It's not necessarily anything to do with hatred of the US, just economic sense really as the US Dollar is at all time lows against other currencies.
The seller should be able to receive payment in whatever currency they request and not be tied to a single currency. Iran is not the only one moving away from the dollar as many banks, businesses and mega-rich individuals also seem to be divesting themselves of US currency.
I expect this will be viewed as a provocative move by Iran though by some in the US administration and banking system.

It makes sense to me. Iran should be switching away from the US Dollar to protect their country. US money ain't worth much nowadays. ever tried to see what a dollar will buy you at the local store. Not much. I think they need to double minimum wage to make up for the fact that the dollar is so weak but we still get paid the same. isn't that really like paying us less or ripping us off? isn't it the Govt. duty to prevent the american people from getting ripped off? Thanks Bush!.....Douche.

Interesting. Is this a precursor to war? Or is it just as simple as switching to a more stable currency?

It's a political move, pure and simple.

this is just digits in a computer, whether the oil is counted in USD or yen or pesos.

International trade can be denominated in any currency you like. Since dollars and yen are freely convertible in the world's currency markets, Iran could just as easily perform the exchange itself. In fact, it already does; buying and selling currencies every second to handle transactions with every one of its global trading partners. The "hole" in the currency exchange matrix between the price in USD per barrell, versus price in Yen per barrell, is so small that you have to be a currency speculator to try and exploit it. Such windows last for less than thirty seconds at a stretch on the spot markets in oil.

The only real effects of this move are:

1) make Iran less vulnerable to having its international accounts frozen by the US and US-friendly banks

2) help mask the true number of barrels they export per day

3) make Japan more dependent upon Iran's welfare. The same arguments that "dollar bears" use against China "stockpiling american debt" also applies to Iran "hoarding" Japanese currency: if it is dumped in a hurry, it would allegedly damage the Japanese economy. (In actuality, Iran would lose billions, as the value of the yen fell, and speculators move in to exploit the "window" created by differential currency exchance between Iran and the Merk, or London, etc.

4). Provide the needed propaganda headline for this news-cycle in Iran and the US.

.

Could the US be heading for another big recession? I mean seriously they have been able to sort of print their own money, espically where oil is concerned. OPEC ruled ages ago that the US doller was the only way oil could be brought and sold, thus giving them a lot of control.

Is this why the UK is so slow to enter the Euro? (being best buddies with the US)

If more and more things are going t get traded in non US currency what effect will it have? I think a lot of power will be lost from the almighty doller and be redistributed.

Just my 2 cents (not worth as much as it used to be )

actually gools, that might be a social indicator we are at a market high -- regulators relax lending rules typically, right as the market peaks. Just before the slide in 1997, the regulators removed the trading rules that suspended trading on the NYSE if the Dow moved more than 200 pts. They took the stops out just in time for the dow to drop . . .

On a deeper level, it shows how the US debt market is maturing. Lenders, especially the cheesy ones, are having to chase lower and lower returns to shore up their profit momentum.

The "sub-prime" lending fiasco is another, more important example.


About the only thing I think the Bush administration has done right is, treasury's refusal to try and manipulate the dollar against other currencies. They have finally gotten the point that you cannot dictate price in a fair market. You end up just handing money to speculators. (Think of the Clinton bailout of the Peso back in the early 1990's. )

Originally posted by dr_strangecraft
... treasury's refusal to try and manipulate the dollar against other currencies.

Hmmm... their refusal to manipulate the dollar or their inability to set the price in the face of overwhelming pressure/factors?

Anyway, see if you can spot the trend:


.

Originally posted by Gools
The Canadian dollar has hit a 30 year high (last time was during the 70's energy crisis) against the US dollar. The Euro is also setting record highs against the dollar. People need to realize that places like Canada and Europe are not doing anything special. It's the US dollar that's going down.

Bingo!

Look at the Pound against the Dollar, it's climbing and climbing.

The dollar is on the decline.

