NationStates Jolt Archive

Don't know what any of this means but do ya'll think it could be the start of any sort of conflict between the US and Iran. I am interested in hearing everyones opinion

Read on

http://www.themoneyblogs.com/nasdaqtrader/my.blog/war-with-iran-has-officially-started.html

Makes no real economic difference. The number of dollars and euro in circulation are about equal now, so it's equally convenient for them to use either. It doesn't help or harm our economy here.

meh, whatever.

Can someone explain to me how this could destroy the US economically, if its true that the dollar is kept at such high value by oil, how would Iran make any difference, most of our oil comes from the Arabian peninsula or the gulf of mexico.

Can someone explain to me how this could destroy the US economically, if its true that the dollar is kept at such high value by oil, how would Iran make any difference, most of our oil comes from the Arabian peninsula or the gulf of mexico.

http://video.google.com/videoplay?docid=7374585792978336967&q

Some 21.5-22 mins in, there is a neat explanation.

It means that Iran is selling all its dollar based holdings - bonds and such I imagine - and buying Euro denominated ones with proceeds. In other words not much.

The Italian central bank reduced its exposure to dollars about a month back and invested in euros. I would guess that was a slightly more significant transaction and no-one flapped about that.

Can someone explain to me how this could destroy the US economically, if its true that the dollar is kept at such high value by oil, how would Iran make any difference, most of our oil comes from the Arabian peninsula or the gulf of mexico.

Iran doesn't make a real difference, even if those theories are true (which I doubt). Iran, like you said, is not a major oil player for us, and in any case has a small and shrinking population, who don't much affect the overall number of dollars in circulation.

Can someone explain to me how this could destroy the US economically, if its true that the dollar is kept at such high value by oil, how would Iran make any difference, most of our oil comes from the Arabian peninsula or the gulf of mexico.

Largest single chunk of it by nation comes from Canada, for what it's worth.

Largest single chunk of it by nation comes from Canada, for what it's worth.

Really? Why haven't we invaded them yet?

Iran's holdings of dollars are quite insignificant to cause anything by itself. If the OPEC as a whole shifts to Euro it would cause a shift. Other countries no longer have to pay dollars for oil - and that would create changes in the way countries operate currently.

http://video.google.com/videoplay?docid=7374585792978336967&q

Some 21.5-22 mins in, there is a neat explanation.

On the plus side, that would take care of the trade deficit.

Really? Why haven't we invaded them yet?

Freedom Bacon!

Don't know what any of this means but do ya'll think it could be the start of any sort of conflict between the US and Iran. I am interested in hearing everyones opinion

Read on

http://www.themoneyblogs.com/nasdaqtrader/my.blog/war-with-iran-has-officially-started.html
I started a thread about this back in Feb. 2006:

Iranian Oil Burse prelude to War (http://forums3.jolt.co.uk/showthread.php?t=470452)??

Seems rather serious to me.

I started a thread about this back in Feb. 2006:

Iranian Oil Burse prelude to War (http://forums3.jolt.co.uk/showthread.php?t=470452)??

Seems rather serious to me.

Sorry for reposting an old topic, i'll have to read up on this. Thanks for the link :)

Seems rather serious to me.

It's only serious if you listen to hysterical types that never do any research. There seems to be some type of nightmare scenario that people talk about that if the USD is no longer the 'reserve' currency then the US will no longer be able to meet its debt commitments abroad. But that is just not realistic. The US external debt is only about 20% larger than the united kingdom's, and no one is running around talking about the UK becoming a third world - country - well not with any credibility - even though the GBP is not the worlds 'reserve currency'.

If the UK, with some eight trillion in external debt, is not considered to be in danger of a grave financial meltdown, then I don't imagine the US - with an economy approx. six times the size - is that imperriled by an an external debt of 10 trillion.

In fact, on a per capita basis, france and germany are more up shit creek on this score than the US. (And plenty of other countries too I should imagine).

It would just mean that a dollar is worth less. There would be less imported and more exported. And what is more, as much as it would hurt the US, it would also hurt all those other countries that hold massive amounts of dollar denominated assets, like bonds and such. It would also hurt countries, like germany and japan which depend heavily on exports to the US to drive their economies.

It wouldn't mean, however, that people would stop accepting dollars for barrels of oil. The dollar would still be a hard currency.

