Iran leads attack against U.S. dollar
Quietly waging economic war as it builds nuclear program
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Posted: April 11, 2007
1:00 a.m. Eastern
By Jerome R. Corsi
© 2007 WorldNetDaily.com
While the world press has focused on Iran's plans to move ahead with enriching uranium, Tehran continues to wage economic war against the U.S. dollar behind the scenes.
Tehran has reached a decision to end all oil sales in dollars, according to statements by Iran's central bank governor, Ehrabhim Sheibany, in Kuala Lumpur at the end of last month.
Zhuhai Zhenrong Trading, a Chinese state-run company that buys 240,000 barrels of oil per day from Iran, approximately 10 percent of Iran's 2.2 million barrels per day total output, has confirmed a shift to the euro for its Iranian oil purchases.
About 60 percent of Iran's oil income is currently in non-dollar currencies, according to Hojjatollah Ghanimifard, who is responsible for international affairs for National Iranian Oil.
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Even Japanese refiners who buy some 550,000 barrels of oil a day from Iran have indicated their willingness to buy Iran's oil in yen.
China, which buys approximately 12 percent of its crude oil supply from Iran, signed last year a long-term $100 billion deal with Iran to develop Iran's giant Yadvaran oil field. Estimates indicate China could draw 150,000 barrels of oil from the Yadvaran field for the next 25 years, assuring Iran's position as one of the major suppliers of oil to China for decades to come.
One possibility is that China may begin paying Iran for oil in yuans.
Meanwhile, China which now holds $1 trillion in foreign reserve holdings, announced March 20 it will no longer ac ulate foreign exchange reserves.
This is more bad news for the dollar, since approximately 70 percent of China's $1 trillion in foreign reserve holdings are held in U.S. dollar assets.
About half of China's foreign exchange U.S. assets are invested in U.S. treasuries, which are vital to financing the continuing U.S. federal budget deficits.
The recent push by Iran to demand payment for Iranian oil in currencies other than the dollar marks a move away from a previous announcement that Tehran planned to open an Iranian oil bourse in March 2006, designed to quote oil prices in the euro.
Iran has yet to open an Iranian oil bourse, but demanding payment for Iranian oil in currencies other than the dollar is seen by many experts as a more direct attack on the dollar, especially if the Iranian decision backs a worldwide move away from using the dollar as the underpinning of world foreign exchange reserves.
Iran's central bank governor Sheibany also confirmed Iran is cutting U.S. dollar reserves to less than 20 percent of its total foreign reserve currency holdings. Iran plans to manage its foreign reserve currencies from oil sales in a basket of 20 different currencies.
The move by both Iran and China to hold fewer dollars in their foreign exchange reserve reflects a desire to diversify foreign exchange reserve portfolios amid concerns the dollar will continue to lose value versus the euro.
The dollar has lost 9 percent of its value against the euro in the last year and is down 35 percent against the euro in the last five years.
WND previously reported the late Iraqi dictator Saddam Hussein virtually signed his death warrant when he obtained the United Nations' permission to hold his Oil for Food foreign exchange reserves in the euro.
If you remember back, it's one of the last mistakes Saddam made too. We were in Baghdad a month later.Tehran has reached a decision to end all oil sales in dollars, according to statements by Iran's central bank governor, Ehrabhim Sheibany, in Kuala Lumpur at the end of last month.
Not enough Euros in the world for this to happen yet, but it would explain higher gas prices as oil producing nations want more dollars to cover currency exchange risks of a constantly depreciating dollar.Iran has yet to open an Iranian oil bourse, but demanding payment for Iranian oil in currencies other than the dollar is seen by many experts as a more direct attack on the dollar, especially if the Iranian decision backs a worldwide move away from using the dollar as the underpinning of world foreign exchange reserves.
Everyone should take special note of this. China needs Iranian oil to keep growing. We threaten the consistant flow of that supply, we threaten the national security of China. Who do you think is Irans primary missile technology proliferator?China, which buys approximately 12 percent of its crude oil supply from Iran, signed last year a long-term $100 billion deal with Iran to develop Iran's giant Yadvaran oil field. Estimates indicate China could draw 150,000 barrels of oil from the Yadvaran field for the next 25 years, assuring Iran's position as one of the major suppliers of oil to China for decades to come.
A war with Iran would turn into a defacto war with China. We'd both lose.
Doesn't the long-term weakening of the dollar that is being projected just make this more of a move dictated by logic than malice?
At any rate, Iran is issuing gas purchase cards in preparation for rationing as early as June. Looks like they are refusing to lift their subsidies.
"We were in Baghdad a month later."
The decision to invade Iraq for oil was made by neo- s/PNAC/AEI before dubya was elected.
The decision to invade Iraq in March 03 had been logistically "on the rails" for months back into 2002. WHIG was going to invade Iraq for oil, no matter what.
Invading Iraq in March 03 was "immediately necessary" and "no other option" because Rove had the Nov 03 election to win, with dubya as "victorious warrior"/Mission Accomplished. When that wet dream didn't make into reality, dubya ran as "war president" and just enough rabble/sheeple got suckered to give dubya the narrowest victory of any sitting president.
Saying dollar/euro oil currency was the trigger is pure bull .
Last edited by boutons_; 04-23-2007 at 09:55 AM.
Chump, one of the benefits of a so called
weaker dollar may work to our
advantage. Our goods become cheaper
to buy, hence exports go up.
Many nations don't want this to happen.
Iran alone, even with China, in the mix
cant really make it happen.
China really doesn' want a cheap dollar.
It makes their goods more expensive
for us to buy and we will buy less.
Remember what happen to Japan and
the Yen?
No, once again Dan shows his desire
for the United States to down the
drain, but shows little ability to know
how world finances really work.
Yeah, OK...a weak dollar would benefit producers by making American goods less expensive to foreign visitors, especially those purchasing in Euros, but that hasn't translated in real wage gains for employees in the last six years. I don't see why that will change in the last two of this administration. Higher productivity, greater profits, and a lack of real wage gains for the low man on the totem pole, capitalism at it's best!
You know Nbadan, you really should read something
besides the left wing blogs and tabloids. You are some
damn ignorant of everything you try to impress people
with.
The problems for the low man on the totem pole are caused by the inflationary practices of the Federal Reserve and the fact that he now has to compete with third world workers to keep his job. The low man is always going to have his problems, but if we had a true free-market, compe ive capitalist system that used real money and favored American workers over foreign ones then he'd be better off, just like everyone else who doesn't own a major corporation or bank.
This is almost as troubling as the Iran/oil/war situation. If you think back to the trade deficit thread we had going a few months ago, remember that the U.S. current account deficit depends upon the exporting nations' ability to find dollar denominated investments for those dollars they receive for their goods. Looks like they're losing faith in our ability to find domestic investment vehicles for foreign held dollars. This has always been inevitable, although it may just be the beginning. The Fed still has some plays it can make, especially by teaming up more monetary stimulus with fiscal stimulus. In other words, the Fed creates more money while the federal govenrment spends more money, possibly with more tax cuts, to create more debt instruments (U.S. Treasury debt) for the foreign exporters to put their dollars in to keep this economic blasphemy going.
As indebted as the U.S. govenrnment is, it can probably service more debt for years to come, especially if you look at its balance sheet compared to that of many American consumers who get credit cards, mortgages, home-equity loans and car financing. It's still probably years away until the bottom really falls out of the dollar. Each day is one day closer, but as the Dow shows, we're not there yet.
More on this - Long but good.
http://www.kitco.com/ind/Willie/apr192007.html
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