Thanks for the link Seekerof. I was not aware of the book. I encourage members to read the extracts on that site. As for the opinions of the commenter
you cited I have a couple of points to raise.
The problem is that the Iranians donâ€™t have the ability to do it.
First, they donâ€™t produce enough oil to make any difference. Second, the so-called bourse is meaningless because they donâ€™t produce enough oil to
even guarantee delivery of the underlying contracts outstanding.
The people talking about this are people that donâ€™t understand exchanges.
Oil is currently priced on the NYMEX [New York Mercantile Exchange] and IPE [Londonâ€™s International Petroleum Exchange]. Both of these countries are
of oil! The argument that a country needs to produce the oil it sells on it's exchange does not hold water and shows a high
level of ignorance on the part of this commenter accusing others of the same.
They have no collateral agreement with either the NYMEX or Brent or London oil markets. Without corresponding securities agreements, which they are
precluded from having under existing embargoes. It doesnâ€™t give them the ability to make good on the contract outside of their own country.
That's an interesting argument, but a red herring IMO. They only need to have agreements with enough producing countries to deliver the oil to the
buyers. Iran and Venezuela are two major producers and both are members of OPEC so the supply side may be covered.
As for buyers, Europe buys more oil from OPEC than the US. It only makes sense for them to use their own currency and avoid daily fluctuations in
exchange rates. edit: and remember Britain is not part of the Euro, so we are talking "Old Europe" here (I'm sure they've totally forgotten
about that one eh?)
The availability of a Euro based bourse is enough for countries to diversify their foreign reserve holdings. That will automatically depress the value
of the dollar and increase the value of the Euro (relative to each other at least).
But this is only headline value for the unwashed.
Yeah I'm really tired of the great masses talking about the Iranian Oil bourse everywhere I go.
In the last analysis, however, the formation of an Iranian oil bourse, as theyâ€™re calling it, is meaningless.
It's far from meaningless IMO. Ever wonder why the US can keep printing money, running deficits and carry an 8 trillion dollar debt? It's the
I'm not saying the world will come to an end, just that the establishment of this bourse will destabilize the petrodollar economy on which the US
relies for it's financial health, and that may be enough to eventually cause a financial crisis of worldwide proportions. Time will tell.
It's planned implementation is also enough for Iran to be targeted by the powers that be. Assuming Europe can keep it together and that the bourse
goes live, it may even cause a split in OPEC with Saudi Arabia siding with the US to keep oil trading in dollars and Iran and Venezuela siding with
Interesting times ahead at the very least.
[edit on 12/18/2005 by Gools]