: "The ruble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for with rubles."

"Our goods are traded on global markets. Why are not they traded in Russia?" Putin said.

http://en.rian.ru/russia/20060510/47915635.html


Ruble-denominated oil exchanges could launch in 2007 - expert
18:25 | 11/ 05/ 2006

MOSCOW, May 11 (RIA Novosti) - Oil and petrochemical exchanges denominated in rubles could be launched in Russia as early as next year, the head of the presidential administration's expert department said Thursday.

In his annual state of the nation address to parliament Wednesday, President Vladimir Putin said that a ruble-denominated oil and natural gas stock exchange should be set up in the country.

"Next year, all could start operating," Arkady Dvorkovich said Thursday.

"The ruble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for with rubles," Putin said Wednesday.

http://en.rian.ru/russia/20060511/48003539.html


Tuesday, May 16, 2006. Page 5.

Oil Bourse to Debut in '06, Official Says
By William Mauldin
Staff Writer

A senior economic official said Monday that Russia would have a domestic petroleum exchange -- an idea backed by President Vladimir Putin last week -- up and running by year's end, but experts doubted whether oil would trade internationally in rubles anytime soon.

Deputy Economic Development and Trade Minister Kirill Androsov, who is also a Rosneft board director, said a domestic exchange for oil products would begin trading by the end of 2006 and an international exchange that would sell crude oil sometime in 2007, RIA-Novosti reported.

http://www.moscowtimes.ru/stories/2006/05/16/041.html


Guess how Chavez reacted to this? It's pretty alarming:


Venezuela 'may swap oil currency'

Venezuela has hinted it could price its oil exports in euros rather than US dollars, further weakening its links to the US.

President Hugo Chavez said he was considering taking the step following a similar declaration by Iran.

Earlier this month, Iranian authorities gave backing for the launch of an oil exchange that traded solely in euros.

Some reports have suggested Iran's move may be part of a bid to undermine the importance of the dollar.

snip

"So what the president of Iran says ... is recognising the power of Europe - they have succeeded in integrating and have a single currency competing with the dollar, and Venezuela might also consider that - we are free to do that," he added.

http://news.bbc.co.uk/1/hi/business/4990302.stm

I think there's been a Bolivarian ripple effect this week on the rest of South America:

Ecuador takes full control of Occidental's operations


Thursday, May 18, 2006 3:34:50 PM ET

QUITO, Ecuador (Reuters) - Ecuador's government on Thursday took control of Occidental Petroleum's operations three days after canceling the U.S. company's contract, sparking fears of spreading energy resource nationalization in Latin America.

Occidental, Ecuador's biggest investor before the contract was revoked, said it was seeking damages of more than $1 billion as part of an arbitration claim against the government for seizing its assets.

"Now, we are in control of all of Occidental's technical operations," said an official at state oil company Petroecuador, who asked not to be named.

snip

The move comes only weeks after leftist President Evo Morales of Bolivia sent troops into his country's natural gas fields and announced their nationalization. There has also been growing state control of Venezuela's oil sector under President Hugo Chavez.

http://www.metronews.ca/reuters_business.asp?id=149117


So, what does this all add up to? I think this blogger, in addition to the great links he provides, has a pretty astute analysis:

Combined, Russia and Iran account for fifteen percent of global oil production.

This may be just the opportunity that oil importing countries, particularly Europe, need to diversify their foreign currency holdings away from the US dollar, which currently dominates the global oil trade.

snip

Analysts from all over the political spectrum are speculating that this round of increasingly aggressive posturing could escalate into a major conflict, even another world war. The potential for global devastation is so appalling that whatever its likelihood, the parties involved should be doing everything they can to let careful diplomacy map a way out.

Unfortunately, the United States refuses to engage Iran diplomatically, choosing instead to conduct illegal reconnaisance missions into Iranian territory, force a confrontation in the fractious UN Security Council, and plan a military onslaught of missile strikes, possibly including tactical nuclear weapons, on Iranian targets.

http://www.raisethehammer.org/blog.asp?id=230



Isn't anyone else at DU worried about the ramifications of this? I searched archives and only found one thread here commenting on this:

Attack on the U.S. $$$$ - behold the *RUSSIAN* OIL BOURSE!
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=364&topic_id=1236209


Folks, this is serious shit that everyone needs to be aware of!

Edited to change title to something more awakening.

[dipsydoodle]

1. Here's another link

from a 4/30, a few days before your first one 5/5 ,which reiterates and elaborates :
http://www.aljazeera.com/me.asp?service_ID=11145 From memory I actually got that on DU. There are so many links on the subject of the Iran bourse that I now only keep the latest.
I don't think it malice - just economic common sense allowing for their trade with the EU.

