Iran completely stops selling oil in U.S. dollars

[Robbien]

Source: AFP

TEHRAN (AFP) — Major crude producer Iran has completely stopped carrying out its oil transactions in dollars, Oil Minister Gholam Hossein Nozari said on Saturday, labelling the greenback an "unreliable" currency.

"At the moment, selling oil in dollars has been completely halted, in line with the policy of selling crude in non-dollar currencies," Nozari was quoted as saying by the ISNA news agency.

The world's fourth largest oil exporter, Iran has massively reduced its dependence on the dollar over the past year in the face of US pressures on its financial system and the fall in the dollar.

Nozari did not specify in which currencies Iran was now being paid. In the past, officials have said most oil income was in euros, with a significant percentage in yen.

Japan, which purchases 20 percent of Iran's crude oil, has recently agreed to pay for the crude oil in yen, officials have said. The UAE dirham has also been mooted as a possible payment currency.

Read more: http://afp.google.com/article/ALeqM5jGC7KSKjsKYUTGAF1oR04-yOpBgg

---

This article is all over the foreign press. The AFP, China's Xinhua, Russia's Rian, South Africa's SABC, Iran's ISNA. No mention in any US news site as of yet.

[bemildred]

1. Another stirring foreign policy "success" for the Neocons. nt

[Sarah Ibarruri]

75. The Euro is strong compared with the dollar. nt

[bemildred]

98. Lot's of currencies are "strong" compared to the dollar. nt

[Sarah Ibarruri]

102. Yep. This country is being slowly destroyed by corporate a-holes

And we're doing nothing about it.

[ixion]

2. Euros, Yuan, and Yen

meet the new boss(es).

[Betty]

3. how inconvenient for bush

that those intelligence reports just came out.. it's going to be harder to invade now and take the oil that is rightfully his.

[screembloodymurder]

4. Worst President in history?

Hell, he may be the worst leader regardless of title.

[krkaufman]

70. I was just pondering the other day ...

... that every President in the future will have the convenient fallback of "better than Bush" to give them comfort. (That is, should the American people be bright enough to not allow one of his Republican clones to enter the White House in 2009.)

[End Of The Road]

5. Does this have dire consequences for the dollar?

Awhile back, I followed the stories of the developing Iranian oil bourse, and the gist I got was that the value of the dollar would fall when countries did not have to maintain US Dollar reserves to buy oil. Anybody know more about this? Will we see the dollar fall to 50 cents?

[Robbien]

7. Iran has been steadily dropping the dollar all year

which is one part of the reason the value of the dollar has been dropping. This article is stating that the last 15% of oil still traded for dollars by Iran has been discontinued.

So the final closing of the oil/dollar trade may have some nominal effect on the dollar value, but most of the dollar devaluation from this stoppage has already occurred.

[jwirr]

36. Considering *ss's diplomacy policies we are damn lucky that

they drew the movement away from the dollar out over a long period instead of just dropping us in a free fall.

[Demeter]

76. Its Also Partly Why Bush Was Hellbent on War with Iran, IMO

He doesn't understand the difference between "Client States" and Slave States".

[bullimiami]

6. the us might want to start thinking about trading in the euro or yuan.

bush and friends have destroyed us.

[Pavulon]

9. Not Quite

A weak dollar makes the very expensive products we sell over seas much more competitive against our european competitors.

It makes domestic consumption of european goods more expensive.

[fasttense]

20. And what exactly are we making here and selling overseas?

Aside from our trash, agra farms products and raw materials, we don't export hardly any products made in the USA. Oh maybe you mean our jobs.

[Paulie]

51. Why DEBT of course!

Consumer and government debt. We make oodles of it. :)

[Pavulon]

54. The same stuff the EU

makes. Developed nations have seen low tech manufacturing move overseas. Textiles are an example of this. Money like water takes the path of least resistance. Industries that fight that fail.

Boeing 777s, pharmaceuticals, bio chemical research, and other high tech equipment is made here. Just like the UK or other EU nations do not make shirts or computer memory. Innovative economies drive the rest of the world.

Services (not service industry) from IBM (you can sub others in for IBM) and others still generate billions. IBM files more patents in a year than any other company. Those ideas generate wealth and power an industry. If the chip is made in Singapore is of no consequence. The money funnels back here.

The US debt trends are similar to that of the rest of the developed world.

If you are at CERN or LANL and come up with a new design for a nuclear reactor that system will not be made in china or india.

Now as soon as we have a working system that reverts the trillions paid out to petro states for a product that requires NO INNOVATION, no real effort to bring to market, we have an amazing thing.

[liberation]

79. Not so fast....

Most of the 777 main sub assemblies are made in Japan, for the most part Boeing is a simple assembler of stuff flown in from Japan (mostly). Where as Airbus is the final assembler of stuff flown in from the EU (mostly). Biiiiiiiig difference where the money stays under both companies.

The main problem is that the Euro being so high is not what the EU wants/needs as their economy has still plenty dependent upon production and exports.

To compound things further, with such a weak dollar and the "services" economy shoveled down our throats as a good idea we should have seen a reversal in the rate of outsorcing we have been suffering for the better part of this decade. However, we have not seen that. Which leads to those people to believe that all that stuff about services and value added as being the key to recover all the money lost to ship our produciton overseas is in no other terms pure bullshit.

It takes a special kind of con man to make the case that giving your crown jewels away is a great business approach, but it also takes a special kind of naive to agree with giving away your crown jewels. In other words, it takes two to tango. And the US seems to be a dancing team made of greedy assholes and naive idiots as its dancing partners.

BTW, Europe still makes plenty of computer memory. Inifineon, ST Micro, Philips, et al still produce most of their 65 and 90 nm parts in Europe... go figure.

[davekriss]

101. You optimist, you!

Pavulon says,

IBM files more patents in a year than any other company. Those ideas generate wealth and power an industry. If the chip is made in Singapore is of no consequence. The money funnels back here.

Sure ROI, or a part of it, flows back to here. But to whom? The factory worker who lost his job to a person in China willing to work for pennies on the dollar? And in a plant markedly less safe to the worker and environment, under a government hell bent on keeping it so? Or the CEO, other senior management, and shareholders grinning from ear to ear while downing rounds of martinis at the country club on a workday Wednesday afternoon? Margin improves and money flows but at the cost of the vast majority of American people.

