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Iranian Oil Bourse
Dortmunder
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Registered User regular
The Iranian Oil Bourse
There have been some talking points floating around lately about the impact of the IOB, especially since Iran has been asking customers to pay in currencies other than the USD. If others (notably Saudi Arabia) follow suite, this would have a major impact on the American economy as countries would no longer be required to purchase and stockpile US dollars to secure their oil supply, as is the present standard. Without that support, and because the US hasn't been able to back it's dollar with gold since 1971, there is some fear that there will be nothing left holding up the greenback.
Some analysts have theorized that it was a similar move by Iraq in 2003 that was the "last straw" which prompted the invasion. This may or may not be plausible, but it can be noted that the coalition forces did revert Iraq's oil income back to the USD shortly after taking power, and that the original premises for the war -- WMD, I'm looking at (for) you -- were obviously false.
One thing I found interesting: Remember all of those undsea cable cuts from earlier this year? That just happened to coincide with launch of the IOB. Tinfoil hat territory? I don't know. Given what we have seen from this administration, and what they are willing to do to protect the American empire, I wouldn't be too shocked if there was a connection.
So what do you think about the Iranian Oil Bourse? What kind of impact will it have? Will Saudi Arabia get on board?
wikipedia wrote:The Iranian Oil Bourse is a commodity exchange which opened on February 17, 2008. It was created by cooperation between Iranian ministries and other state and private institutions. The IOB is a Petrobourse for petroleum, petrochemicals and gas in various non-dollar currencies, primarily the Euro and Iranian rial and a basket of other major currencies. The geographical location is at the Persian Gulf island of Kish which is designated by Iran as a free trade zone.
There have been some talking points floating around lately about the impact of the IOB, especially since Iran has been asking customers to pay in currencies other than the USD. If others (notably Saudi Arabia) follow suite, this would have a major impact on the American economy as countries would no longer be required to purchase and stockpile US dollars to secure their oil supply, as is the present standard. Without that support, and because the US hasn't been able to back it's dollar with gold since 1971, there is some fear that there will be nothing left holding up the greenback.
Some analysts have theorized that it was a similar move by Iraq in 2003 that was the "last straw" which prompted the invasion. This may or may not be plausible, but it can be noted that the coalition forces did revert Iraq's oil income back to the USD shortly after taking power, and that the original premises for the war -- WMD, I'm looking at (for) you -- were obviously false.
One thing I found interesting: Remember all of those undsea cable cuts from earlier this year? That just happened to coincide with launch of the IOB. Tinfoil hat territory? I don't know. Given what we have seen from this administration, and what they are willing to do to protect the American empire, I wouldn't be too shocked if there was a connection.
So what do you think about the Iranian Oil Bourse? What kind of impact will it have? Will Saudi Arabia get on board?
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This is precisely the reason why, despite the fact that the Chinese have the US by the balls financially, they'll never call the debt in full and bankrupt the country- the blowback would sink them too.
I'm pretty sure the world needs food pretty bad
Seriously though, the world knows that it can only fuck with the dollar so much. Either they crash us, and their own economies in the process, or we just invade someone prop things up for four more years.
Iraq did wonders for the US Dollar.
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Considering we invaded March 30 of 03 i believe my point stands. Would you prefer 5 years?
I don't want to burst any bubbles, but I have to say I completely disagree with the idea that the US dollar will collapse if trading oil in other currencies becomes possible. It might take a hit, sure, but to claim it will collapse is a little extreme.
And so what if we're off the gold standard, tell me one modern currency that's on it? What props up the yen? and the pound? And the Euro? Certainly not gold, and apparently not oil (since that clearly props up the dollar).
Commodities are traded in dollars because the US has the largest economy, and dollars are the most prevalent currency in the world. Traditionally the dollar has been the 'safest' of all the currencies. Primarily because it was thought that the US economy was the most robust. There's no reason that if oil was traded using the Euro things would noticeably change.
Gold, for example, is commonly priced in multiple currencies. So what?
When you owe someone that amount of money, you make them your de facto business partner.
You're right; being off the gold standard - in and of itself - is not a terrible thing. My concern is that if the USD stops being the de facto currency for petroleum, would other commodities follow suite?
I guess if in the long run the Euro turns out to be more stable than the dollar, and the European economies that use it wind up being bigger and more significant on the world stage than the American economy, there's no reason why it wouldn't turn out to become the international standard. Could happen to the Yuan instead... eventually.
The problem with this is that the dollar is looking less and less safe. It has suffered a huge drop in value over the past few years, and so countries with large amounts of US curreny now have lost a huge amount of money simply because they have USD. The US economy looks like shit, with more shit to follow. There are still good reasons to keep dollars around, like oil being traded in dollars. But these reasons are becoming fewer and fewer, and if the dollar keeps losing its value, other nations may get rid of their reserves en masse, which would cause huge problems for the US economy and sink the dollar even further.
This is a major issue. For example, OPEC refused to even discuss trading oil in another other than dollars. Why? Because the Saudi foreign minister feared that even talking about such a thing could the dollar to collapse. He was overheard saying this at an OPEC conference when a mic was left on.
http://www.thebusiness.co.uk/news-and-analysis/358346/saudi-minister-warns-of-dollar-collapse.thtml
Nobody wants to talk about it, but the US dollar is in an extremely precarious situation right now, with countries holding onto their reserves not because it makes economic good sense, but because they fear a wider collapse if things change.
Borrow a million bucks and you own them.
Of course the world is scared shitless of what would happen if the US economy collapsed. That's why they'll make sure it won't.
A whole third of US corn production is already being made into biofuels. I fear that an oil crisis is the worst thing that could happen during a food crisis. A crashed dollar would make food exports mightily tempting though, I wonder what will win out.