Great explanation, which makes what can happen clearly understandable. Except to those who simply say "baloney" when they cannot fathom the reality of matters.
here comes another one 'against'
this time from the euro-perspective.
The money market has a psychological dimension also.
I think that as long as the big players like the UAE don't switch to euro there's no threat for the greenback.
If it was only Iran trading in Euros instead of Dollars the ammount of Dollars that are not bought was just not high enough to rock this very heavy boat. Federal reserve has some space to manouver interest rates upward and other players like UAE largely invested in the US share the vital desire to keep the greenback stable.
The danger lies in the scenario that Iran started a domino effect... for example if i.e. russia traded their gas in euros that would be a different story. Your trade gap would fall like a stone on you. (can you explain why this did not happen until now ? I can't but with the reason that russia needs a stabile USA as we all do)
Buyers of Iranian oil and gas still can switch to other sources on the long term. Having a stabile source of oil is a vital interest for most countries anyhow - so ahmedinedjad is burning his capital on the long term with his fire talking.
It's all about stability I figure.