Iran Oil Bourse, I say Bring it on!

Originally posted by darksided
That would then lead to a panic selling of dollars on world foreign-exchange markets and collapse the role of the dollar as the reserve currency.

Currently Oil can only be bought in US dollars. Oil is the largest traded commodity in the world. But it’s not the only commodity that is priced in US dollar. US dominance is largely dependent on the strength of the US dollar, the military backs this up throughout the world.

First, it should be noted the reason the US dollar is considered the PetroDollar is because the US agreed to assume the debt by recycling dollars into the London and New York banks for currency exchange

Assume what debt? I’m not clear what you’re referring too. (Which debt is created? Could you be more specific?)

That process of recycling is where the term "Petrodollar" came from. In order for oil to trade in Euros, the Euro would have to be printed in great quantity for the exchange.

Why would the ECB object to this? Are you saying they don’t want a world demand for the Euros?

That is because the size of the publicly traded EU government-bond market is still tiny in comparison with the huge US Treasury market.

US has dominated the World since the end of World War 2, so it would have increased its currency market durring this time. Rome had more money in circulation in its time too.

The reason the ECB, or even the EU, can't currently print Euro's to the levels required to support an oil bourse is because the Euro isn't backed by anything.

There will be a period of adjustment, but in the end its not good for the US. Since Nixon the US Dollar isn’t backed by anything either.

the world because it is backed by the F-16 standard, not the gold standard, and the F-16 standard is secured with strategic relationships with Saudi Arabia and several other OPEC nations.

If you mean the military by “F-16 standard” you might be confusing cause and effect. As I see it we are reaching Global Peak Oil, The US is securing the last great reserves in the middle East to keep the status quo as long as possible. US dollar dominance feeds the military, therefore it protects it. (not the other way around)

These strategic relationships would have to be voided in order for OPEC to adopt a Euro standard for an oil bourse.

This is largely secret; do you have anything on this?

The U.S. sought to protect its dollar strength and hegemony by ensuring that Saudi Arabia price its oil only in dollars. To achieve this, the U.S. made a deal, some say a secret one, that it would protect the Saudi regime in exchange for their selling oil only in dollars.
Source. www.thirdworldtraveler.com...

When the dollar became the reserve currency for oil in the 80s, the dollar lost value as money was printed like crazy to compensate.

Cause and effect see - en.wikipedia.org...

If Europe had to print massive sums of money, this would likely lead to a severe devalue of the Euro as a currency in relation to other world currencys.

This would only happen if the ECB printed too much euros. If they print less then the price of the Euro would rise in relation to other world currency.

One problem though, that means those banks would be putting all their chips in with Europe instead of the United States,

maybe they want more choices. Do you know why major airlines company buys airplanes alternatively from Boeing and Airbus? Simple cause they know if they start buying from only one of them the price of individual airplane will rise. Can we apply this to US vs. Euro?

which means now Europe must back their currency or assume the risk.

The Euro is a FIAT currency just like the US dollar. Backed by nothing! (SSDP)

In 2005, the United States backed the dollar as the worlds reserve currency to the tune of a military budget of $663 billion dollars.

Much to secure the last remaining reserves and to protect the US dollar hegemony..

BTW, you might want to bring this up with the big boys:
Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse

Originally posted by Simon666

Originally posted by El Tiante
Additionally, America has 3x the growth, higher per capita GDP, a more productive work force and lower debt burden than the eu.

The Eu has a very slightly higher GDP (CIA factbook data), but do you have any debt figures? I'd be interested.

America has a lower debt burden, 3x the growth and half the unemployment. Additionally, the eu per capita GDP is around $29K vs. 44K for America. By any commonly accepted measure of economic performance and health, America is burying the eu.

It’s a fact euros, deal with it.


[edit on 18-5-2006 by El Tiante]

[edit on 18-5-2006 by El Tiante]

[edit on 18-5-2006 by El Tiante]

Here's the latest.

www.upi.com...

Actually I work in a building with Oil Prospectors, (Mediterranean Resources) and I happened to overhear a conversation they were having about this very topic, One person said that they had a financial advisor friend who advised to liquidate US assets and invest in Europe and the Far East. He said matter of factly that in a recent board meeting the subject had come up and it was a very dark subject and did not look good for the US economy, They were presented with facts showing the global decline of US assets and reserve currency, There have been a lot of market jitters this week as the Dow Jones took a dive, as did the rest of the markets, The problem is, is that even though the European Markets are reliant apon the US, This is offset by the potential growth provided by countries demanding only Euros for oil.