Frankly, it would restore some much needed fiscal prudence to the idiot 'harry howmuchamonth' consumer in the US, and would be worth the short term pain.

http://video.google.com/videoplay?docid=7374585792978336967&q

Some 21.5-22 mins in, there is a neat explanation.
Most excellent history presentation there. ;) I can hear the faint cries from the conservative crowd now, the gnashing of the teeth, and see the wringing of the hands.....

Sorry for reposting an old topic, i'll have to read up on this. Thanks for the link :)
Glad to be of service. ;)

http://video.google.com/videoplay?docid=7374585792978336967&q

Some 21.5-22 mins in, there is a neat explanation.

That is brilliant.

The Iranian economy is fairly strong and growing. This is a country with 70 million people in it and the world's 19th largest GDP (PPP) ranking with strong growth.

Granted, this is not the end of the world for the dollar, but it is fueling the decline of the dollar against the Euro, and it's definitely a deliberate poke in the eye in return for all the saber-rattling.

Irrelevant.

Iran has approximately $40 billion dollars in foreign exchange reserves, barely a drop in the dollar bucket.

Irrelevant.

Iran has approximately $40 billion dollars in foreign exchange reserves, barely a drop in the dollar bucket.
That would be on the order of 1% of the foreign exchange reserves in dollars. Noticable when the typical change in reserve currency holdings shifts by fractions of a percent annually. Of course, Iran itself is not as important except as part of a growing trend; Venezuela has been making similar noises about switching to euros, and Indonesia is starting a slow shift.

Iran and Venezuela are interesting because they're clear cases of countries moving away from dollars and towards euros as a result of political disputes with the US. This accelerates projections of the euro vs dollar exchange. Of course, China is unlikely to dispense with its dollar reserves unless it decides to detach the yuan from the dollar. China and Japan each hold something like a fifth of the world's foreign currency reserves, and we do an awful lot of business with them and India, so as long as the US doesn't piss them off, the dollar shouldn't bomb out.

Of course, Iran exports over $50 billion in oil annually. People are more interested in that than the foreign exchange reserves in and of themselves. Every little shift towards the euro is being noted carefully.

Scratch that, China did quietly detach the yuan from the dollar. I didn't even notice.

Well, it's still kinda pegged, just not strictly. Sneaky China.

Really? Why haven't we invaded them yet?

Have you been listening to the politicians? There's a huge political condingent trying to sell the invasion of Iran. If the invasion of Iraq hadn't gone so half-assed we'd be invading them already. Bush and Co. however have no credibility anymore.

don't they still use the rial?

The dollar has dropped in value so I guess it's smarter to buy euros.

Largest single chunk of it by nation comes from Canada, for what it's worth.
Really? Why haven't we invaded them yet?
Have you been listening to the politicians? There's a huge political condingent trying to sell the invasion of Iran. If the invasion of Iraq hadn't gone so half-assed we'd be invading them already. Bush and Co. however have no credibility anymore.

Uhm - he's talking aboot Canada, eh?

As for the video - that's brilliant! Highly amusing, sophisticated and funny. A rare match! *bookmarked*

Scratch that, China did quietly detach the yuan from the dollar. I didn't even notice.

Well, it's still kinda pegged, just not strictly. Sneaky China.

They are not fully convertible yet and given their poor financial systems, it would be a while for that to happen.

I feel sorry for the Euro; the last thing they need is a loser like Iran buying up their currency for foreign exchange.

I mean, seeing as how Iran is going to fall apart economically pretty soon it will hurt the Euro with it unless they can find more foreign exchange customers. Iran will have to start unloading its foreign exchange within the next decade since the oil industry's falling apart and the rest of the economy is in tatters. I wouldn't be surprised if Iran had a total economic collapse in the next few years...it's that bad and it will only get worse.

I feel sorry for the Euro; the last thing they need is a loser like Iran buying up their currency for foreign exchange.

I mean, seeing as how Iran is going to fall apart economically pretty soon it will hurt the Euro with it unless they can find more foreign exchange customers. Iran will have to start unloading its foreign exchange within the next decade since the oil industry's falling apart and the rest of the economy is in tatters. I wouldn't be surprised if Iran had a total economic collapse in the next few years...it's that bad and it will only get worse.