Very few of us are equipped to work at CERN or LANL to come up with a new design for nuclear reactors. And there is no amount of education that will make us so. Instead we may have been equipped to be machinists in tool & die plants that serviced Detroit when it made automobiles, our plant long closed after Detroit began sourcing major components from Jaurez or Chenzen. The cost of labor flowing into the final price of the automobile may have declined, but the beneficiaries are certainly not us. Just a thin sliver of "us", the owning class and the managers and magistrates that service them. It is sheer madness for the rest of us to go along quietly with the (globalization) program.

In 2001, the top 20% of the U.S. population owned 89.3% of all stocks in the U.S. The bottom 80% owned 10.7% (here) It's to that top 20% that the advantages of globalization flow (arguably only to the top 5%). Why should the bottom 80% continue to vote in candidates that augment the powerful economic advantage of the top 20% of us? What's in it for them? Well, economic insecurity and misery, opportunity to serve as canon fodder in neo-imperial wars, opportunities for wage slavery and debt peonage as we compete for any remaining low-quality job capable of feeding our families, pacification under the weight of propaganda slopped forward daily by the major media now principally owned by 5 mega-firms.

and i've been around the world now
and i can see this about america
the mind control is steep here, man
the myopia is deep here
-- Ani Difranco

[spag68]

71. stillmadeinusa.com

go there and see what is still made here. There are many machine goods and high quality goods made here along with steel products. Don't be so quick to trash american producers, they are still at work despite the bush crime family trying to finish the rest of rayguns work.

[dmallind]

85. US is #2 exporting economy

And BTW China is NOT #1

[Psephos]

91. The US is the world's largest industrial economy

as well as the world's largest aggregate economy.

From the 2007 CIA World Factbook:

"The US is the leading industrial power in the world, highly diversified and technologically advanced; petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, mining..."

The US is also the #2 exporting economy (after Germany, which is #1). The US exported $1.023 trillion worth of goods and services in 2006. China exported $967 billion. Two thirds of the US trade deficit is due to importation of oil. As oil rises in price, it increases the trade deficit, masking industrial exports.

Meanwhile, US GDP per capita is $43,500. China's is $7,800. The US economy is approximately a third larger than China's, but the US does this with only a fourth of China's population.

https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

The CIA World Factbook is based on public, global economic data. These numbers are not spin or propaganda, they are data.

[BearSquirrel2]

31. Not in China and not necessarily ...

1) It doesn't do anything to the exchange rate vs Chinese currency as they peg the value against the dollar.
2) The Europeans and Japanese still have lots of tariff barriers as we were the only country stupid enough to completley buy into the notion of "free trade".

There is a great calamity coming when the middle class runs out of credit.

[liberation]

80. The US still has plenty of tariffs...

The main reason why a lot of foreign auto makers build factories in the US is because that is the only way they can deal with the US and its whimsical tariff policies. A lot of European auto makers have been burned repeatedly by US imposing tariffs whenever the US made crap needs protection.

I had a colleague who worked for BMW and was one of the managers setting up all the production lines over in the factory they opened in the US. They were none too happy to have to deal with the issues that the factory gives them, but it is a smaller head ache than being subjected to US tariff policies.

Shit stinks every where, and the US is no exception. I just get a chuckle about how quickly some people here play the victim to globalization when this country was the one trying to shovel it down other people's throats. Guess what, the rest of the world caught up... now what?

[FogerRox]

89. Tariffs that used to be 20% and are now like 1 or 2%.

[mbperrin]

39. Another strategy for surplus dollar holders is to spend them

here, purchasing assets. Why buy the milk when you can have the cow nearly free? China has many trillions of spendable dollars if they choose to use them, and they have begun a tentative effort using $1.3 trillion of them.

Let's see, foreign ownership of most productive assets, inability of citizens to purchase alternatives from overseas due to unfavorable currency valuation, hmmm, lessee, price discrimination, anyone?

Or in plain words, stuff always costs more in the ghetto than in nice neighborhoods due to lack of mobility and choices by the population and control of assets by outsiders.

Oh, yes, valuations count.

[Pavulon]

50. China is complex

because its consumers are not allowed to (legally) invest in foreign markets. So you have blending of the oppressor state and free market behavior. The government can invest here, but not citizens. A weak dollar buys them positions of value in our market at discount. Once in that position they have no interest in causing devaluation.

So IPOs on the Chinese market are always a hit. Because if you live in china and have spare money you can either bank it, put under the mattress, or invest it domestically.

China's markets are very complex and volatile. Any change by the state can cause big shifts for the individual.

It is unwise to lump in the function of the economy to one administration. Many times there are significant lags and fast forward events that happen independent of who sits in the whitehouse.

[mbperrin]

53. Nothing too complicated about it.

THIS administration pushed through the huge tax cuts which increased our national debt by 400% and still growing.
THIS administration continues to antagonize governments elsewhere with the result that they no longer wish to take our currency as a world currency.
THIS administration now wishes to further increase deficits by widening the war and cutting corporate taxes even further.


Now, as to China buying assets. Your claim is that they would not support further devaluation once they own assets. Why not? The assets they buy will produce goods for domestic consumption here, not elsewhere. Currency fluctuations don't count in a domestic market only, and they don't need to export from here, they can continue from their own operations in China. As more depreciation occurs, they can increase their holdings here, as well as using the profits from their operations here. With fewer choices abroad for citizens here, caused by the depreciation of the dollar, we become locked into that one market, Again, this is why geographic price discrimination occurs. In some areas, it's the company store, in other areas, it's price gouging. All are caused by lack of mobility and lack of choice by the locals.

Look to Appalachia and any inner city area for the future of the United States as being created by THIS administration.

[Pavulon]

55. Remember when all the morons were smashing Japanese cars

cyclical behavior is your friend. Everyone was all pissed off that Japan (who owns the majority of us debt, by far) was buying assets here.

Now an accord is built by americans, with american parts. Most domestics, not. Got a hemi? Made in Mexico.

Once you peg long term cycles you can look for trends. China, once invested, has no interest in loosing trillions of dollars. They want access to lucrative markets.

You are looking at micro trends in a massive system. Geographic pricing does not equate to global trade.

Simply put if you invest surplus cash in a small business, you have no interest in taking actions against the small business that would cause you to loose your principal.

