Justin
9/11 Truth Organiser
Joined: 27 Jul 2005
Posts: 500
Location: Cumbria / Yorkshire Dales
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 Posted: Tue Feb 28, 2006 2:35 pm Post subject: In today's Tehran Times |
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This appeared today in the online version of the government controlled Tehran Times:
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February 28, 2006
Will Iran’s oil kill the U.S. dollar?
Speculations have begun regarding whether the proposed March 2006 launch of the Iranian oil bourse (IOB), will become the catalyst for a significant blow to the position of the U.S. dollar?
Iran is about to begin pricing its oil in euros. Unfortunately, just about everyone would benefit -- except the United States -- without some form of U.S. intervention, the euro is going to establish a firm foothold in the international oil trade.
The U.S. dollar has been the strongest currency of the world for more than half a century, with about 70% of all currency reserves in American dollars.
This could be a logical explanation for why the Islamic republic would be the U.S.’s next target.
This is closely related to the fact that oil, the most important commodity traded in the world, is mostly priced in U.S. dollars. The majority of countries that are oil importers have to buy their oil in U.S. dollars, which forces them to keep most of their foreign currency in dollars.
The crippling U.S. debt crisis makes its fragile economy mostly dependent on the high demand for its currency in order to remain afloat.
There is a move underway by Iran, the world’s second-largest producer of crude oil, that threatens the current dominant position of the American dollar.
Tehran has lately confirmed its plan to create a euro-based exchange in oil — to compete with the London and New York dollar-denominated oil exchanges, both American-owned.
If proved successful, the Iranian oil bourse (IOB) is expected to give the euro a foothold in the international oil trade, solidifying its status as an alternative oil transaction currency. This would eventually lead to a major currency flight from the dollar to the euro — and a disaster for America.
The IOB will see crude oil, petrochemicals and other commodities of the same kind traded in euros. But the question here is what are Iran’s motives behind such a move?
According to economists, Iran’s move does make sense, especially since the European Union is Iran’s biggest trading partner. Also it will deal a major blow to Iran’s archfoe America, and, by hoping to make Iran the main hub for oil deals in the region; it will drive the Islamic Republic forward in its quest for regional supremacy.
George Perkovich, an Iran expert at the Carnegie Endowment for International Peace in Washington, has made it clear that the move is: “part of a very intelligent, creative Iranian strategy — to go on the offense in every way possible and mobilize other actors against the U.S.” (Christian Science Monitor, August 30).
This economic move could be the best and most effective strike against a mighty military foe, the United States. According to a report published recently by Asia Times, “Oil in euros would benefit millions … in the EU and its trading partners …. And it would loosen the grip the U.S. has on OPEC members”.
“One of the Federal Reserve’s nightmares may begin to unfold in the spring of 2006,” one expert on the subject stated, “when it appears that international buyers will have a choice of buying a barrel of oil for $60 on the NYMEX [New York Mercantile Exchange] and IPE [London’s International Petroleum Exchange] or purchase a barrel of oil for €45 to €50 via the Iranian bourse” (Global Politician, September 2).
The IOB will accelerate the already-existent global trend of shifting foreign currency reserves from dollars to euros would. Thus, “countries switching to euro reserves from dollar reserves would bring down the value of the U.S. currency. Imports would start to cost Americans a lot more …. As countries and businesses converted their dollar assets into euro assets, the U.S. property and stock market bubbles would, without doubt, burst” (The Foundation for the Economics of Sustainability, Nov. 15, 2004).
The impact of a reserve currency switch would be catastrophic for the U.S., according to the Global Politician. The U.S. “would simply have to stop importing” (op. cit.). If Iran launched its IOB, the U.S. dollar will weaken and the euro strengthen — helping speed up the economic decline of the U.S. Numerous economists have expressed optimism about Iran’s ambitions, saying that the impact of the Iran oil bourse on the American dollar and U.S. economy could be worse than Iran launching a “direct nuclear attack.”
(Source: Aljazeera.com)
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