The Proposed Iranian Oil Bourse (Guess who wants to kill the US dollar)

Gold Eagle ^ | 20 January, 2006 | Krassimir Petrov

[Travis McGee]

"But besides insane suicidal fanatics, nobody is really chomping at the bit to go from dollars to euros."

All it takes is one well-placed fanatic in charge of a movement of obedient fanatics to throw the world into turmoil.

Remember an Austrian corporal with a funny mustache?

[TEEHEE]

What happens when we can no longer play "banker" and print all of the thin-air money we want?

We'll just have to fall back on our charm, wit, and roguish good looks. Should be just as solid as printing the world's reserve currency.

[Former Proud Canadian]

Good points.

[Former Proud Canadian]

What do you make of this?

TEHRAN, Iran Jan 20, 2006 — A defiant Iran announced Friday it has begun pulling its foreign currency accounts out of European banks to protect its assets from possible U.N. sanctions over its nuclear program.

As analysts estimated the amount of those funds at up to $50 billion, Iran also called for a reduction in OPEC oil production raising the possibility that the country would use oil in its standoff with the West. Iran pumps about 4 million barrels of oil a day, making it the second largest producer in OPEC after Saudi Arabia.

Underlining his challenging stance, Iran's hard-line president, Mahmoud Ahmadinejad, held a meeting in Damascus, Syria, on Friday with leaders from the Palestinian militant groups Hamas and Islamic Jihad.

The two governments expressed support for Iran's right to the peaceful exploitation of nuclear power and criticized what they called the "selective and double-standard policy practiced by some international powers in this regard." The remark was a reference to U.S. and European opposition to Iran's enrichment of uranium, a process that can produce material for atomic bombs.

The meeting came a day after an Islamic Jihad suicide bomber blew himself up in a Tel Aviv restaurant, wounding 20 people. Israel accused Iran and Syria of being behind the attack, a charge both countries denied.

The currency withdrawal signaled that Iran was willing to weather U.N. punishment rather than abandon its nuclear ambitions, which the United States and some in Europe say are to develop atomic weapons. Tehran insists its program is for peaceful purposes only.

Friday's move also deprives Europe of an important lever to influence Iran and could weaken its resolve to push Iran to give up key parts of its nuclear program, analysts said.

Crude oil prices rose above $67 Friday amid concern over the Iranian nuclear dispute, unrest in Nigeria and al-Qaida's threat of terrorist attacks in the United States.

Analysts fear that oil prices could surge much higher even beyond $100 a barrel if the U.N. Security Council imposes trade sanctions on Iran over its nuclear activities.

[Travis McGee]

We're Americans! Living in luxury is our birthright. I'm sure that the Chinese and Indians will be glad to support us in our accustomed style.

[Lucky Dog]

What do you make of this?

TEHRAN, Iran Jan 20, 2006 — A defiant Iran announced Friday it has begun pulling its foreign currency accounts out of European banks [emphasis mine] to protect its assets from possible U.N. sanctions over its nuclear program.

snip

Friday's move also deprives Europe of an important lever to influence Iran and could weaken its resolve to push Iran to give up key parts of its nuclear program, analysts said.

snip

Analysts fear that oil prices could surge much higher even beyond $100 [emphasis mine] a barrel if the U.N. Security Council imposes trade sanctions on Iran over its nuclear activities.

Sorry to take so long in replying… was out taking care of business… have to finance my internet hobby somehow.

My take on the article you outlined in your reply is indicated by the excerpted text above, especially the bold print. First, in relation to the original article of this post, note that Iran is pulling assets out of European banks, not necessarily out of “dollars.” Second, note that in the article oil is priced in dollars, indicating that oil and dollars are still inextricable.

In my final observation, let me expound a bit. Remember in my earlier post that I cited “economic historians” and their penchant for attributing the sources of all wars primarily to economic reasons. Iran’s actions in this case seem to contradict these “economic postulates” at least in the short term.

One could conceivably argue that Iran is willing to endure short term economic detriments for a longer term economic benefit (getting rid of the “petro-dollar” standard). However, this line of reasoning seems to be too much of stretch to me. For such to be the case, the Iranian leaders would have be extremely confident in their economic prescience about economic benefits accruing to them as a result of their actions and that detriments would be relatively easy for them to bear nationally. Both suppositions are extremely risky and thus highly unlikely.

In my analysis, Iran’s actions in this case are not economically motivated as “economic historians” are wont to postulate. Rather, Iran’s actions seem to be more motivated by extreme religious zealotry and a misplaced nationalistic pride.

[Froufrou]

Following your bread crumb trail ping.

This is maybe the single most telling article I’ve read. Enlightening, to say the least. Please tell me, if there’s more.

[RinaseaofDs]

Some countries are debating internally about how to unwind themselves from the Euro as we speak.

France and Germany are punishing smaller countries for violating debt/GDP ratios, when at the same time France and Germany are violating them too.

[dennisw]

The Proposed Iranian Oil Bourse ........

This still has not come to pass

Here is a good free hard asset newsletter
http://www.moneyandmarkets.com/
http://www.emailpreferencecenter.com/epcLogin.asp

[Froufrou]

Aug. 15, 1971 - He claims that’s the day we taxed the rest of the world.

The Bourse may not have happened, but all the earmarks of strategy have, particularly where China and Russia are involved. I don’t get the Japan thing though; I thought their yen was pretty soft, too.