The problem with Iran's oil is not that the oil is disappearing - it's that they haven't invested any money in improving their oil infrastructure in the last 20 years - no new refineries, no new pipelines, no new drilling equipment or technology. Most predictions show that Iran won't be able to export any oil at all within the next 10 years - even if they get nuclear power for domestic power uses.

The problem with Iran's oil is not that the oil is disappearing - it's that they haven't invested any money in improving their oil infrastructure in the last 20 years - no new refineries, no new pipelines, no new drilling equipment or technology. Most predictions show that Iran won't be able to export any oil at all within the next 10 years - even if they get nuclear power for domestic power uses.

That's what I mean; their entire infrastructure is aging, and as a result they have to import more and more refined products and even crude oil to keep what is left functioning. Last year, for example, they had to ration gasoline because they exhausted the money allocated to importing it, and that's only going to get worse as more and more of their oil industry breaks down. Imagine what will happen when Iran has to start dumping foreign exchange to keep itself going...it will be a massive economic collapse and likely a Middle East recession.

It's sad because Iran has one of the largest oil reserves in the world, and a lot left to discover; the problem is, their infrastructure is not capable of producing it and will eventually break down entirely.

That's what I mean; their entire infrastructure is aging, and as a result they have to import more and more refined products and even crude oil to keep what is left functioning. Last year, for example, they had to ration gasoline because they exhausted the money allocated to importing it, and that's only going to get worse as more and more of their oil industry breaks down. Imagine what will happen when Iran has to start dumping foreign exchange to keep itself going...it will be a massive economic collapse and likely a Middle East recession.

It's sad because Iran has one of the largest oil reserves in the world, and a lot left to discover; the problem is, their infrastructure is not capable of producing it and will eventually break down entirely.What's blocking investment?

What's blocking investment?

US sanctions.

US sanctions.

Um, now it will be UN sanctions, which could have been, but were not, vetoed by nations other than the US>

Um, now it will be UN sanctions, which could have been, but were not, vetoed by nations other than the US>

It will be UN sanctions *now* yes, if Iran continues with its nuclear programme.
However, the lack of investment till date is mostly due to US sanctions.

It will be UN sanctions *now* yes, if Iran continues with its nuclear programme.
However, the lack of investment till date is mostly due to US sanctions.

Apparently, other nations have no problem with that, otherwise, they would have gone around US sanctions.

Apparently, other nations have no problem with that, otherwise, they would have gone around US sanctions.

The sanctions include a ban on trading with companies that trade with Iran. It is very effective - it even severely hampered the construction of a pipeline to India.

The sanctions include a ban on trading with companies that trade with Iran. It is very effective - it even severely hampered the construction of a pipeline to India.

See the sanctions (UN sanctions) on Iraq. Where there's a will, there's a way. The sanctions were completely subverted there. All that is lacking is the will to overcome the sanctions in Iran.

And European nations at the UN who were in the Security Council just voted for more sanctions. So they must be happy to do so.

I really don't understand this idea of there being little investment in Iran's oil production. The country itself reinvests $4 billion each year (~10% of revenues or profits - i'm unsure which, but a hefty amount either way).
http://www.financialsense.com/editorials/gue/2006/1229.html

China has set up a deal with Iran to provide with LNG. The deal is thought to be worth up $200 billion in the long run.
On 29 October 2004 Iran and China announced the signing of a deal on Chinese investment in Iran’s oil fields and the long-term sale of Iranian natural gas to China that could eventually be worth $100 billion. The gas deal entails the annual export of some 10 million tons of Iranian liquefied natural gas (LNG) for a 25-year period. The deal could eventually reach 15-20m tons a year, taking the total value to as much as $200bn. Delivery could not begin for at least five years, as Iran must first build the plants to liquefy the natural gas. This stunning development was widely considered a major blow to the Bush administration's sanctions on Iran. The Iran-Libya Sanctions Act (ILSA) penalizes companies investing more than $20 million in Iran's oil and gas sector. Iranian officials are hopeful the deal will lead to a fundamental rethinking of doing business with Iran on the part of European countries, India, Japan, and even Russia.
http://www.globalsecurity.org/military/world/iran/oil.htm

So, yes, Iran is underproducing, but it seems like Iran has been intentionally underproducing for decades. Khomeni ordered that oil production be lowered to the absolute minimum necessary to keep the country going once the revolution was over.
http://www.globalsecurity.org/military/world/iran/images/iranprodcons.gif

