Moderator: Peak Moderation
GWB sure ain't gonna like this news.www.ameinfo.com - 04/11/07
An official at the National Iranian Oil Company (NIOC) has revealed that 85% of the Islamic Republic's oil deals are now conducted in currencies other than the US dollar, reported the Tehran Times. The NIOC has requested that purchasers pay in alternative currencies so that Iran can reduce its 'dollar dependence'. The US is currently leading an aggressive economic boycott of Iran over its disputed nuclear policy.
I appreciate that the Japanese had been paying in yen Jim, but I think it will come as a surprise to most people that 85% of the Iranian oil is now sold in currencies other than the dollar.SunnyJim wrote:He already knows!
Why do you think he's sharpening his warheads..?
Read this news from back in September.
http://news.bbc.co.uk/1/hi/business/6981375.stm
Whilst I guess thats correct (you'll have to forgive any lack of understanding on this subject, i'm no expert) isnt it slightly irrelevant ?MacG wrote:It does not matter one iota which currency is used for oil purchases, what matters is where the proceeds are parked after the deal. The pivotal issue is that the proceeds are to be parked in US treasury notes and bonds. As long as that happens, the currency used for an intermediate transaction is irrelevant.
Ah, sorry. Quite right. Yes, that is quite a chunk of revenue isn't it? More worrying for the US is the fact that the idea might catch on.Aurora wrote:I appreciate that the Japanese had been paying in yen Jim, but I think it will come as a surprise to most people that 85% of the Iranian oil is now sold in currencies other than the dollar.SunnyJim wrote:He already knows!
Why do you think he's sharpening his warheads..?
Read this news from back in September.
http://news.bbc.co.uk/1/hi/business/6981375.stm
See also:Petrodollar Warfare: Oil, Iraq and the Future of the Dollar by William R. Clark
Meticulously researched, this book examines US dollar hegemony and the unsustainable macroeconomics of 'petrodollar recycling', pointing out that issues underlying the Iraq war also apply to geostrategic tensions between the US and other countries including the member states of the EU, Iran, Venezuela and Russia. The author warns that without changing course, the American Experiments will end the way all empires end -- with military over-tension and subsequent economic decline. He recommends the multilateral pursuit of both energy and monentary reforms within a United Nations framework to create a more balanced global energy and monetary system -- thereby reducing the possibility of future oil and oil-currency related warfare.
Isn't the point that, if oil consuming nations have to pay in US$, they have to keep reserves of the currency? Or can they not just nip down to the metaphorical bureau de change and change their euros, yen etc into dollars for the purchase.gug wrote:Whilst I guess thats correct (you'll have to forgive any lack of understanding on this subject, i'm no expert) isnt it slightly irrelevant ?MacG wrote:It does not matter one iota which currency is used for oil purchases, what matters is where the proceeds are parked after the deal. The pivotal issue is that the proceeds are to be parked in US treasury notes and bonds. As long as that happens, the currency used for an intermediate transaction is irrelevant.
If people no longer buy or use dollars for oil trading , dollars become worthless (well, worth-less than they were) and back they flood to the fed like the formerly "never to be cashed cheques" that they previously were ?
and why is it certain that the proceeds /would/ be parked in anything to do with the US treasury ?
Yeah, the currency of transaction is irrelevant, what's relevant is demand for dollars. One way of generating demand for dollars is to carry own oil transactions in dollars, another way is to buy dollars (as you say) with the process of oil sale. I think it?s safe to assume that if Iran doesn't what to use dollars for oil transactions it isn't about to use the resulting Euro, Yen or Yuan to by dollars. So ? same impact, lower demand for the dollar.MacG wrote:It does not matter one iota which currency is used for oil purchases, what matters is where the proceeds are parked after the deal. The pivotal issue is that the proceeds are to be parked in US treasury notes and bonds. As long as that happens, the currency used for an intermediate transaction is irrelevant.
The important thing is the demand for US treasury notes. By prodding the Saudi's and others to buy US treasury notes, the petrodollars are recycled and can be used again. If the Persians or anyone else get payment for oil in dollars, they can change those dollars to Euro, Yen, Pounds or Renminbi or whatever they want in seconds. This thing about not accepting US dollars as payment is just a symbolic thing - the important issue is what they buy with the proceeds.clv101 wrote:Yeah, the currency of transaction is irrelevant, what's relevant is demand for dollars. One way of generating demand for dollars is to carry own oil transactions in dollars, another way is to buy dollars (as you say) with the process of oil sale. I think it?s safe to assume that if Iran doesn't what to use dollars for oil transactions it isn't about to use the resulting Euro, Yen or Yuan to by dollars. So ? same impact, lower demand for the dollar.MacG wrote:It does not matter one iota which currency is used for oil purchases, what matters is where the proceeds are parked after the deal. The pivotal issue is that the proceeds are to be parked in US treasury notes and bonds. As long as that happens, the currency used for an intermediate transaction is irrelevant.
I agree.The important thing is the demand for US treasury notes. By prodding the Saudi's and others to buy US treasury notes, the petrodollars are recycled and can be used again. If the Persians or anyone else get payment for oil in dollars, they can change those dollars to Euro, Yen, Pounds or Renminbi or whatever they want in seconds. This thing about not accepting US dollars as payment is just a symbolic thing - the important issue is what they buy with the proceeds.
Bozzio, well done for posting this in the right thread, rather than opening TWO more identical threads in both News AND General Discussion!! Seems that some people post more threads than they actually read. Grumble over. I've had a weird day.Bozzio wrote:Looks like Iran is only selling in other currencies now.
Iran drops dollar from oil deals: report
