Posted on 02/25/2006 1:55:39 AM PST by albyjimc2
I was hoping someone with a firm grasp on economics could help me with a lack of knowledge on the subject of selling oil in dollars to euros. Is this certain to happen and what would the reason be? Any help would be greatly appreciated. Thanks.
france I assume
they are how they are... love them or nuke them.
they are 'le grand nation' and second to none by all own definitions - certainly the title 'champions of the world' is claimed by another proud nation doing buisness around the world... Austria ;-)
But seriously - they are not Anti American - the people are not even nationalistic unlike the state. They sure got their problems with george. But they certainly have by far more serious problems with ahmedinedjad - by orders of magnitude.
mash here..http://www.energybulletin.net/7707.html
>>Let me see, there is how many trillions of dollars floating around the globe?
That will be a difficult question to answer after March 23.
http://www.google.com/search?hl=en&lr=&safe=off&q=Fed+M3+March+23+2006
The United Nations Sanctions Committee approves an Iraqi request to be paid in Euros, rather than United States dollars, for oil exported under the "oil for food" program, which is part of the sanctions regime stemming from Iraq's 1990 invasion of Kuwait.
SUre. It cut down one step for the payola going out to the ministers in France, Germany, and Russia, and reduced the paper trail for the bribes.
IIRC, though, Saddam had tons of gold and a considerable stash of currency in large metal boxes--in dollars.
Wow, I had not heard this before, thanks for pointing it out. I have my suspicions as to why this is happening, but I would like to hear your ideas first. thanks.
From that link:
"
Because crude oil contracts are currently traded in dollars, and the prices of OPEC crudes are determined by using complex formulas derived from marker crudes, such as Brent and WTI, there is not much the Organization can do unilaterally until, and unless, there is a switch of denomination in these markets. OPEC has no control over the quotations of these marker crudes, whereas, in the past the Organization did set the official selling prices. That has all changed with the introduction of market-related prices which saw the system change from a sellers to a buyers market, or at least where market forces now dictate prices. Moreover, the entire infrastructure of the oil market has been based around the dollar, and that will be hard to displace. However, as previously mentioned, a lot depends on Britain and Norway in determining what their level of EU integration will be, and whether their marker crude, Brent, could be traded in euros."
Since the original post and my answer, we have had the Dubai Ports debacle, and word today is that Dubai is going to divest itself of Dollars (if you can't invest them in the US, why have them?). This could lead to a trend among Gulf States.
But for a long time to come, contracts on the NYMEX and the London IPE will dwarf those of any Iranian bourse, meaning complicated FOREX calculations for anyone wanting to trade on both (hedging, arbitrage, futures, etc).
In addition, the Chinese Yuan is pegged to the dollar and India is a very large trading partner of the US. Niether will want to see a collapse of the dollar and would be hesitant to switch.
Don't forget that stock-exchanges of any kind have to have laws, rules, and a judicial system to back them up (who are you going to go to in Tehran if someone renegs on a contract? What kind of justice are you going to get?).
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