Check out Exports trends at long beach pier. Hint, lots of stuff going out.

[mbperrin]

57. Long Beach, yes, take a look.

Lots MORE stuff coming IN, ain't it?

Macro is just the sum of micro, and many a fortune has been made in impoverished areas by convincing others that there is no use going there and having that inelastic market all to one's self. This does not harm the company, only the consumer.

Equating interests of corporations and consumers is just what this bunch would like to do. However, what is good for General Motors is not necessarily good for the USA, just for the owners of GM.

Japan is always a special case, of course. They bombed Pearl Harbor, we dropped two atomic bombs on them, and they learned to play baseball and make cars really well. They learned their lesson: this country will kill you without a second thought if they're mad at you.

[Pavulon]

59. Now you are in the weeds

lets stick to economics.

Germany and France can both fit the Japan model as well. There have been cycles of investment in the US by foreign nations.

Coming in is where eme is getting hurt. In my little world, the systems I sell are now much more competitive with their EU made counterparts.

We use US labor and employ Americans. So when we sell products that are now cheaper on a low dollar it is good.

Again in this sector. But we do not manufacture box fans or BMW's so this is good for us.

[ingac70]

67. Honda uses PRISON LABOR in the U.S.

to manufacture parts...

http://www.wsws.org/articles/2000/may2000/pris-m08.shtml

"Prisoners now manufacture everything from blue jeans, to auto parts, to electronics and furniture. Honda has paid inmates $2 an hour for doing the same work an auto worker would get paid $20 to $30 an hour to do."

[Pavulon]

93. Make a damn reliable car

prison or not. Shame GM has not figured out that formula, well put it to market in quite some time.

[ingac70]

97. Prison labor...

On our own shores to enrich a foreign company is pure evil.

[Pavulon]

105. Forced Slave Labor?

or the kind of labor someone in for drug possession can learn to get a $15 - 25 an hour job once released?

Context is important here.

[eridani]

120. Bullshit--as long asthe work is in prisons, getting out means losing your job

An electonics factory in Texas closed down entirely and moved its plant into a prison. The way their former workers get their jobs back is to knock over a 7-11.

[ingac70]

124. Those guys...

aren't getting those sort of jobs when they get out, and you know it.

[spag68]

72. national debt

I agree with trashing this admin. however get your facts straight, Clinton debt 5 trillion, Bush 9.8 trillion. It's really bad enough to not exaggerate.

[rexcat]

83. That's nice but our manufacturing base is being eliminated..

slowly but surely! If it keeps going the way it is we won't be manufacturing anything in the near future.

[tom_paine]

18. I wish I could be paid in euros. The dollar has no future.

A third rate currency from a Third World nation with Third World government and third world media.

[Pavulon]

8. Irrelevant. Oil is VALUED in $

The oil market is dollar based. SO the refined gas Iran has to buy because it is short supplied, is purchased in the dollar.

[NMDemDist2]

10. and the dollar is very weak, so their Euros will go farther n/t

[Pavulon]

14. No, The WSJ had a great piece on this

because the value of oil is set of dollars the currency used to purchase it is meaningless. I will look for the article, but the jist is because it is the global market sits on the dollar. What they choose to buy in is not relevant.

[aquart]

22. I probably wouldn't trust the WSJ on this.

[tom_paine]

26. You don't see this a the first logical steps to changing oil valuation entirely?

Ok, then. We'll go with sunnay and overoptimistic. The levees will hold. I KNOW they will hold.

What else are the self-serving swine who get paid to pimp our increasingly corrupt financial system going to say?

They will do ANYTHING to stave off what is coming, to keep we sheep docile and grazing as long as possible while they build their Bushie Prison around the field we're in.

So much of that is "peasant confusion" and "peasant tranquilization", both of which are cottage industries, if not by now the main reason, for most of our relentlessly overoptimistic "mainstream financial news".

They just want to get away with the loot before the whole shitstorm comes down around our heads. They want what the Airstocrats on the (and by "want", I do not mean a traditional conspiracy but a group of people on the same wavelength prusuing them same prudent interests in a collapsing nation and world in which fewer and fewer seats are left on the lifeboats every year) Titanic had, knowing it is in their own best interests of safety and escape if the band keeps playing the commoners all the way under the waves.

Otherwise, we might disturb their genteel debarkation from the Titanic with our pathetic pleas.

Go ahead, listen to the band, eat the hors'douvers, just don't bother those rich folk on the deck. What are they doing? Just a lifeboat drill. No, it doesn;t have anything to do with why the floor it tilting.

Listen to the pretty music. Have another hors'douvre.

[Pavulon]

33. Elegant but wrong..

I see Iran as a bit player in the industry. I see they have aligned interest with another bit player. However the real players spend hundreds of billions on us defense items.

Saudi is of interest. Iran is not.

Aristocrats, that is a dirty joke right. I have done business in most of the financial regions of eme, la, and asiapac. The reality on the ground is quite different.

[tom_paine]

35. The CEOs of Exxon and Shell and the Saudi Princes aren't aristocrats?

Did you really think I was speaking of the workers and middle-management, or was it just more convenient for you to think so?

You are correct, as the largest Arms Merchant in the world, by far (such a noble title for our nation..land of the TV, home of the World's Arms Merchants), this will act as a retardant to any actions taken which endanger the world economy.

But every day, as our economy is looted and hollowed out, along with our public treasury, the cost of such actions (partcularly since the Sub-Prime market scam was really about Bushies stealing hundreds of billions fromthe world by selling that crap to the world, who is now stiffed to the tune of hundreds of billions, and not at all happy about it) lessen, and if trends remain unreversed will one day be "cost-efficient" for the world to wage economic warfare, eevn if it's only "cold warfare".

But keep dreaming. Have you looked at the millions of jobs Bushler has produced (that is, after he lost four million jobs at the beginning of his Imperial Reign)? Most of the job increases are in Domestic NonTradable Services.

In other words, the overall effect of these last seven years has been a steady outflow of good-paying jobs, replaced mostly with low-paying benefitless McJobs. Even given that, the number of McJobs added STILL isn't enough to meet the amount required to keep even with population growth!

Yeah, we all know THAT'S the way to build a world ecomomic leader, isn't it?

And bit players with nothing to lose, why they NEVER act as indicators of future trends.

