Iran to sell oil in euros as early as March 2005 if US does

[John S]

http://globalresearch.ca/articles/CLA410A.html

The recent rise in the value of the euro is timed to add a smooth transistion to oil sales in euros from Iraq beginning in March 2005 at the earliest or March 2006 at the latest.

Despite the American effort to destabilise the euro by invading Iraq and reinstalling the dollar as the Iraqi oil currency, the euro continues to grow in strength.

Iran's desire to establish its own oil bourse to not only compete with the American and British established oil bourses (NYMEX & IPE) but to sell oil from that bourse in euros has Iran in the hot seat as far as the US is concerned. Of course they will never admit the euro is the reason for war. They will use the excuse of nuclear weapons.

As the Americans have failed to secure stability in Iraq, a war with Iran will be more devastating to American forces as Iran is much better prepared to fight an invader then Iraq ever was.

[Olivier]

Interesting.
I just wonder where do the other producers sell their oil? Venezuela, Norway, Nigeria...

Selling in euros is not so much important since the value of a baril remains the same for the Europeans, whereas it is more and more expensive for the USA because of the devaluation of the dollar.

It's now obvious that tje strategy of the USA is to devaluate the dollar... and "steal" the growth in Europe.

[John S]

Interesting.
I just wonder where do the other producers sell their oil? Venezuela, Norway, Nigeria...

Presently, all sales go through two "exchanges". One is NYMEX (New York Mercantile Exchange) in the US and the other is IPE (International Petroleum Exchange) in London. Both use the US dollar.

Selling in euros is not so much important since the value of a baril remains the same for the Europeans, whereas it is more and more expensive for the USA because of the devaluation of the dollar.

It is more then just what individual countries pay for oil. It is where those dollars or euros end up after the sale. Presently, the dollar sales go to New York and end up in the purchase of US stocks and government treasuries. The oil sales presently support the US deficit economy through dollar hegemony. More important then who pays more or less for oil is who gets the subsidy. Both the US and the EU want the subsidy. I'm sure the EU would be happy to share it with the US or others, but the US wants it all.

It's now obvious that tje strategy of the USA is to devaluate the dollar... and "steal" the growth in Europe.

No! The US does not want a weak dollar at all. That may be what the media is attempting to portray but a weak dollar is a sign the dollar hegemony policy is failing. Very few people in the world know how dollar hegemony works or why the dollar hegemony is desired by the US. It is part of macroeconomics, whereas a weak dollar stategy works under Keynesian economics to spur exports as a part of microeconomics. But, the article below explains why the weak dollar is not and will not have any effect on increasing US exports.

http://yahoo.reuters.com/financeQuoteCo ... 162_newsml


The Americans can not admit to themselves nor to the world why they are unable to secure a strong dollar. They pretend to want a weak dollar because if they said they wanted a strong dollar but can't produce it, then they would have to explain why they can't.

The reasons they can't are twofold;

1.) In order to boost the value of the dollar they need to raise interest rates. To be effective they need to raise them more then the dollar is falling against other currencies like the euro. Because the dollar is a fiat currency and has no natural backing, like gold, its value is artificial. Its value depends on who is willing to accept dollars for payment and then use them to back their own currencies.

Other nations will hold onto dollars when they have confidence in the dollar. If they lose confidence in the dollar they sell it. The higher volume of selling means a drop in value. Raising US interest rates would attract some value back to the dollar because some investors would find that the gains in stock or bond values would not be negated by a depreciating currency if the interest rates were high enough.

Here is the dilema: Raising the rates in the US would destroy the national economy. Most Americans rely on credit to live and maintain their high living standard. At the present time, that living standard can only be maintained if interest rates are low. If the average cost of decent home in the US is say 200 000 $ it is barely affordable at 5 % interest. Raise those rates to 10 % or more and the house becomes unsellable. Credit cards and other forms of borrowing would also be affected.

So you see in respect to interest rates the US has its hands tied.

2.) Buy back the excessive dollars on the world market. But with what? They have neither goods nor foreign currency to do it with. Under dollar hegemony, they purchased hundreds of milliards of goods with only paper script. Buying back those script would be like finally having to pay for those goods with real money and they can not do it.

So, they make the world think they want the dollar to be weak. And that the weak dollar will benefit them. If that were true they would have pressed for a weak dollar all along.

Growth is one of those funny terms that US economists use to measure how much more money they can get out of a business with putting less in. Like closing down a local company and moving it to China just to save millions on labour costs and thus show higher growth. Of course the EU is suckered into this thinking and feels their economy is bad because they have minimal growth. Believe me, the US economy, if it is growing, is growing using credit. In other words spending money they don't own. The EU can not have this growth due to the stability pact which limits deficit spending. Also, they don't have yet a hegemonic currency that subsidises this growth.

Remember, even if there are grumblings about the strength of the euro coming from the EU it is only hot air meant to appease the masses who who are trapped in the microeconomic quagmire. Their leaders know that the strengthening euro will one day lead to the end of the dollar as a hegemonic currency and a return to a more normal global economy.

[Dakkus]

...strengthening euro will one day lead to the end of the dollar as a hegemonic currency and a return to a more normal global economy.

Erm.. I wouldn't call an economy without the USA as it is now "normal"..
I'm no way against USA falling, but I also understand that when that will happen it will suck all other areas with it, because all the culture and history of the western world (which somewhat includes China, BTW ;))

What's bad in the possible falling of USA is that the one taking it's place might be China instead of the EU.
And I don't feel like wanting to be lead by those people.. Even Guantanamo is nothing compared to what the Chinese do..

[John S]

...strengthening euro will one day lead to the end of the dollar as a hegemonic currency and a return to a more normal global economy.

Erm.. I wouldn't call an economy without the USA as it is now "normal"..
I'm no way against USA falling, but I also understand that when that will happen it will suck all other areas with it, because all the culture and history of the western world (which somewhat includes China, BTW )

There needs to be a greater balance in the economies of the world. Using the US dollar solely or mainly as the world's reserve currency and having the world's economy dependent on what the US says and does is definitely not normal. There needs to be a greater balance if we are to see a more stabile world economy. And I feel the end to dollar hegemony will help create that type of economy in which all of the world can prosper, not just a few.

What's bad in the possible falling of USA is that the one taking it's place might be China instead of the EU.
And I don't feel like wanting to be lead by those people.. Even Guantanamo is nothing compared to what the Chinese do..

China may have moved fast in the modern world, but they are not in a position to control the world in the way the US does. They may be a regional power but not a world power.

The EU is in its infancy and as it matures will evolve into a greater power. Whether it be a super power to rival the US or just another regional power. Ending dollar hegemony will reduce the US from a world power to a regional power, which is what it should be.

The Chinese have a way to go to divorce themselves from their totalitarian past. Their economic drive is really nothing more then to bring themselves from the mid 20-th century into the 21-st by using other people's resources (like the US) to achieve it. Once they are caught up, they won't be as "important" as they appear to be now.

As for human right abuses every one is guilty. Some however are better at covering it up then others. Know what I mean?

[Skylimit]

But, the article below explains why the weak dollar is not and will not have any effect on increasing US exports.

http://yahoo.reuters.com/financeQuoteCo ... 162_newsml


The Americans can not admit to themselves nor to the world why they are unable to secure a strong dollar.

If find your theory interesting, it has been lying in the back of my head since you first posted it, that was before Iraq was invaded. And yes, I read financial newspapers and read that Iraqi oil was sold in $ again shortly after the invasion.

But if the story is true, then the US must maintain a strong $, and that is not happening. You say they want it strong, and fail, but I do not see them take any action to back the dollar. Just let it slide.

The weak dollar is starting to hurt the EU exporting countries. If not an advantage for the US, then certainly it is a problem for EU. (which is also good )

That is why I was interested in reading the link above, but the article has vanished meanwhile ... do you still have it ?

[Olivier]

1.) In order to boost the value of the dollar they need to raise interest rates.
(...)
Here is the dilema: Raising the rates in the US would destroy the national economy. Most Americans rely on credit to live and maintain their high living standard. At the present time, that living standard can only be maintained if interest rates are low. If the average cost of decent home in the US is say 200 000 $ it is barely affordable at 5 % interest. Raise those rates to 10 % or more and the house becomes unsellable. Credit cards and other forms of borrowing would also be affected.

This is what the Fed has been doing these last weeks. The interest rates raised... So, is the "strong $" policy back on the agenda, according to you?

[Olivier]

Even Guantanamo is nothing compared to what the Chinese do..

I regret that the USA can now be compared to China, Russia, Iran... for its lack of respect for the Human Right.

The USA pretend to be the leader of the free world, the country which fights for the human rights (China does not)... and keeps illegaly people in Guatanamo, tortures others in Abu Graib, keeps its population in fear and ignorance of the rest of the world.

What happened to this country?

[Fonzie]

Selling in euros is not so much important since the value of a baril remains the same for the Europeans.

It is.. Most companies rely a lot on oil and oil products. If their reserves are in dollars, the variable exchange rates will influence the price they have to pay for oil too much... so they are forced to trade in euro's as well, making the euro a stronger currency

[Aaron]

The USA pretend to be the leader of the free world, the country which fights for the human rights (China does not)... and keeps illegaly people in Guatanamo, tortures others in Abu Graib, keeps its population in fear and ignorance of the rest of the world.

What happened to this country?

I would say one big reason is administrative destruction of USA. Too many instances have "friends" in the senate and House of Representatives. These senators and representatives are taking care of interests of companies which make weapons and other military products and different religious and ethnic groups. If you want to get to the congress, you need support of these groups. To get there again for the following period, you must have shown you are benefittal to them. This has paralysed the American decision-making. It is impossible to make painful decisions. Mentioning about decreasing of the middle class standard of living would definitely be a political suicide.

These instances do not have as much to loose as the average Americans have; even if USA would collapse economically, the companies could always pack their suitcases and go to Singapore; religious groups would still have an excessive amount of freak members and the ethnic groups would survive as well. They would be totally fine even if one day one euro would equal one kilo of dollars.

Yes, the economical situation of USA is more serious than most of us can imagine.

[John S]

This is what the Fed has been doing these last weeks. The interest rates raised... So, is the "strong $" policy back on the agenda, according to you?

I don't think there is any "strong dollar" "weak dollar" talk coming out of Washington. A weak dollar does not benefit the US as it doesn't export. A weak dollar makes imports more expensive. Even oil which is denominated in dollars rises when the dollar is weak to compensate. A weak dollar makes it harder to finance American deficits. Itis important to the US that its deficits are financed, so it pushes for a stronger dollar. The other Asian countries want the US to buy their products so they now sell euros for dollars to make their goods cheaper in the US. They also need European products and don't want to pay more for them with their lower value dollar reserves.

I'd say for right now dollar-euro war will go back and forth until Iran starts its bourse operating in march 2006.