Posted on 12/08/2007 3:12:12 AM PST by TigerLikesRooster
Iran drops dollar from oil deals: report
1 hour, 1 minute ago
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 dollar is an unreliable currency, considering its devaluation and the oil exporters' losses," he added.
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.
The United States has successfully encouraged major European and Asian banks to cut their dealings with Iran in a bid to make the Islamic republic give way on its controversial nuclear programme.
Washington has also blacklisted major Iranian banks for alleged support of terrorism and seeking nuclear weapons, charges denied by Tehran.
Iran has reduced its assets in dollars held in foreign banks and urged OPEC to take collective action to price oil in other currencies such as the euro, instead of the US currency which is used across the world at present.
The fall of the dollar, which has weakened considerably against the euro and other currencies in the past 12 months, has affected the revenues of OPEC members because most of them price and sell their oil exports in the US currency.
Ping!
And enemies. Lots of them too.
But dollars?
Not so many.
We'll get the last laugh.
Seems to me they have been doing so for some time now.
You and i will be long gone when Iran runs out of oil.
>>So [the] Iranian regime is basically declaring a war?<<
No, as the article explains, Iran is simply stating that it no longer chooses to accept U.S. dollars from its customers (Europeans, Americans, etc.) for the merchandise (oil) it is selling.
Seller’s prerogative. I have no problem with that.
Venezuela is also in favor of selling oil for other currencies, BTW.
More evidence the sanctions against Iran are starting to hurt. Only shadowy banks in countries like Sudan will trade in dollars with Iran, and then only at a hefty discount. Iran can’t buy/sell using dollars because they are blacklisted from participating in the world banking system due to US pressure.
Iran "declared" war in 1979.
bad judgment begets bad judgement. hoard yer euros; they’re due for a serious reality check. maybe you could use rubles instead?
Nope, we've been pushing and Iran's pushing back. And we may not win this one, if other countries use it as an excuse to abandon the dollar as the world currency. If they do, it'll be our fault for not protecting the dollar's value by protecting the American economy that underlies it.
Iran has a right to do this, but I think it is going to hurt them more than it hurts us.
You don’t mess with the money men and bankers.
This is what will get Iran bombed heavily. Damn fools.
Small people,small minds in charge over there.
As the worlds largest consumer BY FAR, any attempt to undermine America by attacking her currency will only cause a monstrous backlash as our economy tanks and hauls the rest of the world with it. A worthless dollar causes all we buy overseas to be out of reach to us as consumers. Who is to take of the slack when America quits buying from China? So China then goes into recession, her need for oil collapses as does ours and oil prices plummet on the world market causing no small amount of pain for all the producers. It is a domino effect since the worlds economic train cannot run once the engine that pulls it has been decoupled.
We are about 24% of the entire planets GDP and as such draw much jealous rhetoric from those with less, but make no mistake, only fools don’t understand how entwined the world economy is and how difficult if not impossible it is to disrupt the most major player without doing irreparable damage to their own.
Nope. Not to the US. The only country they declare war with is China, the country that holds the by far largest Dollar reserves. Since the Iranians sell huge amounts of their oil to them, the Mullahs have to explain the ChiComs why they do not want to accept greenbacks anymore. Hehe! I doubt that the Chinese are happy about the devaluation of their Dollar reserves. The good news is that if the Chinese have to pay in hard Euros or Yen for their oil, it is quite likely that the oil-price is going to sink.
Anyway it is up to the seller to fix the price. If the Iranians or Chavez and his buddies do not accept Dollars for their oil exports, it is perfectly okay with me. Such is their basic right no matter if we like them or not.
Nevertheless this is extremely dangerous for the US. 10% of the world oil reserve is in Iran. If they open a oil-bourse that is working with Euros the business could be interesting enough to other countries to do their trade there. This could trigger a chain reaction that is turning out in a complete avoidance of the Dollar among all oil exporting nations.
The deficit in the US balance of activities makes me pessimistic. Only the Asian central banks finance this deficit through buys of Dollars to avoid the up-valuation of their own currencies. Apart form some recent investments from Europe the foreign direct investments are declining. Over all the US have a huge money gap. One fine day the Asians will stop to buy Dollars and than the Greenback will have only one direction: Down.
Somehow true. Nevertheless in this case Ahmadinedschad is right in one aspect: The Dollar is just worthless green paper. I doubt that the Chinese (recession or not) will accept being your most important producer for worthless green paper in the long run. That simply does not pay out to them.