Look, we are going to have to agree to disagree. Especially if you actually thought I was referring to the workers and middle-magament of Big Oil as aristocrats, we are not on the same wavelength at all, because such a statement would be as ridiculous for me to say as it would for you to think that's what I meant.

The economy is great, OK? And oil will be valued and traded in dollars forever, no atter who we steal from and piss off, OK?

Oh, and the American dollar will be higher than the Canadian dollar...FOREVER! Ummm...oops.

[ooglymoogly]

86. Question for you Pavulon

are you a democrat or a republican?

[Psephos]

92. Question for you ooglymoogly

Why are you acting like an ideology cop? Diversity of opinion is what separates us (or any political movement) from becoming a cult.

A critical thinker like Pavulon does more good here (by stimulating thought and response) than any ten members of the Amen chorus posting identical comments. I've never seen Pavulon troll, he knows what good data looks like, and he stays remarkably nonplussed and on-subject despite the adolescent baiting he endures.

Isn't dissent the highest form of patriotism?

:kick:

“The essence of the Liberal outlook lies not in what opinions are held, but in how they are held: instead of being held dogmatically, they are held tentatively, and with a consciousness that new evidence may at any moment lead to their abandonment.”
- Bertrand Russell

[Pavulon]

100. A democrat and Democrat

Having a realistic view of global economics is not a political thing. Politics does not invade every space of life, at least for rational people.

Basic economic theory and function like algebra and gravity does not align with politics. That is not to say politicians do not use the economy, but that the governing forces of the economy are not political.

My views are based on my opinion formed of fact, no more.

[ooglymoogly]

121. So what you are saying is

economic theory has only a minimal bearing on the outcome (in that it is only a method) of manipulated economies that are in fact manipulated by economic theory. Using economic theory to produce a preordained outcome so to speak. So what does that prove other than an exercise in forensics? Some of the smartest and most Machiavellian economists in the world are behind what is now happening to America: Further economic theory only explains forensically how we are going down the tubes as a constitutionally governed country and is therefore a straw man. The fact still remains that Iran being the first domino to fall while others are rumbling; As far as the dollar is concerned it is of immense importance to the stability of the dollar and thereby the stability of this country as a country controlled by its people and its constitution and instead to a country controlled by conniving powerful interests. Your theories appear at least to me to be Friedmanesque (how to convert a democracy to an oligarky for the sole benefit of the rich) trotting out the old conundrum that when the value of a currency falls it all evens out in the end disregarding the myriad microcosms of the economy that will fall to the benefit of the very wealthy. Further the oil market is now global and no longer confined to the US which makes Iran and Venezuela (now reaching out to other Latin American oil producers and with the exception of Mexico being received very favorably) and with the sword of Damocles (china and Russia and their influence) hanging over the oil markets, Iran and Venezuela not minor issues "pissants". In fact Saudi Arabia might just become a pissant if Chavez is successful in uniting the South American producers and completes his wet dream, pipelines connecting like minds to use their huge collective oil to benefit its people. Contrary to Friedman we no longer live in the jungle, we are supposed to be civilized with a true ability to regulate our economy with compassion and for the better while harming no one. Meaning the rich can only have a few hundred million apiece, and not the wealth of entire countries.

You see doublespeak is easy when you get the hang of it.

[ooglymoogly]

87. Iran and Venezuela bit players!?!?....there needs to be a laugh track

on your posts and maybe a bad-a-bing. Why don't you just say what you really mean "move along folks, nothing to see here" instead of as you do on all posts that warn us by evidence of what is wrong with this government, instead giving us a lot of claptrap and propaganda, parroting the party line so to speak with the most convoluted Cliff May logic and generally trying to pipe us over the cliff. The outcome of the catastrophic damage done to this country and continues belies your odd polyanish logic and one only need look at the long string of outcomes of the past unabated catastrophe's to know you are full or crap.

[Pavulon]

94. Pissants

compared to what we import from , say , canada. Or from the daily output from saudi.

Hit up the DOE for import figures.

Math vs a bunch of jaw jacking.


http://www.eia.doe.gov/neic/quickfacts/quickoil.html

[ooglymoogly]

127. dream on

They say in the propaganda world if you say something loudly enough and often enough and in different ways it gains an air of truthyness. While not actually becoming truth it does hoodwink enough people enough of the time to makes it wildly profitable in the political arena.
It must keep you up at night wondering why our $tate dpt and our corporate media cheered on a failed coup against Chavez pitting the rich against the poor and is planning a war against Iran since they are mere insignificant "pissants".

[KnaveRupe]

69. This would be Rupert Murdoch's WSJ?

Just checking.

[liberation]

81. I never ceases to amaze the capacity of some people to not use common sense...

So what if the Wallstreet Journal says something so incoherent? It would be akin to claim that something that is wrong (like the earth being made in 6 days) is true just because it is written in the bible.

Petroleum is priced in dollars right now, but that is an artificial indicator. Oil production could still be priced in dollars as an index, and most transactions could be done in Euros (seller and buyer can simply use Euros for the transaction, an the dollar can simply be used as a virtual indicator as a side-translation.

Also the WSJ piece fails to mention, that most markets can switch to the Euro if there are enough sellers using the currency, as the index is whatever the buyer/seller agree to be. There is nothing stopping London, for example, to set up a Dollar/Euro trading index (in fact that is what they have kept on doing for other markets using their very own Sterling Pound).

[Pavulon]

95. Not quite

Common sense only goes so far in that market. Oil is a commodity, its TRADING VALUE in market is fixed is dollars. Done, end of story, all other transactions are secondary. You can trade sea shells or hours in the sack with high priced hookers against the DOLLAR. If you don't know what that means you should look it up before posting nonsense.

[jordi_fanclub]

125. MATH is also "Commom Sense"... sometimes!

By telling until "exaustion" that Oil is fixed in dollars DID NOT
mean that the TRUTH is what you see or what you want we "must" see!

Pick 2 charts:
- one of OIL vs DOLLAR, and
- other of DOLLAR vs EURO

Next draw a chart OIL vs EURO... then you can see that OIL is REALLY traded in EUROS!

[0007]

13. ........ Hmmmm

I believe that the trading of oil in Euros is inevitable and is not a matter of “if” but “when”. Which country or group of countries will bring about this change is still to be seen.

When oil starts trading in Euros the first thing that will happen is that the demand for US Dollars will start to fall hard and fast and will soon not be as important to the world as it has been in the past. It will lose its dominance as the de-facto world currency. The world’s perception of the Almighty Dollar will change.

One of the first and most important consequences of oil valued in Euros would be that foreign nations and foreign corporations that have invested in US Dollars denominated assets will start to liquidate some their vast holdings, switching into euro-based assets. This will be enough to drive the value of the US Dollar down. When that happens even US corporations and big trading houses (while not un-patriotic) will also sell the dollar short for a profit. It is simple demand and supply economics. The demand will surely drop, and there will be a glut of US Dollars in the world markets. The Federal Reserve will have to start buying back our own cheap dollars to support it, or else it will fall very hard. They may even convince some of our allies to do the same through their central banks.

The next likely thing to happen will be the pricing of other commodities such as gold in Euros. That too will add more downward pressure on the US Dollar. The Federal Reserve will have no choice but to raise interest rates and tighten the supply of US Dollars. Otherwise they run the risk of rampant inflation or even deflation domestically.

While this is happening real estate in the US will drop too as foreigners divest themselves of U.S.-based real estate. Even US corporation may reduce their real estate holdings to avoid large losses. Think of all the individual people and families who have bought million dollar homes in the last few years based on the extra equity they accumulated, while putting down only 5-10%. When the price of their homes fall, it will reduce their family net worth. In many cases it will put added presure on their monthly budget. There will be layoffs at many major corporations that have been adversely effected by the weak dollar. If any of these people lose their high paying jobs, they will not be able to meet their financial obligations. This will lead to many individuals and families defaulting on home mortgages and credit card debt. Banks will not fare too well. A spiral effect among some if not many of the U.S. corporations that are in the business of real estate, lending, and financial services, will serve to further devalue the U.S. stock market.

http://www.optionstradinglessons.com/otl_article3.php

[Tempest]

41. It may be valued in dollars

But it's not being purchased with dollars.

There's a big distinction there.

[Pavulon]

47. Not really

because the market is valued in dollars sellers are "paid" in dollars. The currency may be different but the true value is what matters.

Really this is established economic position, not on the fringes here.

[Deja Q]

52. Another reason to give him the moniker "Amadingynutjob".

[Hydra]

64. Not for long, it isn't

The era of the petrodollar is almost over. The fact that we can't bomb all of the countries into submission that are wanting to sell in something other than dollars was the harbinger of the end of said monopoly.

From your seeming POV of free market, the petrodollar is an absurd concept anyway- our paper is somehow better than someone else's?

[SarahB]

73. For now it is. nt

[tom_paine]

11. This is not a topic permitted to be addressed on Amerikan TV Infoganda

Not permitted.

I'll say it for the millionth time: it simply amazes that the Bushes can get the kind of blanket self-supression through more subtle means that turns out to have an identical efect as if their were bewetle-browed Bushie Comrades in every newsroom with guns pointed at the backs of people's heads as they wrote and edited.

[Pavulon]

15. USA Today crowd

does not care about the functions of complex commodity markets. Oil is up it is OPEC. As far as it goes.

The WSJ and Financial Times have detail on the functions of these markets.

[tom_paine]

17. Missing my point. Whatever the mechanism, greater than 90% of Amerikan Subjects

will never know about this until much later, for most never.

We can argue about the whys and wherefores until we are blue in the face, but the facts are the facts.

Just like, 7 years later, the number of Amerikan Imperial Subjects who believe Saddam had something to do with 9/11 is rising again!

Whatever some few newspapers reaching some few people say, the vast majority will never know...and do not even want to know. Too busy watching fake CNNFOXMSNBC "news" and obsessing over American Idol.

And this is how great nations die...not with a bang but a whimper.

[Pavulon]

30. I refuse to support the "death" of a nation meme

because of the impact of a bad administration. It is not backed up in fact and in no way contributes to improving the fate of others.

We give away more financial aid than the wealth generated by some nations.

The us is still unparalleled in economic mass. Bar none. Dont say china without doing your homework.

[tom_paine]

34. I won't say China. And if you think what is going on in this coutnry is the result of one bad

administration, then I submit you have not been paying attention.

Please take half-an-hour to listen to this BBC radio program, which will show that the Bushies have been up to this sort of thing for at least seventy years.

http://www.bbc.co.uk/radio4/history/document/document_20070723.shtml

Knowing their Bushie genesis might help you analyze what is going on these days. I understand you disagree, but it's not a meme. It is the obsrevable reality, particularly now that it has become so very obvious, with serial-felonies shameless perfomed in broad daylight by Royal Bushies, and no one with the balls to prosecute one of them.

Plus, whatever our economy is, it is increaisngly being built on foriegn debt, bankrupting the future, and the fact that we dont really make much tangible stuff in this nation anymore. More poeple become more impoverished every day, this is borne out by the now-continually increasing numbers of people in poverty.

And on and on and on. We will have to agree to disagree about that. I see the House of Cards looks like a Steel fortress to you, and that's. Maybe it will turn out to have been that, then you can tell me I told you so in a decade.

But listen to the BBC radio program. I guarantee you won't regret it.

[PassingFair]

108. Regret it?

Have you seen his posts?
He wants to PROFIT from it!

[FogerRox]

90. The US EMpire is in decline, while China and India are on the upswing.

[Toots]

12. Venezuela is next

Venezuela just was determined to have much more reserves then previously thought and in fact probably more than even Saudi Arabia and it will follow Iran in this decision. The USA, through it's arrogance and bellicosity, has turned the world away from it's financial foundation as well as it's moral position. The USA is on it's knees and the knockout punch is on it's way..

[Pavulon]

16. You have it Inverted

Venezuela has a crude that only one country is CURRENTLY set up to refine. That is us.

Money is money, Venezuela is a petro state with one geographically relevant customer. Again us.

The market is totally flexible so even if they never sell a drop to us thad displaces demand from some other place and frees up a supply.

Their ENTIRE economy is based on oil. No IBM, Boeing, GE, nothing but stuff in the ground.

[End Of The Road]

19. How long until China can refine?

I read somewhere that someone is building a refinery in China for Venezuelan crude -- but do you know when it will come on line?

[Pavulon]

27. How long to build a pipeline to get it there

The cost of transporting oil from Venezuela by tanker, around cape horn through the furious fifties (because any substantial tanker cant make panama) and then to china.. Long dangerous trip.