[robertpaulsen]

4. Common sense - I agree.

With the astronomical twin deficits that * has accrued, with the dollar holding as much worth as a green piece of paper, it makes perfect sense. The added benefit is that it makes the possibility of UN sanctions less likely.

[BelgianMadCow]

2. !!! Hellooo!

first one to me about Russia- things are spinning dangerously...

[robertpaulsen]

13. That's OK, MSM is totally dropping the ball on the Russian bourse.

They've mentioned Cheney's inflammatory remarks about Russia and their response, but nothing about what's really precipitating this tension.

[Truthy Nessy]

3. this one os so interesting and a little depressing

http://news.goldseek.com/InternationalForecaster/1148223780.php


Excerpt: "Two weeks ago the Iranian government said it would soon open its oil bourse. At the same time the G-7 said they were giving the job to the IMF of bringing about a soft landing for the dollar. Since then the dollar has plummeted from 90 on the dollar index to 84, and the euro has climbed from $1.21 to $1.29. The reality of the matter is the neocons couldn’t find an excuse quick enough to invade Iran. Iran will trade oil in euros and after a few months that will put pressure on the dollar. It means that countries that have lots of dollars can sell dollars and buy more euros or gold. It will also end the era of the US dollar as the world’s reserve currency. The dollar will correct 60%. The dollar index should fall to about 50 and the euro should rise to about $1.60 to $1.90. This event will transpire over the next two to three years and cause a crisis bigger than the depression of the 1930s."

[robertpaulsen]

15. That is interesting. The gold hawks are on top of this story.

Here's another one:


Russian Rouble to attack the $ - Exchange Controls in the U.S.?

Russian President Vladimir Putin called for work on making the national currency convertible to be completed, oil and gas to be traded in Roubles on a domestic exchange, and an innovation-based economy.

In his annual state of the nation address before both houses of parliament, ministers and reporters, Putin said work on making the national currency fully convertible should be completed by July 1, almost six months ahead of the original January 1, 2007 deadline.

The president called for the establishment of a Rouble-denominated oil and natural gas stock exchange in Russia. "The Rouble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for in Roubles," he said. Putin said this would be impossible without economic growth of over 7%, which, he said had been achieved in the past three years.

This is the second most significant step in removing the U.S.$ from the throne of sole global reserve and trading currency! Should any more oil producers take this step, it will precede a U.S.$ crisis and create massive potential instability in the globe’s foreign exchanges. Because this is so important to gold and to you the reader, we are going to turn this into a series of pieces detailing the way forward. Needless to say, these moves are very, very positive for gold. If Putin keeps his word on the gold front, we should expect Russia to enter the gold market as a buyer soon too?

http://www.kitco.com/ind/AuthenticMoney/may162006.html

[paparush]

36. And we wonder why Al Gore says he isn't running...

who, in their right mind, would want to try to resolve this crap?

[H2O Man]

5. Nominated.

This is a very important OP. People should be interested in it. And concerned by the implications.

On 9-12, the USA had the sympathy of most of the world. Bush/Cheney have destroyed most of the good will this nation enjoyed. They have made us the most hated nation on earth.

[scarletwoman]

7. Thanks for the reminder to nominate, I've added my vote. (nt)

[stepnw1f]

8. Good God Help Us All

I really do me that. Times will be very tough... unless we all work together.

[robertpaulsen]

9. Thanks H2O Man.

There are scary geopolitical shifts taking place that are even scarier when you consider what our current Commander-in-Thief's usual response is in the face of adversity. In light of recent events, I do not expect UN sanctions on Iran anytime soon, which will only increase tension within the neo-con circles of power. Add to that the stress they're already under from Plamegate; you can smell the recipe for disaster cooking.

[H2O Man]

11. We are in a position

today that would tax the skills of our most talented leaders. Sometimes I think about, in modern times, the leadership skills of JFK and RFK in the CMC. When I watch the current "president," I can't help but think how inadequate he is.

[AngryAmish]

14. or the Bay of Pigs

[JanMichael]

29. True but the fact is other nations have long desired to be free of US...

....Imperialism.

Bush has made it easier to say "FUCK OFF" economically in many languages:-)

[Jim Warren]

38. On 9-12, the USA had the sympathy of most of the world.

Bingo!!!! That's the first thing I thought of when I read the OP. There were candlelight vigils in TEHRAN fer chrisakes the week after 9/11.

[EVDebs]

39. H2O Man, have you read Plan B 2.0 yet ?

Lester Brown's book shows that if China and India try to emulate the US style economy, based upon oil consumption and a 'throw away' ethic, that by 2031 things hit the fan.