People also talk about decling production. But if you examine Saudi Arabia then you find that their net export of oil has decreased by an equivalent ratio. 2.6 -> 2.5 million barrels/day for Iran and 8.4 -> 7.9 million barrels/day for SA.
http://www.eia.doe.gov/emeu/cabs/pgulf.html - for 2003 net exports
https://www.cia.gov/cia/publications/factbook/index.html - for 2006 net exports

Don't know what any of this means but do ya'll think it could be the start of any sort of conflict between the US and Iran. I am interested in hearing everyones opinion

Read on

http://www.themoneyblogs.com/nasdaqtrader/my.blog/war-with-iran-has-officially-started.html:confused:

Damn ebil Iranians.. how dare thay stop buying US dollars.. lets carpet-bomb the shiite out of them. :mp5: :sniper: :sniper:

lets carpet-bomb the shiite out of them.

pun intended ? ;)

The Euro is replacing the dollar everywhere. If Russia and/or Britain accepts it, then its all over for the US Dollar.

pun intended ? ;)(pun) for me its like sex :fluffle: .. If the window-of-opportunity opens.. I enter. :D

I really don't understand this idea of there being little investment in Iran's oil production. The country itself reinvests $4 billion each year (~10% of revenues or profits - i'm unsure which, but a hefty amount either way).
http://www.financialsense.com/editorials/gue/2006/1229.html

China has set up a deal with Iran to provide with LNG. The deal is thought to be worth up $200 billion in the long run.

http://www.globalsecurity.org/military/world/iran/oil.htm

So, yes, Iran is underproducing, but it seems like Iran has been intentionally underproducing for decades. Khomeni ordered that oil production be lowered to the absolute minimum necessary to keep the country going once the revolution was over.
http://www.globalsecurity.org/military/world/iran/images/iranprodcons.gif

People also talk about decling production. But if you examine Saudi Arabia then you find that their net export of oil has decreased by an equivalent ratio. 2.6 -> 2.5 million barrels/day for Iran and 8.4 -> 7.9 million barrels/day for SA.
http://www.eia.doe.gov/emeu/cabs/pgulf.html - for 2003 net exports
https://www.cia.gov/cia/publications/factbook/index.html - for 2006 net exports
This kinda refutes what the others were saying. I honestly believe that Iran is doing better than one might expect. I don't think they are skid row candidates just yet.

This kinda refutes what the others were saying. I honestly believe that Iran is doing better than one might expect. Yes Iran is going forward..
Some time ago someone posted several pics of real-life Iran.. It showed a different Image from what we asume..

its stupid, they should stick with the dollar.

Yes Iran is going forward..
Some time ago someone posted several pics of real-life Iran.. It showed a different Image from what we asume..

Iran is quite a beautiful country.

Iran is quite a beautiful country.and so is India BTW.. a friend just showed us some pics of his condo in Mumbai(Bombay).. and the shopping mall.

and so is India BTW.. a friend just showed us some pics of his condo in Bombay.. and the shopping mall.

It has many spots that are and yet have many that are not. I could show you some of the slums of New Delhi.....

Yes Iran is going forward..
Some time ago someone posted several pics of real-life Iran.. It showed a different Image from what we asume..
I saw that and was enlightened to say the least. Some stiffs here just look upon them as evil Muslims, advocate vapourizing them all, and fail to realize that they are people just like you and I.

It has many spots that are and yet have many that are not. I could show you some of the slums of New Delhi.....yes..yes.. we all know about those.. but he showed me another face of his Country.

yes..yes.. we all know about those.. but he showed me another face of his Country.

Ahh. But he has shown you a tiny amount.

The Buddist Caves near Arangabad are fascinating.
The Tiger reserve at Nagerhole(sp)
The area near Nepal.
So many to choose....

The one thing that did get to me was the level of smog!

Read something similar to this about Iraq years ago. It's still up.. on quite a few sites.. but I'll link the cool conspiracy one.

http://www.conspiracyarchive.com/Commentary/Dollar_Iraq.htm

another .. http://www.thirdworldtraveler.com/Iraq/Iraq_dollar_vs_euro.html

Don't know what any of this means but do ya'll think it could be the start of any sort of conflict between the US and Iran. I am interested in hearing everyones opinion

Read on

http://www.themoneyblogs.com/nasdaqtrader/my.blog/war-with-iran-has-officially-started.html

The US and Iran are hardly on good terms at the moment.

interesting shiite..