So Ahmedinejad wants to both demand Oil in Euros and set up an Oil Bourse traded in Euros, Chavez is contemplating the sale of oil in Euros as well as joining the Oil Bourse.

The general gist of the meeting *above* was of damage limitation, finding resources closer to home, Tapping the Gulf Oil and securing enough output for the next 10-25 years.

People dont typically do this unless there is a direct threat of impending ripples regarding the Iranian Oil scheme.

So you may say Bring on the Oil Bourse, but I dont think you realise the implications.

JC

Interesting message JC, have you read this?

www.energybulletin.net...

I'd like to hear your opinion about it.

Edit: Site currently doesn't work.

Interesting links:

bellaciao.org...

Point #3 Bank Of America and Compass Bank managers (probably all other U.S. banks too) have been instructing their employees in the last few weeks on how to respond to customer demands in the event of a collapse of the U.S. economy - specifically telling the employees that only agents from the Department Of Homeland Security will have authority to decide what belongings customers may have from their safe deposit boxes - and that precious metals and other valuables will not be released to U.S. citizens. The bank employees have been strictly prohibited from revealing the banks’ new "guidelines" to anyone. (however, employees have been talking to friends and family)

and:

www.teamliberty.net...

If these countries drop the dollar in favor of the euro and support the demise of the U.S. dollar as the international currency for global oil purchasing, America’s debt will end in default, the trade deficit will likely double, and the dollars that we carry in our wallets will be worth less, much less then they are right now. In the simplest terms, everything will appear to cost more because the dollar will be worth less.



In theory, the price of goods and services do not go up. It is actually the value of the dollar going down that causes economic insecurity and inflated prices at the cash register. Once the American people understand this important lesson regarding fiat money, change will be demanded in Washington DC.

[edit on 20-5-2006 by Mdv2]

Originally posted by Oilbourse2006
Actually I work in a building with Oil Prospectors, (Mediterranean Resources) and I happened to overhear a conversation they were having about this very topic, One person said that they had a financial advisor friend who advised to liquidate US assets and invest in Europe and the Far East. JC

Well you friend should consider another profession because he's pretty clueless.

The DOW & the S&P finished UP for the week, despite a 2% drop earlier in the week due to a higher than expected CPI number this week, fueling inflation fears. However the people who make a living investing in America saw the drop as a buying opportunity.

Gold suffered it's biggest weekly drop in TWENTY YEARS this week.

Gold and metals fell sharply again Monday, with a slide in crude oil prices and a bounce in the dollar helping continue Friday's drop from stratospheric heights.
Gold for June delivery was recently losing $20.80 to $691 an ounce. The precious metal started declining on Friday after reaching $732, a level unseen since September 1980. It's now down 5.6% from that height.
Silver for July delivery was recently down 85 cents to $13.38 an ounce, after reaching a 25-year high at $14.93 last week. As for copper, the July contract was down 10.4 cents to $3.76 a pound, after last week touching a new all-time high at $4.04.
With most metals having advanced sharply -- without any meaningful pull-back -- since the start of the year, many analysts have warned of a pending correction.
"Certainly the gold market was overbought technically, after the recent run to 26-year highs, and therefore at least a portion of the setback this morning should be considered technical in nature," writes Nell Sloane, metals analyst at NSFutures.com.

An early trigger of metals weakness on Monday was a rebound in the dollar after news that foreign investors had bought enough U.S. stocks and bonds in March to cover the soaring current account deficit.
In addition, the Bank of Japan, concerned that a stronger yen might derail Japan's economic recovery, hinted that it might postpone plans to raise interest rates.

www.thestreet.com...