As it now stands, the planet requires 5 planet earths just to keep up with US consumption ! Imagine how unsustainable it's gonna be with both China AND India copying us.

[robertpaulsen]

43. Sounds like the "flat-earth" paradigm is about to flat-line.

I haven't read this book, but it sounds like an interesting read. Does he believe 2031 is when we will hit Peak Oil? To me, the question of Peak Oil is not if it will occur, but when. And when it does, unless we have redesigned the planet's economic infrastructure to be based on renewable energy, our wonderfully globalized "flat-earth" that Thomas Friedman and his ilk have glorified will be dead in the water. Considering that China is expected, by 2020, to be consuming the same amount of oil as the US is right now, I would say the odds for sustainability are getting worse every passing year.

[EVDebs]

44. Not peak oil but peak consumption. Here's a quote from the book

"The western economic model--the fossil-fuel-based, automobile-centered, throwaway economy-- will not work for China's 1.45 billion in 2031. If it does not work for China, it will not work for India either, which by 2031 is projected to have even more people than China." page 11

BTW, the book is downloadable/readable for free from the web at

http://www.earth-policy.org/Books/PB2/Contents.htm

(I bought a copy for about $16 at a bookstore)

Amory Lovin's Winning The Oil Endgame is also a $40 or so book that's available for free downloading at

http://www.oilendgame.com/ReadTheBook.html

Hopefully I've saved you DUers some coin here. Please spread the word on these books BTW. The * is hitting the fan and the media is oblivious.

These plans aren't even labellable as 'Democratic' or 'Republican'...just commonsense, which someone needs to get through to the idiots in the current administration, or to the hopefully coming Democratic House/Senate to come !

[robertpaulsen]

45. EVDebs, you are awesome! HEY DU! 2 FREE BOOKS HERE!

I gotta say, just by looking at the chapter list for Plan B 2.0, I am impressed by Lester Brown's thoroughness. Both of these should be rewarding reads.

Thanks a lot! :applause:

[enid602]

6. Saudis

Bush better be real nice to the Saudis this summer.

[undergroundpanther]

10. we are sooo fucked.

oh well this is what we get when we let ourselves be led by charismatic assholes who tell us what we want to hear and let them and create for us our enemies( who are their allies(sssSShhhh) play good cop bad cop with us with a single two armed party trick until they have destroyed the world and us with it,just to say they"won"/..This is what you get when you give power and trust a sociopath,Liberty requires VILAGANCE..too bad so many scared to think outside what everyone else thinks kinda people call the vigilant and observant a bunch of paranoids and tin foilers..YThe dots are there..learn where they lead to.Dare to ask.

Jesus said, "Those who seek should not stop seeking until they find. When they find, they will be disturbed. When they are disturbed, they will marvel, and will reign over all. " Secret Gnostic gospel of Thomas.
http://www.webcom.com/gnosis/naghamm/gosthom.html

[Jigarotta]

12. ya'll know that when things get ugly

for other countries being agreeable to their own citisens and not our normal western ways of waste and pillaging....

it's gonna get Oogly. personal to all of us who have had the cornucopia all this time.

[Truthy Nessy]

16. Does the present times seem parallel to pre WWII

I was thinking Hitler was delusional. and W certainly appears to be. Hitler got to be popular and after 6 years invaded Poland. This link is pretty good. the writer compares Cheney to Goring.

http://news.goldseek.com/InternationalForecaster/1148223780.php

[AlamoDemoc]

17. Even some Europeans are doing their part of boosting the Euro

http://www.aljazeera.com/me.asp?service_ID=11145


"Recently Sweden has cut its dollar holdings, from 37 per cent of central bank reserves to 20 per cent, with the Euros share rising to 50 per cent. Central banks in some Gulf States have also lately mooted a shift into the Euro. Such sentiments helped push the dollar to a seven-month low against the single currency last week."

[robertpaulsen]

19. Good catch there! Let's see if the rest of the EU follows suit.

Wow, even the Swedes don't trust the almighty buck. This is like a snowball going downhill fast.

[Union Thug]

18. Payback's a bitch n/t

[DemReadingDU]

20. Please explain for my uneducated brain

If Iran replaces the dollar with Euros as oil currency, what does this mean to me? More expensive gas? High inflation?

Thank you

[Fovea]

22. Google Weimar Germany

and check the inflation rate.

[robertpaulsen]

23. Definitely more expensive gas is on the way.

As far as inflation or recession, that depends on how Bernanke responds. If he stalls on raising interest rates too soon, it could trigger a recession. If he keeps raising, it could spiral into inflation. At least that's my rudimentary understanding of the situation.