[Viva_La_Revolution]

42. That pipeline was agreed on with China in 2004

Construction has begun.

Here's a list of other current agreements:

How is Chavez expanding Venezuela’s commercial ties with other countries?

China. Venezuelan oil exports to China have gone up to 150,000 barrels per day in 2006 from the 12,300 barrels per day being delivered in 2004 and are expected to increase to 500,000 barrels per day within five years. As part of agreements signed in 2005, China is investing $2 billion in oil-related exploration and development projects in Venezuela’s Zumano region and Orinoco oil belt. China is also investing $9 billion in transportation infrastructure as well as telecom, mining, and the agricultural industry.

Iran. Venezuela and Iran made agreements in August 2006 to build joint oil refineries in Indonesia, Syria, and Venezuela. In addition, Iran’s state-owned oil company Petropars has begun to invest in oil exploration and development in the Orinoco belt.

India. Venezuela agreed in April 2006 to begin sending two million barrels per month to India, according to India Daily. Both countries are jointly exploring for heavy crude oil in India.

What are Venezuela’s regional ventures?

Venezuela is South America’s third largest market and is actively pursuing further economic integration with other countries in the region. In July 2006 it became a member of the South American trade group Mercosur (Mercado Común del Sur), joining Brazil, Argentina, Uruguay, and Paraguay.

Argentina. Venezuela and Argentina have made agreements to create an investment bank for infrastructure development, as well as joint hydrocarbon exploration and development in both countries, according to Oxford Analytica. Venezuela has also purchased $3.5 billion in bonds to help pay off Argentina’s debt.

Brazil. In 2005 Brazil’s state-owned oil company Petrobras invested roughly $190 million in oil exploration and production in Venezuela, according to Petrobras’ website. PDVSA and Petrobras are also building an oil refinery in northeastern Brazil. Crude oil will be supplied by both countries to refine a projected 200,000 barrels per day.

Colombia. In 2005 Venezuela and Colombia signed an agreement to build a $335 million gas pipeline to be operational in 2007. It will supply gas from northern Colombia’s La Guajira gas fields to Venezuela’s Paraguana refining complex in western Venezuela.

Bolivia. Venezuela and Bolivia signed agreements in January and May 2006 for Venezuela to supply preferentially priced diesel and invest $1.5 billion in the Bolivian oil and gas sector in exchange for Bolivian goods and services, according to Oxford Analytica.

Ecuador. Under agreements signed in May 2006, Venezuela is expected to refine up to 100,000 barrels of Ecuadorean crude oil per day at discount prices, according to Voice of America.

Cuba. Commerce between Venezuela and Cuba will increase by 42 percent this year to about $1.7 billion, says Bloomberg news service. Venezuela is selling up to 100,000 barrels of oil per day to Cuba, discounted by as much as 40 percent.

http://www.cfr.org/publication/12089/venezuelas_oilbased_economy.html

[Pavulon]

46. A pipe from South America to China?

Missed that one. Any delivery to china involves a pacific terminal. That would require a pipe to cross colombian territory.

Since the man in red has just cut off colombia that will be a long shot.


None of that has impacted flow to the US. Even if it had the fungible nature of commodity markets offsets physical supply changes.

Agreements and promises do not refine crude.

[dipsydoodle]

62. You're missing the point.

Hugo can sell to China and they can resell it before it goes anywhere. They don't need to take delievry - they can get what they need from Iran. If the USA needs it they can pay China for it in Euros - their choice.........lol.

The main issue with Iraq was that it cost the USA a huge bundle when they switched to only taking payment in Euros under the oil for food program.

[dantyrant]

66. In fact, he's doing more than that.

To cut Wall Street out of the transactions whenever possible, he's even done some barter trades! It's creative, I'll give him that.

[Toots]

21. Must be interesting living in a fantasyland.

:shrug:

[Pavulon]

28. See WSJ and the FT

not like I just made this stuff up..

[1932]

24. Venezuela has huge aluminum reserves, and tremendous agricultural capacity

that is dormant because, since oil was discovered in the '20s, resources invested in agriculture have shrunk tremendously...by the way.

[jwirr]

37. If I were leading Venezuela I would put my money in my own

refining capability and use the oil to strengthen my own country's economy.

[1932]

43. Instead, they're diversifying the economy, and building up 'value adding' industries

which is a better idea.

[Pavulon]

48. Or Build sectors that do not rely on rotten

dinosaurs. Manufacturing, banking, medical and pharmacological, aerospace, etc.

They currently provide oil. That is it.

[aquart]

25. Do you get that international deals in the past few years bypass us?

That our neglect of the international situation has moved us to the sidelines? Countries are carefully making plans, contracts, and alliances that have NOTHING to do with us? Because we do not honor treaties. Because we start wars for no reason. Because we are lying thieves who cannot be trusted.

We are no longer necessary to the rest of the world.

[Pavulon]

29. Really, What happened in the UK during the subprime

fart. HUGE market hit. We are not at all irrelevant. Not liking the current administration is one thing. Smoking crack to the point that you believe the US market is irrelevant is a very different thing.

[Viva_La_Revolution]

38. Within 2 years, Venezuela will no longer need to sell to us if they don't want to.

Many analysts also believe that the concentration of Venezuela's oil refining capacity in the United States further hinders the reorientation of the country's oil exports away from the United States. Yet, Venezuela is involved in a myriad of new refinery projects in Asia, the Middle East and in Latin America. These new and upgraded refineries will all have the capacity to process Venezuela's crude oil. Meanwhile, Venezuela has been gradually unloading its U.S.-based oil refineries and terminating its long-standing gasoline supply contracts.
10-20-06
http://www.pinr.com/report.php?ac=view_report&report_id=572&language_id=1

[End Of The Road]

40. Wouldn't it be a hoot

If Venezuela sold some of its U.S. refineries to China?!

[Pavulon]

44. Any oil they sell to markets

not in the americas has greatly increased delivery cost and complexity

In the year since that article has been published no major (market impacting) shift in petro exports to the US have happened.