Nope--at some point the goods in America are just too cheap to buy in your own country and too expensive for Americans to buy foreign products. At that point, you'll see it spring back the other way and strongly. We saw that with the Canadian dollar just recently. The week of Thanksgiving, the USD gained 9¢ on the Canadian dollar with half coming on Black Friday alone as Canadian shoppers bought all their goods in the US. Call it the "IPOD affect." Chart here. The euro's strength is hurting Europe more than the US by a large amount. If OPEC did decide to start purchasing only in Euros, the Euro would probably run up to 2-2.5 per USD at least fleetingly and their export based economy would crumble.
Drill in the Gulf of Mexico/Anwar, etc and we can join OPEC!!!
The American economy is as strong as ever. The dropping value of the dollar on exchange markets has nothing to do with our economy (or the trade deficit or the fiscal deficit). Foreigners aren't buying dollars because our interest rates are so low.
American investments are still sound, but the return is lower than what they can get in Europe, China and the UK. All of which is resulting in a slowing of the growth in imports and a boom in exports. It's a welcome and overdue adjustment.
If you listen to the Ron-Paul-bashers, saying that is just blaming America first.
The US dollar is backed by the US military. We don't need no stinkin' gold.
Saddam learned that lesson at the end of a rope. Soon it will be Ahmadinajad's turn.
The Chinese have been buying Iranian oil with Euro's for at least a year now. What has the price of oil done in that time?
This means Japan now has to buy oil in yen or euro's instead of dollars. We will see how the markets react next week.
But the dollar is not worthless, far from it. We were in far, far worse shape in this regard in the 70’s when the peanut farmer was (trying) to run things. At that time we were so bad off that only about 27% of the worlds currency reserves were in the dollar, today that figure is about 65%. Back then Americans in France were STUCK because France REFUSED to accept the dollar as payment for goods and services.
As Hillary Clinton’s ascendancy to the WH is a wholly media created phenomenon, so to is the dollar “crises”. AS I have said before, should some catastrophic event take place you will see a mad rush to the dollar because as i said it is and will remain the currency of last resort for now and as far into the future as one would care to look.
And your point would be?
The power of the dollar is directly related to the power and might of the economy behind it ~ not to the lifestyle choices made by mad mullahs.
Not a smart move. However, it will make them feel good, watching U.S. scramble in a hurry.
Until these regimes themselves become greater risk for them.
By threatening to disrupt world finance with this move essentially without consulting world financial community, appeasing Iran becomes risker than confronting Iran.
Now Bush could get tacit approval of global business interests.
I don’t know if Iranians think though this angle. Whether it is by intention or accident, Iran is basically inviting a war.
That is why I made such a comment at the top.
They have a right to do it, but it does not mean that they won’t be attacked.
Most of the oil is still traded in Dollars of course. Falling oil prices could happen if a larger amount of the trade is being done in Euros. The problem is that too many are loosing their trust in the Dollar.
This kind of wars only make sense if they pay out with something. I doubt that a war with Iran would ever pay out in financial respect. Beside of this the US are for sure militarily the most powerful nation we can think of, but it is also sure that they are not prepared to enter a full scale infantry war with Iran in the moment. Such takes time and perfect planning. Therefore I do not believe in wars because of the Dollar.
Regards from Lake Constance, Germany.
A.B.
Besides, war does not have to be the full-scale infantry war. It will be more likely that it is a combination of full-scale airstrike and local insurgents(minorities) rising up, closer to what happened to Afghanistan.
To my knowlege there are only the Kurds who would rise up in Iran, but this would mean massive trouble with the powerful Turks. Before a war is started it might be helpful to think yourself into the situation of the enemy:
1. Iran has a fundamental problem with its airforce since the USAF would clean up the skies within a few days.
2. Iran has a motivated army with 545.000 active men and a reserve of 350.000. Plenty of armor and infantry. Their soldiers can not be compared to the Iraqis who were lucky to surrender to the US. The Iranian power is clearly located on the ground.
3. The US are based in Iraq, a country with large numbers of Shiites.
4. Airstrikes would leave no deep impressions among Iranians. They are used to it and it is impossible to win a war with airpower only. As a German I know very well what I am talking about. The allied bombing i.e. over Germany helped Hitler more than you can imagine. It pushed the will of the ordinary Germans to resist until the last.
Therefore - If I would be a Mullah I would answer any airstrike with a massive invasion of Iraq. This is the only chance for the Iranians to succeed. Such would quite likely turn out as a dangerous situation for the US troops since they are already bound to a hostile enviroment between Euphrat and Tigris. We all know that the US troops are not prepared for large scale infantry operations. Beside of this the Iranians could block the street of Hormuz. Such would do more damage to the world/US economy than any Dollar crisis.
You see - a war with Iran is dangerous since it is not only the US and its leaders that take influence on the situation.
It's just unfortunate that we have all of our products made in other countries now. For the first time ever, we depend on other countries to furnish us with all of the things that we need. THAT really bothers me.
Ain't globalism grand? < / sarcasm >
You have to factor in Arab Shiites. There have been troubles brewing in Arab Province of Iran. Persian Shiites and Arab Shiites are not the same. Just like Sunni Kurds and Sunni Arabs in Baghdad are not the same.
I am not sure Iran will attack U.S. in infantry attack. That is suicidal. U.S. airpower will annihilate them before they take on U.S. infantry.
About air attacks affecting civilian population, your remark is not on the point. U.S. attack will concentrate on military and nuclear targets. Using today's weaponry, massive carpet bombing is not necessary. So air attacks won't kill many civilians. This is not WWII.
On the other note, the last time Iranian population was subject to sustained massive bombing, they buckled and forced Khomeini to declare truce. Most in the world may believe that it was the result of U.S. Navy shooting down Iranian passenger jet by mistake. However, it was a convenient excuse. Saddam's scuds were wreaking havoc with Iranian population, making them extremely war-weary. Most cities in Western Iran were under such attacks. I think that is a more relevant fact than German's WWII experience.
Iran's main counterattack is via terrorist attacks, missiles, and blocking the Strait of Hormuz.
What U.S. wants is to destroy Iranian nuclear facilities and military installations. Once that is done, there is no massive ground invasion unless Iranians start one, but as I said, they know that is a big mistake because they will be wiped out by U.S. airpower. Don't you think invasion over open plain against U.S. is a good idea?
Well my grandfather shot down quite a few American and British bombers with his Focke-Wulf fighter after surviving the bombing raid in Dresden (he had some air victories over Anglo-American planes before). The thing is that he was not demoralized enough to give up although he was watching the death of 35.000 compatriots in one single night back then.
What I want to say is that the concept of "shock and awe" (Bomber-Harris did nothing different) does absolutely not work out with a population that is prepared to war situations. It makes the resistance even stronger.
Persian Shiites and Arab Shiites
It does not matter. All of them hate American crusaders. And I am quite sure that this hate is deeper than their own issues.
am not sure Iran will attack U.S. in infantry attack. That is suicidal.
It is nothing new that muslims are suicidal. They are prepared to deal with immense losses. It is their only chance to win the war.
In is the absolute mass of soldiers that could turn out as a problem for you Americans in Iran. To give you a example: In WWII we Germans destroyed American tanks in a 4:1 ratio. That means 4 Shermans for one Tiger. We lost the war since you Americans were simply able to throw more men and material into the Battle although we had for sure the better technology and the more experienced soldiers. I can remember old (German) soldiers who told me i.e. about the Russians who were driving young boys into the German machine guns until the munition was used up. The same thing could happen to you in Iran. You should not underestimate their abilities and their violence. They have up-to-date (AA-)stuff from the Russians and they are prepared to fight. Besides - I doubt that everything in their inventory is junk. Do you remember i.e. the recently destroyed Israeli frigate near the coast of Lebanon? That was quite a surprise.
What U.S. wants is to destroy Iranian nuclear facilities and military installations. Once that is done, there is no massive ground invasion unless Iranians start one, but as I said, they know that is a big mistake because they will be wiped out by U.S. airpower.
If Iran is controlling Iraq, the US has -execpt of Israel and your aircraft carriers- no place left were they could attack Iran from a short distance. Diego Garcia is within reach but only for large airframes. The Turks will not give their bases for this and the Saudi Arabians won't do it either. This is limiting American possibilities once Iraq is lost. Therefore it makes absolutely sense for Iran to invade Iraq. Since the relatively few American ground troops have nearly no chance against a massive Iranian attack with boots on the ground, it is the most rational thing for them to do. Even if they loose 200.000 men or more - Dictators never care. We Germans lost in Stalingrad 300.000 men, but there was no broad resistance against Hitler because of that. I doubt that this would be different in Iran.
Airpower is useless if you lack the bases. Furthermore the real impact of airpower is quite limited. You need nuclear warheads if you want to destroy deep bunkers i.e.. Beside of this is Iran a large country with many places to hide the important stuff.
I don't think there will be shock and awe over Iran. You keep bringing up the wrong issue. U.S. is not about to start WWII style total war against Iran.
It does not matter. All of them hate American crusaders. And I am quite sure that this hate is deeper than their own issues.
I don't think so. Do not underestimate the tribal rivalry. There is a long history between them before Americans came along. I am not sure you understand this well.
It is nothing new that muslims are suicidal.
U.S. have enough ammo and airplanes to destroy a large mass of Iranians and armors moving over a plain. Besides, Iranian population itself is not as fanatic as in Iran-Iraq War. There are fanatic core of regime, but general population is not up for another massive blood bath. U.S. is not Germany, which was short on materials and suffering from maintaining long supply line. U.S. at this point does not suffer from such a problem. You can ask Iran to waste half a million more poor guys on human wave attacks on foot or motocycles. They won't do it. Iran does not have many thousands of armors either.
the US has -execpt of Israel and your aircraft carriers- no place left were they could attack Iran from a short distance.
Ever heard about Herat and Bagram airbase in Afghanistan? U.S. carriers alone can hold a few hundred airplanes,and many attacks are done by cruise missiles launched from submarines and ships.
The thing is that a war involves two parties. Therefore it is not the US alone that is deciding whether there is a full scale war or not. I doubt that the Iranians accept any punishment from America. They will take revenge. I would do that if I would be Chamenei*.
* I am not. ;)
Ever heard about Herat and Bagram airbase in Afghanistan?
They are even less secure than the bases in Iraq. As far as I know NATO has maybe 25.000 men that are able to engage in combat in Afghanistan. That should not be a problem for the Iranians.
OK. You are saying Iranians will mount invasions both to Iraq and Afghanistan. And you say they can disrupt air operations out of two major airfields, one of which, Bagram, is far away from Iran-Afghan border. You are really stretching the reality. All they can do is lobbing a few mortar shells into the outer perimeter of airfields.
Well, they have roundabout 900.000 men under weapons. Although their forces might not meet western standards, they represent a effective and powerful force. Sometimes I have the impression that some Americans are drunk from their easy capture of Iraq. The thing is that the military of both countries can not be compared. The vast majority of Iranian forces consist of motivated soldiers who want to defend their country while the forces in Iraq were well aware that everything they were fighting for was against the interests of Iraq and its people. Soldiers in Iraq knew that the most patriotic thing they could do was to surrender immediately.
Things in Iran are quite different. Most Iranians (and I know a few) are absolutely convinced that it is their natural right to use nuclear energy i.e.. Furthermore usually most of them dismiss the theocracy on one side but also a intervention of foreigners (especially of Americans) on the other. They want to solve their problems alone. A American attack is something that they all would see as a necessity to defend the Iranian people and the Iranian nation with all means. Do not get me wrong. I hate (!) the mullahs and I am on the side of America. Nevertheless I am convinced that to underestimate the Iranian preparedness to stand a real fight is a fundamental fault.
Due to their availability of men and material they have numerous possibilities to intervene in their neighboring countries. Many people here in the US forget that it is America which is hated most in the ME and not Iran or some other "tribes". Arab and Persian Shiites share at least the same religion and values while both of them share practically nothing with the average American. Even the Taliban and the Mullahs have much more in common with each other than with Americans. Therefore I would say that the Iranians can lean on the help of many if not most Iraqis and Afghanis. We Germans made the experience that the combination of a potent enemy on the front and a anxious back-country where the transportation of your supplies is hampered usually turns out into a nightmare. The resistance in Poland i.e. consumed much on the replenishment that were needed on the eastern front in 1941 - 1944. The thing will be not that different in Iraq or Afghanistan. The Iranians simply have to take 100.000 men and push to the NATO bases in a combined operation with their Taliban allies. There is practically nothing that could stop them.
As a European I lack the national ecstasy of Americans about the abilities of their forces and as a former soldier I know very well that someone who is fighting in the field needs more than just a few James-Bond tricks to succeed. It is indeed true that the US have for sure the most able military of the world in the moment. Nevertheless your forces suffer from global overstretch. It is impossible for GIs to be everywhere they are needed. Therefore I think it is dangerous to start a game where the end is open. Iran is much more potent than those camel drivers in Afghanistan or those frustrated Baathists in Baghdad. Be careful!