Of all the links I posted, I would encourage you to read this one entirely. He understands the kind of economic peril our country could be in if 15% of the world's oil supply ends up being priced in a denomination other than dollars:

http://www.raisethehammer.org/blog.asp?id=230

[DemReadingDU]

26. Thank you, appreciate the info to become more informed

[dipsydoodle]

32. Taken in isolation

your gas would increase in price simply as a result of the USA needing to buy oil in euros instead of using petro dollars. It does not necessarily follow that an increase for that sole reason would be significant. However a fall in the value of the dollar is a different as that would compound the situation.

Once again , yes even in isolation , permanent increased pump prices would fuel <no pun intended> inflation due to subsequent increased delivery costs of all goods transported by road.

Iraq originally switched over to euro oil sales back in the '90s just to spite the USA. In doing so they lost a huge amount of money - it's called cutting your nose to spite your face. It did however cost the USA a fortune to buy Iraq's oil in euros through the oil for food program. After that Iraq made huge windfall profits anyway when the euro gained strength against the dollar. The situation is regarded by some as being the true underlying reason for war in Iraq - to get their oil back into petro dollars.

There are lots of links on the petro dollar cycle / recycling just search for some and find one which makes sense to you.

[DemReadingDU]

33. Thank you for your suggestions!

lots of info, I need a spare brain to keep track of everything!!

[LunaC]

21. Thank you!

I'm the one who first posted about the Russian oil bourse and I was disheartened that it sank into oblivion so quickly. Reviving and adding to my OP, keeping it front and center, is much appreciated. This is a very serious development that has far reaching consequences for the U.S. $ and our future well-being - economic and otherwise - and I wish more folks would take note and wake up to what's coming our way.

The rest of the world knows it's pointless to try diplomacy to talk sense with this PNAC-dominated Admin or challenge them militarily so they're reacting with the only other option at their disposal. While I'm glad they're sending a big "Fuck you!" to *, I'm saddened and deeply worried that the rest of us will be taken down with them.

[robertpaulsen]

25. Your welcome!

I gave your thread a kick in case anyone wants to add anything there. But yes, thank you for being on top of that story. Remember that Jim Morrison lyric, "They've got the guns, but we've got the numbers"? That's what the rest of the world is thinking right now.

[Initech]

24. Gee, you think other countries are pissed at us?

I wonder why?



Oh yeah, that's why.

[lovuian]

27. One very BIG problem Iran Russia and Chavez has

refining capabilities very very limited...

[robertpaulsen]

28. That's an important point to remember.

Also important to note the big picture of global oil production: we're fighting over table scraps.

[IDemo]

30. There are greater problems for the dollar than a foreign oil bourse

Of the economic threats we currently face, I would put the Euro-Ruble oil bourse at the back of the line, behind unsecured American debt, the loss of manufacturing, the real estate bubble, Iraq war costs, energy costs, and a congress that burns US taxpayer money at blast furnace levels.

Already a cliche: "The dollar is toast". Neither Putin nor Iran's Ahmadinejad can threaten it any more than our own business and government "leaders" already have.

[robertpaulsen]

34. I'm not sure how to rank our economic problems.

It seems to me like all of the factors you mention add up to a perfect storm, or what Stephen Roach calls "economic Armageddon". But if you're saying that Putin and Ahmadinejad would not be taking the actions they are unless the dollar was in an already precarious position, then I agree with you. I would also add that their actions represent the tip of the iceberg. Strange days have found us.

[Brundle_Fly]

31. Iran Russia Venezuela

Hold some cards.

When the dollar dumps, the Chinese, Saudis Japanese, and whomever else holds the better part of of our countries value, we are really REALLY screwed.

[Spazito]

35. Kick for a very important thread

Once the bush cabal made it no longer in the mutual self-interest of other countries to be aligned with the United States both politically and economically, it was only a matter of time when the distancing would begin.

I have posted many times that the world would not stand by and let the bush cabal continue their destructive path and would act not militarily but monetarily, economically, and this is what we are seeing now, imo.

[Ganja Ninja]

37. The rest of the world is going to pull the rug out from under us.

Pay up on your debts. Get a fuel efficient car and get ready for a replay of the 80's X 10.

[dpbrown]

40. That's why the oil people invaded Iraq

To keep Iraq from switching to the Euro.

[WhiteTara]

41. wow. The Sh*t is about to hit the fan

the dollar is down to 84.47 ...that was a couple of hours ago. We are in trouble.
:hide:

[dpbrown]

42. I guess we'll be invading "old Europe" next

Par for the course.

[robertpaulsen]

46. Kick for Tuesday crowd.

:kick: