The Workermonkey

Saturday, January 14, 2006

Iranian Oil Bourse 

# posted by wyldshaman @ 1/14/2006 09:24:00 AM

If you live in Cambodia and you want to buy something for more then 4000 Reil($1), the national currency, you pay in US Dollars. If you want to buy a house in Russia, you pay in US Dollars. If you are a Chinese business man and you want buy a barrell of oil you pay in, you guessed it, US Dollars.

So what? Well throughout the world, the US dollar is held as a hedge against local currency fluctuations, plus, everything is priced in dollars, everything, mainly being the worlds #1 Commodity OIL.

The Iranians and others are tired of this "Dollar Supremacy", as it gives the United States a huge economic advantage. Since the EU implemented the Euro, it has been fairly stable and since the majority of Middle Eastern Oil ends up in Europe and Asia why should the worlds oil be priced in only Dollars?

If a Euro based Oil Exchange is implemented by the Iranians, it could have a devestating impact on the US economy. Why? If im a Chinese business man or a Russian homebuyer why would i want 3 currencys, my local for bread, my US dollars for some ocassions and the Euro for others? I just might switch to the Euro, its closer to home, just as stable and just maybe, i like Europe better. If this happens everyone and there uncle will start running to the banks and dumping their US dollars for Euros, thus a flood of greenbacks will come home to the United States.

What happens when lots of cash comes back, in the order of Trillions of Dollars? Our Greenback will inflate and fast, if Foreign central banks even think this will happen, they will start moving their dollar holdings into a more stable currency, furthuring the inflation rate. Hyper-Inflation = Doom!

Two articles about the Iranian plan and oil wars, the 2nd one is more current;
http://www.globalresearch.ca/articles/CLA410A.html
http://www.energybulletin.net/7707.html

Of, For and By The People

6 comments

Inflate the dollar? I believe it would devalue the dollar.

There will be a rise in sellers of the dollar, as people move more cash to Euros.

The dollor will drop and import prices will rise. Although Asian countries will still try to stay close to current exchange rates as they currently do.

U.S. businesses will find it easier to export. U.S. int'l companies will bring home bigger profits as they convert foreign currency back to a cheaper dollar.

Some inflationary effects as the price of some imports rise. If inflation rises, interests rise too, adding buyer interest in the dollar. Keeping it from free falling.

So, bottom line, it's a mixed bag. No big move down, but a continuation of the trend where inflation and interest rates start the slow move upwards again. And investment choices change as some will benefit more than others.

There's always an opportunity out there to make money if you get ahead of these trends and ride the out.

By  Anonymous, at Saturday, January 14, 2006 11:54:00 AM  

international money markets have all ways peaked my interest. Although I know nothing more than good investors place this game, not the stock market.

By  ron, at Saturday, January 14, 2006 2:07:00 PM  

While anom. might be right on the theoretical economic implications of a collapsing dollar, I think the big concern is the loss of political influence. It's an unknown X, the measurement of which we can only speculate on because we are not privy to the true going ons of the international political scene. I would not be surprised if the gov't used our currency's status as "world's coin" as leverage to finance alot of our national debt. Or in any way that a large group of the most ambitious (and often crooked)Americans could think of to grab and hold onto power. I think the problem with economics, while interesting the hypothesize over, is that X-factor of political influence. J.B. if your anom. , remember that conversation we had about no true laizes-fair economy could exist? Regardless of where you stand politically, or how you think the international economic scene would equlibriate (is that a word?), you have to accept that such a major change would have very wide ranging implications. There could be effects that no one is prepared for. I think that just the uncertaintity of how our foriegn policy (foriegn aid, use of force, willingness to go along with the change ect.)would change would disrupt the system to a large degree. Hypothetically, one could argue that not the Euro, but the Yuan would be a stronger contender for the international denomination. There certainly would be a struggle between all the currencies to achieve pre-eminance in this arena. And no one could convince me that every major power, governmental, religous, or corporate won't seek to influence the outcome in every way concievable (including using more sordid methods of persuasion).

Anyways.

Fuck you Ron. It's one thing to have good spelling at work. But, on my time, I operate from the "NBR unbridged dictionary" where everything is spelt foanetically.


I hate you all. Good night.

By  NoBrainRequired, at Saturday, January 14, 2006 7:46:00 PM  

The Yuan is strong, but it still does not completely free-float, also the Euro is a, im kinda making this up, decentralized currency, with many nations taking part and others able to join in, as opposed to just one, as is the case with the Dollar and Yuan, in my opinion this gives the Euro added value.

As for Anonymous's comments, i agree, if its inflation we are talking about ranging from 5-25%, but Hyper-Inflation is more of the fear here, in the order of 100-1000% a year, if this happens.... well really it could be good, as the what is it now, 7 Trillion plus we owe would be wipped out, as would our economy. It needs to happen some time, the sooner the better.

Anyway its fun to talk about.

By  wyldshaman, at Sunday, January 15, 2006 8:50:00 AM  

Oh and i went off on the infaltion tangent(is that spelled right Ron?) i forgot to mention the point of this story.

Lots of people have nukes and want nukes, but we are really only threatening Iran. Why? Because they want to dethrone the Dollar, if we bomb the heck out of them, they will think twice about their Oil Bourse idea! Thats the Neocon thinking, i think.

By  wyldshaman, at Sunday, January 15, 2006 10:03:00 AM  

I forget if it was a few years before USSR'S collapse or after Russia turned capitalist (Gorbechev's Perestroika plan was starting to move it that way) , but they ended up having to pay $1000 for bread or sugar due to hyperinflation. Soon only the rich will be able to make sugar cookies.

By  DJ Booze Piñata, at Tuesday, January 17, 2006 12:37:00 PM  

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