You conveniently disregard the fact that Iranians in general is quite unhappy with the way Mullahs are running country. They want Mullahs to do more for their problem than posturing against U.S. They are not as motivated as you think. At least they won't repeat sucidal human wave attack again.
You do not seem to know that much about M.E. still you are confident to pass judgement on what might transpire. And massive Iranian infantry surge over Afghanistan and take Bagram or Herat while doing the same in Iran-Iraq border.
I hope you would command the Iranian army and mount full-scale invasion on both directions, which would make it easier for U.S. to get outright victory. All you can do is typical European style name-calling.
You don't really know much about the financial implication of Iranian dollar-play, either.
You are stuck with massive infantry invasion argument. Now you expand it in both directions. It is not I who are overestimating American capability, it is you who refuse to back out of massive infantry invasion scenario, confering Iranians on all kind of fanaticism and suicidal urges to justify your argument. Some fanatics when they buckled under Saddam's dumb missiles. You conveniently forgot to answer that angle. You don't read much about M.E. or Iran. You seem to know less about Iran-Iraq War than I do. So are politics and situations in Iraq and Iran.
You have shallow generalization of Americans and Mid-East, which you use to justify your argument. To you, Mid-East is no more than an ocean of reay-to-die fanatics and U.S. has far inferior grasp of situations than yourself. However, it turns out you know less than I do.
Being European does not automatically guarantee you with better judgement and wisdom. To me, many Europeans are living with shallow streotypes of other countries, especially Americans, while they are the intellectually lazy and dumb ones.
This is indeed true. BTW - being American also does not guarantee better judgment and wisdom. I found out that human beings in North America and Europe do not differ that much in general.
You don't read much about M.E. or Iran. You seem to know less about Iran-Iraq War than I do. So are politics and situations in Iraq and Iran.
If you think so. I have been several times in the ME (Syria, Turkey, Israel and Jordan) and I know many Iranians over university and private links. Of course that are all people with academic background and therefore they do not represent necessarily the ordinary Iranian. In difference to the US we Germans have still close economic ties to Iran. De facto we are their most important trading partner. Practically everything that makes live livable in Teheran comes from Germany. Beside of this they use Germany as their window to the west since our nation still maintain cultural and personal connections. I.e. gifted Iranians usually have the possibility to study on German universities. Therefore I would say we Germans have the privilege of at least a little bit insight into the real circumstances of contemporary Iran. Furthermore I was a active soldier in a German General Staff that was in charge with strategic planning. Of course we rather brood over the Soviets than over Iranians and I was only the apprentice back then. Therefore I am no professional in those questions, but I know that you can move something with an army of 900.000 men.
To me, many Europeans are living with shallow streotypes of other countries, especially Americans, while they are the intellectually lazy and dumb ones.
If you think so. It will be your war and not ours. We stay sitting on the fence and keep our fingers crossed for you if it is really going to happen. In Germany we have a bonmot: "The one who is ordering the beer has to pay for it" (Wer bestellt, zahlt). Sometimes is being lazy and dumb a quite intelligent strategy.
One thing - I do not understand where I confronted you with shallow stereotypes about your nation and why you react that offended. I simply said that I think that the Iranians could be quite dangerous for your troops and therefore I would avoid any confrontation if I would be in your shoes. Is such a statement already such an insult to your feelings about your nation that you have to react that sour? Do we Europeans have to shiver in humbleness if we talk about the American forces (BuHuHaHa!)?
http://www.youtube.com/watch?v=k4RYf4uy1IU
As I have said, long term your kind will go away with all your self proclaimed intellectualism.
A war with Iran would not be easy or fun. No one in their right mind wants such a thing. That said, some things are worth fighting for. I know this is difficult for a contemporary liberal or European to understand.
You’ve lived under a shield provided by our money and our fighting men for generations and you want to now lecture us on it being our war and we’ll have to go at it alone. Just hope America doesn’t take that attitude in the future when Europe is threatened again. Of course, being German, you may prefer that the US stay out of European conflicts...
“War is an ugly thing, but not the ugliest of things. The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse. The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself.”
John Stuart Mill
There is a difference between being hurt by a low dollar i.e. EADS, and a loss in trust. For the Iranians, a regime to whom few options are left, such “symbolic” gestures shows them as standing up to the US, but the dollar is perfectly healthy.
I don't think our price will fall if everyone who supports our debt has to convert those dollars to euros in order to buy oil. They will just pass it on to us. As you suggest, that is the problem with the dollar now. All of this unbacked floating currency stuff is still a fairly young experiment.
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