[mbperrin]

56. Not according to the Council on Foreign Relations.

http://www.cfr.org/publication/12089/venezuelas_oilbased_economy.html

* China. Venezuelan oil exports to China have gone up to 150,000 barrels per day in 2006 from the 12,300 barrels per day being delivered in 2004 and are expected to increase to 500,000 barrels per day within five years. As part of agreements signed in 2005, China is investing $2 billion in oil-related exploration and development projects in Venezuela’s Zumano region and Orinoco oil belt. China is also investing $9 billion in transportation infrastructure as well as telecom, mining, and the agricultural industry.
* Iran. Venezuela and Iran made agreements in August 2006 to build joint oil refineries in Indonesia, Syria, and Venezuela. In addition, Iran’s state-owned oil company Petropars has begun to invest in oil exploration and development in the Orinoco belt.
* India. Venezuela agreed in April 2006 to begin sending two million barrels per month to India, according to India Daily. Both countries are jointly exploring for heavy crude oil in India.

In addition, your demand analysis assumes steady demand, not growth. Since China's economy is growing at 11% and more per year and energy demands even faster, the idea that supply can simply be redirected here and there is naive. Much more energy is required and when energy is shifted away from one market, it becomes more expensive for that market to replace it. If it could be done at the same price, no shift would have occurred in the first place.

Product follows price, and others are willing to pay more for product. The US pays more indirectly, but Iran nor Venezuela receive the extra trillions we expend in military overhead to seize assets elsewhere. US companies get the money for military items, and the producers are expected to take less, not more, for their product.

It's the Mafia thing. If they steal ALL the DVD players, and sell them off the truck, the DVD factories will shut down. They have got to receive some of the revenue themselves. Taking profit from actual producers and diverting it to thieves is what a kleptocracy is all about. But as with all unsuccessful parasites, they kill their host and need to find another.

[Pavulon]

58. Micro and Macro

Growth in china and demand are better supplied a commodity based on geographic location. Russia has enormous undeveloped supply and has overland delivery. Growth does not mean equivalence.

Venezuela has a product that requires specialized refining capacity.

You lack the understanding of the scale of the us demand. 10million bpd in just refined gasoline.

12million bpd in imports per DAY.

Any "seized" assets are not online. Thus we decreased supply by invading Iraq.

The us economy will drive UP the cost of fuel in developing nations if a supply shortage occurs. People will complain but will pay $5 a gallon.

Any real study of the economy is truly amazing. The sheer size and amount of wealth generated by the US market is immense. The largest in the history of the world.

Marinating a strong economy does not directly rely on one thing. Diversity is key.

http://www.eia.doe.gov/neic/quickfacts/quickoil.html

[mbperrin]

60. Now we have something to talk about.

Geographic location is irrelevant if the price structure means that it is cheaper to do things long distance than locally. In the 1890's, it was cheaper for miners in San Francisco to put their laundry on a clipper ship and send it to China to have it done than to pay local prices. So the value of money is the determinant of commodity flow, NOT geographic proximity. This is why it matters when a currency is strong or weak, and no one, not even you, is arguing anything except that the dollar is now much weaker than it was just 7 years ago when THIS administration came to power.

Further, if American wealth is denominated in dollars, when that dollar becomes worth less, wealth is diminished. That means assets here are on sale, and real assets are swapped for pieces of paper worth less than they used to be. And when that trend continues, those dollars continue to sink.

Now when you add the interest on the national debt that we owe in large measure to others, and when you look at the dollar claims that net exporters have on us, the future of the dollar looks bleak indeed. The debt interest is just throwing more fuel on the pyre of the smoldering dollar. So take those wheelbarrows full of money, which the government SAYS is just fine, and continue letting others take REAL goods home with them, REAL resources, REAL products of labor, and see where it gets us. This country was built on production, not banking and finance speculation, and the producers own the future.

Worthless currency, foreign ownership of assets, lack of ability to spend scrip anywhere but locally, these things do not add up to wealth or prosperity. And THIS administration has created the whole mess.

[whistle]

23. The Bush/Cheney screw up, oil traded in Petro-Euros not Petro-dollars

...the implications of the will be economically devastating to all Americans as in the value of U.S. dollars going to zero.

<snip>
1000 / 1 Milliarde Mark 1923
Issuer: Reichsbankdirektion Berlin

Date: September 1923 - overprint on 1000 Mark dated 15 December 1922

Measures: 12 cm * 8 cm

Find out more about the historic background of the period in which this banknote was issued.

The front side of the note shows a German mint master: Jörg Herz - after a painting from G. Penz.

This note had never been issued as 1000 Mark. It was overprinted with 1 Billion Mark - effectively adding 6 zeros to its denomination.

Please note that 1 billion in Germany is called 1 Milliarde (1,000,000,000). In Germany 1 Billion, Trillion, etc. carries 3 more zeros than in the English world, i.e. 1 Billion (German) equals to 1000 billion (English), which is 1,000,000,000,000.

http://www.germannotes.com/1922-12-15-1000&1Mrd.shtml

[RaleighNCDUer]

32. And now, to quote the inimitable Ronald Reagan,

we start bombing in 5 minutes.

[Venus Dog]

45. Perhaps this was their scheme all along - destruction of US economy

It's Disaster Capitalism right out of a script. I always thought * was the Hudsucker Proxy - only he KNOWS it - put an idiot in as CEO, deflate the stock/economy, then buy up everything at the fire sale!! The New Deal beast will finally be totally dead and then they will privatize EVERYTHING!

[Robbien]

49. Their main concern is protection of their own society, not destruction of the US/Israel

Why should they stay with the dollar when staying with the dollar hurts them and their people in their wallets?

A movement away from something that is going to hurt you is just the smart thing to do.

[RaleighNCDUer]

68. Different 'they'.

Iran is just the tool - 'they' are the American fascists who will make billions off the ruins of the American economy, destroying the New Deal safeguards which will now be 'unaffordable'.

As plausible an explanation as any.

[featherman]

61. Clueless American media ignoring story

No mention on CNN or MSNBC websites - unbelievable how little comprehension media has of the really important stories with far reaching effects and why the American public remains so ill-informed

[dantyrant]

74. I think you're misunderstanding the media's role

When does the TV ever give you enough info to be informed?

Perhaps there's a reason American schools keep going down in testing scores, and why the TV shows get dumber, and why there's less news?

When things are unstable, the TV will try to project stability. It is an instrument of _propaganda_. ALWAYS.

[Name removed]

88. Deleted message

Message removed by moderator. Click here to review the message board rules.