Is this why the UK is so slow to enter the Euro?

No, UK economy is going strong out of the Eurozone. We are unlikely to join due to public opinion is strongly against the Euro. So is the business community.

Originally posted by Gools
Hmmm... their refusal to manipulate the dollar or their inability to set the price in the face of overwhelming pressure/factors?

A lower dollar has been stated U.S. currency policy for like forever. Not to say that they could definitely turn it around if they wanted to, but surely they are not trying at all. This is their plan.

Anyway (more on topic) the Japanese Yen isn't doing that great either. It's been doing better than the dollar, but still falling compared the Euro/Pound.

As far as oil trading, I don't think it's a big deal. The Federal Reserve System has a panoply of tools at its disposal to control the money supply. If the demand for dollars drops because they're being used less in the international petroleum markets, the Fed can just as quickly lower the money supply. It might cause some weakness, but I don't see that as a major threat to the dollar.

Well, look on the bright side. The decline of the dollar will create more jobs because it's now more cheaper for investors oversees to invest in the US.

Well, look on the bright side. The decline of the dollar will create more jobs because it's now more cheaper for investors oversees to invest in the US.

Sure. All compagnies are evacuating the country and foreign compagnies are buying infrastructure... roads ect... When all this come down, the US will be a third-world country.

Isn't the US stuck between a rock and a hard place though?

Rising inflation means they need to put up rates, but the credit market is so weak that a rates increase is not a good idea.

I've read everywhere and anywhere, bar US sources, that say the US economy is weak and is getting weaker.

It's all very well having a low dollar for manufacturing, but it hurts imports and commodity trading too, which can put an swift end to any perceived bonus to the manufacturers as they have to pay more for the materials.

In the end, you'll be left with a weak dollar, rising inflation and no real way of tackling it unless you are willing to hurt alot of people.

Well, look on the bright side. The decline of the dollar will create more jobs because it's now more cheaper for investors oversees to invest in the US.

Doesn't exactly work like that... yes the value of the dollar is a big deciding factor with outsourcing, but you still have to look at what it costs for the companies to do the work over there as well.

The US has pretty high job standards for a country with a currency declining at this rate. Though they will have to bring minimum wage up to let their people eat now, they will also have to drop minimum wage just to compete.

Remember, there are over 37 million citizens of the US living below the poverty line. This is going to be a big problem, as not only will that number increase, but those already below poverty, will simply be unable to survive.
Without any form of a social safety net for them, many of these people could likely simply die off.

Expect to see signs such as "No Vacancy" or "No Funding" on local homeless shelters.

There is one shining light amidst all of this. Canada's borders are still wide open to immigrants. Canada's long standing tradition of bringing in immigrants to work in exchange for citizenship will undoubtedly assist many citizens of the US.

Expect this to begin changing though, once a possible depression spreads into Canada as well.


With every depression, there comes civil unrest. Expect excessively harsh laws being permitted in states that were once quite liberal.


Best thing you can do is invest at this point. Not just in something solid like gold, but also invest in your future. If times get bad for you in the future, you may want to be stocked in canned food for quite some time.

I'm not sure what else you can do... leave?


Financial advisors have been warning of a coming economic crisis ever since 2002. And they are getting louder.
What will you do?

[edit on 15-7-2007 by johnsky]

Originally posted by johnsky
Financial advisors have been warning of a coming economic crisis ever since 2002. And they are getting louder.
What will you do?

You are hilarious. Stock up in canned food? Americans running to Canada for jobs? If there is an economic crisis it will not be as bad the crash of '29. There are so many "speed bumps" that will stop a tumble to extreme lows.

Not only that, but many countries will invest as much as possible into the US if there is a huge problem because if the US has an ENORMOUS economic slump as you are saying, it will affect the whole world. It happened in the 1930's when the world wasn't so connected, it will happen now when the world economies are closely linked.

So stop your unfounded exaggerations and fear mongering.