Actually Up is relative, Up and down are only based on the previous days trading level. For example, You could lose 1000 points and be up 1 point, you still finish on an up, the point is is that 1 point doesnt make a whole bunch of difference, The Feds are probably going to raise interest rates again soon which is affecting fears of inflation, Gold was as you said as high as 730+ dollars per ounce, this was at a level not seen since 1980

"Gold for June delivery was recently losing $20.80 to $691 an ounce. The precious metal started declining on Friday after reaching $732, a level unseen since September 1980. It's now down 5.6% from that height."

even if Gold is down it doesnt matter as it is so freaking high anyway, People invest in Gold as a way to protect assets, eg, so if we are paying $3 a gallon and the price goes down by say 18 cents = 6% we should say ah the worst is over and count it a good week? The price of Oil is high and will stay high, Gold will continue to rise, especially WHEN not IF Iran refuses the latest resolution.

Look at the Exchange rate of USD to GBP = 1GBP = 1.87 USD, When I came to the states 3 years ago from England, I would have loved to have had that exchange rate, instead I had 1 GBP = 1.63 USD.


Syria is changing to the Euro for Oil sales,
Iran is changing to the Euro for Oil Sales.
Iran is starting an Oil Exchange traded in Euros.
Russia says the US dollar is not stable and is slashing its USD reserves.

I am not saying that the end of the USD is imminent, But regardless of a financial advisor advising against US investment, the company was still going through damage limitation procedings for a USD shift.



In response to Mdv2

This is just further evidence of companies preparing for a worst case scenario and should not be treated lightly.

JC

Originally posted by El Tiante


El Tiante, I'd recommend to stop using the CIA factbook, they aren't even able to properly do their intelligence duties, let alone financial analysises.


America has a lower debt burden

US spends its way to 28 Eiffel towers: made out of pure gold

US DEBT CLOCK

Debt to GDP ratio EU 25 - 2005:
63.4%
US:
64.3%

Foot note: There are three countries causing the EU's enormous debt ratio, Greece, Italy and Portugal. If necessary, they could possibly be kicked out. Furthermore, some new (and poor) states joined, which increases the overall debt ratio as well.

US DEBT/percent of GDP

Originally posted by El Tiante
3x the growth and half the unemployment.

GDP Growth Q1 2006:
EU:.6% Increase
US: 1.2% increase

EU-US GDP growth Q1 2006


Unemployment:
End 2005:
EU: 8.9
US: 5.2

March 2006 rate
EU: 8.1%
US: 4.7%

Decrease EU: -.7%
Decrease US: -.5%

USATODAY
EU BUSINESS







[edit on 20-5-2006 by Mdv2]

El Tiante doesn't have the capability of arguing anything requiring understanding the markets or economics. He's able to post snapshots and things that show what happens today, but he's completely out of his element to try and understand where things might go in the future. It's just not something he can get his mind around. I don't think he has any education or financial background.

If it's more complicated than Europe=bad, America=invincible, you've lost him.

Originally posted by Oilbourse2006

Syria is changing to the Euro for Oil sales,
Iran is changing to the Euro for Oil Sales.
Iran is starting an Oil Exchange traded in Euros.
Russia says the US dollar is not stable and is slashing its USD reserves.

I think the US government should rather be worried about the major foreign treasury debt holders, such as China, Japan, and the Oil exporting countries.

They basically keep the US economy running, what if they start losing confidence in the US economy/increasing deficit. Without the debt holders the value of USD would collapse in no-time. China has already begun cutting its US debt holdings.


Major US Debt holders table:
img361.imageshack.us...



[edit on 20-5-2006 by Mdv2]

In addition, economic power might even be the best power to get the US down on its knees for people like Ahmudinejad. He and muslim radicals know they can fight the US army only in a very limited way, and will never be able to completely beat them.

An assault on Iran would cause a lot of 'allied' casualties, but in the end the 'allied' force would (successfully) occupy the country, which is necessary to prevent Iran from fully changing from the Petro Dollar to the Petro Euro.

If they let Iran change to the Euro, the consequences for the US will be catastrophic. China currently purchases 13% of its oil from Iran (in US Dollars). Besides, Iran and China recently signed a huge oil and gas trade agreement, of between 70-100 billion USD), and China doesn't care paying in Euros, like Iran demands.

With A Euro Oil bourse the general demand for Euros will increase swiftly, and more countries will automatically follow Iran's example, Saudi investors already announced to be interested in the Petro Euro ( other examples are Venuzuela, Russia).
This will cause an increase of the Euro value its value, and an even bigger depreciation in the value of the Dollar.