Economically, the American Empire was born with Bretton Woods in 1945. The U.S. dollar was not fully convertible to gold, but was made convertible to gold only to foreign governments. This established the dollar as the reserve currency of the world. It was possible, because during WWII, the United States had supplied its allies with provisions, demanding gold as payment, thus accumulating significant portion of the world’s gold. An Empire would not have been possible if, following the Bretton Woods arrangement, the dollar supply was kept limited and within the availability of gold, so as to fully exchange back dollars for gold. However, the guns-and-butter policy of the 1960’s was an imperial one: the dollar supply was relentlessly increased to finance Vietnam and LBJ’s Great Society. Most of those dollars were handed over to foreigners in exchange for economic goods, without the prospect of buying them back at the same value. The increase in dollar holdings of foreigners via persistent U.S. trade deficits was tantamount to a tax—the classical inflation tax that a country imposes on its own citizens, this time around an inflation tax that U.S. imposed on rest of the world.

When in 1970-1971 foreigners demanded payment for their dollars in gold, The U.S. Government defaulted on its payment on August 15, 1971. While the popular spin told the story of “severing the link between the dollar and gold”, in reality the denial to pay back in gold was an act of bankruptcy by the U.S. Government. Essentially, the U.S. declared itself an Empire. It had extracted an enormous amount of economic goods from the rest of the world, with no intention or ability to return those goods, and the world was powerless to respond— the world was taxed and it could not do anything about it.

From that point on, to sustain the American Empire and to continue to tax the rest of the world, the United States had to force the world to continue to accept ever-depreciating dollars in exchange for economic goods and to have the world hold more and more of those depreciating dollars. It had to give the world an economic reason to hold them, and that reason was oil.

In 1971, as it became clearer and clearer that the U.S Government would not be able to buy back its dollars in gold, it made in 1972-73 an iron-clad arrangement with Saudi Arabia to support the power of the House of Saud in exchange for accepting only U.S. dollars for its oil. The rest of OPEC was to follow suit and also accept only dollars. Because the world had to buy oil from the Arab oil countries, it had the reason to hold dollars as payment for oil. Because the world needed ever increasing quantities of oil at ever increasing oil prices, the world’s demand for dollars could only increase. Even though dollars could no longer be exchanged for gold, they were now exchangeable for oil.

The economic essence of this arrangement was that the dollar was now backed by oil. As long as that was the case, the world had to accumulate increasing amounts of dollars, because they needed those dollars to buy oil. As long as the dollar was the only acceptable payment for oil, its dominance in the world was assured..http://www.oilempire.us/iran.html

2 things I should research
-the Bretton Woods arrangement-
-the House of Saud arrangement-

Read something similar to this about Iraq years ago. It's still up.. on quite a few sites.. but I'll link the cool conspiracy one.

http://www.conspiracyarchive.com/Commentary/Dollar_Iraq.htm

another .. http://www.thirdworldtraveler.com/Iraq/Iraq_dollar_vs_euro.html
It is all about oil. Thirty odd years ago, the US was presented with a golden opportunity to develop and be the world leader in alternative fuel sources and technology, but failed to do so. Current history is the result of that failure. The stakes are higher then ever before and the cost of waging wars to perserve the status quo is becoming prohibitive.

This move by Iran, although downplayed by the conservatives on this board, is certainly a significant move. Next stop Tehran?

Iran threatened this if the US pressed for sanctions. It wont have a any significant effect on our economy as their reserves are not large enough. Iraq and other regimes faced having their reserves frozen by international sanctions. Loosing access to at 25 billion dollars of money is a terrible loss to a country like Iran. As Iran anticipates such, it is trying to slowly move its investements into euro's and banks not subject to US pressure without hurting its economy.

However, oil is still traded universaly in US dollars. So despite this move Iran will always have large dollar reserves.

Don't know what any of this means but do ya'll think it could be the start of any sort of conflict between the US and Iran. I am interested in hearing everyones opinion
It's got nothing to do with the sabre-rattling on both sides of that. The Euro is simply ascending to be a more dependable currency. Iran probably did it for the same reasons as many other countries have done so.

Can someone explain to me how this could destroy the US economically
It won't.