[LeftishBrit]

116. No we do not!

I am British, and know plenty of people from other Europaean countries. I have NEVER come across the expression "United States of Israel", even from people who are anti-Israel, anti-America, or both.

I *have*, on the other hand, often come across people referring to the UK as 'the fifty-first state' and Blair as 'the poodle' or 'Yo Blair!' - so any British/ Europaean views tend to lie more in the direction of the USA having undue influence on British foreign policy!

I don't even think it's worth arguing with your very paranoid view of the world; but I can assure you that it does NOT represent Europaean opinion - at least, not that of the last 60 years or so.

ETA: I did google 'Who Rules America'. It gave me two types of site. One type referred to sociologist William Domhoff's book of that name, which seems like an interesting book, and does not appear to contain any of the ideas that you're proposing. The other type referred to 'National Vanguard' and other sites linked to that - I hope you are not proposing that we should look there for our information?!

[Name removed]

119. Deleted message

Message removed by moderator. Click here to review the message board rules.

[LeftishBrit]

122. And the same article (which I have now looked at, so I will need a shower)

also says HOW American media is supposedly biased by the dreadful Jewish influence:

'Despite the appearance of variety, there is no real dissent, no alternative source of facts or ideas accessible to the great mass of people that might allow them to form opinions at odds with those of the media masters. They are presented with a single view of the world—a world in which every voice proclaims the equality of the races, the inerrant nature of the Jewish "Holocaust" tale, the wickedness of attempting to halt the flood of non-White aliens pouring across our borders, the danger of permitting citizens to keep and bear arms, the moral equivalence of all sexual orientations, and the desirability of a "pluralistic," cosmopolitan society rather than a homogeneous, White one. '


Is this sort of vile racist stuff seriously considered to be recommended reading for progressives???

[Lurking Dem]

123. I hope not!

I think I need new eyeballs after looking at some of that.

[TriMetFan]

63. I'm just wondering.........

If every-one keeps on dumping the American Dollar, how long before we end up in some kind of a financial depression?

[libodem]

65. Jeez, I wonder why?

Could it be, Satan? The Great Satan, Cheney? Hmmmm?

[reprehensor]

77. Uh huh. That was their "nuke".

That's the real deal right there.

Petro-dollar warfare.

[whistle]

78. Economically this act is the kiss of death for the U.S. because

...our dollars will no longer be accepted as payment for oil in Iran and if more OPEC oil suppliers follow this lead by Iran, pretty much all of the imported oil that America will buy must be purchased with Euros. That will drive the exchange rate value of the dollar down even further than it now is

[Pavulon]

96. Sky falling, run little chickens

the us economy is THE driving force behind growth in developing nations. Poke me with a stick when the saudis VALUE the oil market in something other than the dollar. Dont like Bush, fine no one does. Bet against the US economy, well you stand to loose more than an internet discussion.

Until then they can swap cuban cigars or the future value of a blowjob for oil, the value is based in dollars.

[fascisthunter]

103. Do You Support Milton Friedman's Economics? (nt)

[Pavulon]

109. Friedman was a brilliant economist..

Some credit current chinese reform to him. It would not hurt to see his philosophy at work in some places in the world.

Economics is fascinating. Like any science there will be different interpretations of trends and behavior.

Traditional, Keynesian, and Wallerstein's formulation build and are related. Counter views to each also exits.

I do not "support" any single theory but try to understand them.

[fascisthunter]

110. His "Brilliancy" Has Turned to Mud

His theory is crippling this country by driving down wages. Only the wealthy really gain from his "theory"... just brilliant indeed.

[Pavulon]

113. You mean in China?

econoimists are just defining systems of measurements. Friedman never made policy for the US.

[fascisthunter]

114. Dodge?! I'm shocked!!!!!!!!!1111 Buh Bye (nt)

[Pavulon]

117. Good Luck, Take macro and micro at 10am

that way you will be awake. Not to early and not right after lunch.

[LeftishBrit]

118. Thatcher was a great fan of Friedman...

and did our country a lot of harm.

I admit that I have not read Friedman's work itself, and it may be that those who followed him, like Thatcher and Reagan, oversimplified and distorted his views.

As regards economics in China, not all of that is a model to imitate: e.g. child labour scandals, and lax safety regulation of products. Admittedly I don't how much of this has always been the case but was not publicized, and how much is a product of current reforms.

[Toots]

104. I doubt George Soros would agree with anything you have written and I would bet his

Net Worth is substantially larger than yours. He has been telling folks for some time to invest in foreign currency because of the falling dollar..

[Pavulon]

106. I tend not to destroy Asian markets by hedge

or invest on the opinion of individuals. Soros says lots of interesting stuff, because he can. He is not the only voice.

Buffet's traditional methods of investing are much simpler and obviously profitable.

[whistle]

107. Well, today US $100 buys 68.22 Euros and 45.25 British Pounds

...but I suppose you are correct in that we don't do near the trade with the UK and the EU as we do with the developing nations around the globe. So as long as China and India and Japan and SE Asia and Malaysia all keep accepting our U.S. dollars no matter how many the Federal Reserve keeps printing, there will be a steady flow of goods coming to the WalMarts and Target stores and other retailers in shopping malls across the country.

As for cuban cigars and foreign blow-jobs, you still have to go to the source for those and you'll need an up-to-date passport and lots more dollars then in the past :hide: :yoiks: Plus, you may be following and getting seconds after Rush Limbaugh :puke:

[Pavulon]

111. And 100 Euros

buys 146 dollars of us goods. The point is the valuation of a commodity is the primary number. What you trade for it afterwards is secondary.

[jordi_fanclub]

126. Hehehe...

Keep repeating that!

Signed: your FOREIGN owner.

[fascisthunter]

112. I Caught That Too

"cigars and blow-jobs"...

Yup, a Friedman type alright.

[Pavulon]

115. If that is all you catch

well, we all know that type.

I can dumb it down some more to see if you can wrap your brain around around the irrelevancy of Iran's policy towards a commodity.

You know, the point of the thread we are posting in?

[0007]

82. WSJ award

[tavalon]

84. Well, I guess the war with Iran over their supposed "nuclear ambitions"

will start soon. This is what America is really fighting against.

[HuffleClaw]

99. the REAL reason for the rush to war

saddam did the same iirc