What does it mean? China is likely to increase it demand for Euros as they'll have to pay Iran with the particular currency. In contrast their demand for US Dollars will decrease rapidly, which makes it likely for them to decrease the current USD stocks.

The foreign debt holders keep the US economy running, when they start pulling out their capital and investments the US dollar, and thus its economy will collapse. This might be a real possibility if Iran will be successful in changing to the Euro.

Originally posted by Violent

The very shipping lanes you are concerned with would be necessarily protected by the countries trading in the bourse. China, EU, Iran and other parties for their mutual economic benefit would have an inherent interest in keeping those shipping lanes open.

The EU is not one country. It's a congregation of 25 independent nation states.

Originally posted by Mdv2
An assault on Iran would cause a lot of 'allied' casualties, but in the end the 'allied' force would (successfully) occupy the country, which is necessary to prevent Iran from fully changing from the Petro Dollar to the Petro Euro.

Any "assult" on Iran would be on their nuclear sites and result in 0 allied casualties and 0 "enemy" casualties as Iran would have plenty of warning before any strike were to occur.

If they let Iran change to the Euro, the consequences for the US will be catastrophic.

lol, no it wouldn't. This has been gone over MANY times now, it'll do you good to read a few things that have been said already.

China currently purchases 13% of its oil from Iran (in US Dollars). Besides, Iran and China recently signed a huge oil and gas trade agreement, of between 70-100 billion USD), and China doesn't care paying in Euros, like Iran demands.

1. Read up on this "oil bourse." Iran has said it will not sell oil only in Euros. If they ever decide to completely swtich to Euros any change will be very gradual.

2. Who cares about China? What does their purchasing oil have to do with us. They are our largest trading partner meaning WE'RE the reason why China's economy has been strong as of late. They wouldn't decide to switch to Euros because it would devestate their economy. Europe doesn't have enough money and resources to pick up the slack.

With A Euro Oil bourse the general demand for Euros will increase swiftly, and more countries will automatically follow Iran's example

bs
Where in the world did you get this crap from?
Iran isn't even switching to Euros completely as what you just said is not very likely to happen.

What does it mean? China is likely to increase it demand for Euros as they'll have to pay Iran with the particular currency. In contrast their demand for US Dollars will decrease rapidly, which makes it likely for them to decrease the current USD stocks.

lol
You fail to realize the vast majority of goods traded around the world is in dollars. And the US is the reason why alot of countries economy hasn't completely collapsed yet. Again, Europe has neither the resources nor the economy to pick the slack should the US economy fail. No one in their right mind would take a hit like that.

The foreign debt holders keep the US economy running, when they start pulling out their capital and investments the US dollar, and thus its economy will collapse. This might be a real possibility if Iran will be successful in changing to the Euro.

I'd seriously like to see where you're getting your info from...
Wow....



Edit: Why is this in the WoT section?

[edit on 30-5-2006 by ThatsJustWeird]

US household total net worth is $52.5 trillion. Disposable income after taxes etc is running at over $9 trillion a year. Americans are very rich and they are not getting poorer. The economy is perfectly sound, all the way down.

Can we still have shocks from high oil prices, war deficits, a low savings rate, a weak dollar, rising rates, and yes falling house prices? Certainly. Any of those can cause a recession, or not. Recessions are normal and trivial affairs that last a year or so. And the economy goes right back to growing 3% a year, real.

It has done so through cold war, inflation, world wars, depression, fiat money, gold standards, central banking, wildcat banking, technocrat managers, robber barons, civil war, invasion, and revolution. It isn't going to stop doing so the day after tomorrow. The American economy is one of the soundest bedrock facts of world history, and those who bet against it *always* lose.

And like a said the pros have long since priced all of this stuff in.

Anyone know if this story is true?

Well if we can believe the news that so far I only see cited as coming from Tehran it apparently is NOW open for business as of this week
Oct 26, 2009... Interesting that as important as this step has been claimed (by folks and blogs such as ATS) that finding any substantial news stories on this topic is next to impossible.
Now we all have heard how Fox supposedly isn't a real news outlet but at least there are some stories when u search there for Iran Oil Bourse... search CNN and see what you find... nada


I hope I can get to 20 posts so I can start a thread

Iran opens exchange to trade oil, products-ISNA