It's not the threat of nuclear weapons development. We will be going to war for the undermining of our currency. After our invasion of Iraq, who had started trading oil in euros in 2000 trading of oil is going to be in dollars. There's a lot of under-reported information about this situation.
Also, Putin is trading Russian oil in rubles rather than dollars or euros.
In my opinion, Iran is going to have to go back to trading oil in dollars if they don't want to be invaded.
Can I invest my 401k into euros? Although the Chinese yuan looks good...
http://baltimorechronicle.com/2007/031007RUIJTER.shtmlThe world’s oil and gas is traded in U.S. dollars. Since 1971, the U.S. has enjoyed the advantage of being the petrodollar supplier to the world. Supplying dollars to foreign countries means the U.S. can print money and purchase goods, services and investments with it. Since the foreigners need these dollars to buy oil, and keep them also in use in the international trade outside the U.S., the U.S. has never had to deliver anything in return. Merely supplying money means free shopping. This is how U.S. foreign debt grew to $3,200,000,000,000 today. If at some point the world starts selling the trillions of dollars the other nations currently hold, the exchange markets would be flooded with dollars, and, as a result, the value of the dollar would drop to next to nothing. It would trigger a financial crisis, but if the dollar becomes worth next to nothing, it means the foreign debt would vanish. So it is very advantageous to deliver currencies that are permanently needed and wanted abroad. And that is the case as long as the world needs dollars to buy oil and gas.
But with today’s skyrocketing debt, the dollar has become vulnerable. When Saddam Hussein switched to the euro on November 6, 2000<11, 12>, the exchange markets were temporarily flooded with dollars. With Iran considering a similar switch since 1999 and maybe more OPEC countries to follow<13>, speculations and decreasing trust had set in motion a long descent of the dollar<13a>, which could lead to its collapse.<14> By the end of 2002 the dollar rate had fallen 18 percent.<15> This probably explains why the US could not wait and, on March 20, 2003, it even overruled the UN Security Council and invaded Iraq. The Iraqi oil trade has been switched back to dollars since June 6, 2003.<16> In Spring of 2003, Iran switched to the euro, and during the two years that followed the dollar exchange rate lost another 12 percent.
The U.S. free shopping advantage only works for as long as foreign countries need additional dollars. Each time oil prices rise on the U.S.-controlled International Petroleum Exchange (IPE) of London and New York Mercantile Exchange (NYMEX), more dollars are needed in the world.<17> As 85 percent of the oil trade takes place outside the U.S., for each extra dollar needed inside the U.S., seven dollars are needed outside, which results in free shopping.
The only remaining way to obtain enough new credit is to increase the world’s demand for dollars by making the oil prices rise on IPE and NYMEX. And that is what has been happening since mid-2004.
To increase the foreign dollar demand still further, the U.S. Federal Reserve sells Treasury Bonds to foreigners, which reduces the amount of dollars abroad. This increases foreign demand for dollars and raises the exchange rate. To stop the exchange rate from rising continually, new dollars have to be “delivered” to the foreigners, resulting again in free shopping. If the U.S. wants to lower the dollar rate, it can just import more. In fact, as long as world demand for dollars keeps growing, the U.S. can decide itself about the rate of their currency and enjoy free shopping. For the year 2004, the latter represented an advantage of $2,167 per U.S. inhabitant. Recently, foreigners have been less willing to fuel the U.S. fairy credit carrousel. The U.S. tries to seduce them with higher interest, but foreign demand for bonds remains insufficient. The only remaining way to obtain enough new credit is to increase the world’s demand for dollars by making the oil prices rise on IPE and NYMEX. And that is what has been happening since mid-2004.
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