28east

Politics, religion, and culture where East meets West

Posts Tagged ‘Euro

March 20th

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The Iranian view, from the Tehran Times (“Visions of violence in defense of the dollar“):

President Mahmoud Ahmadinejad has reiterated Iran’s willingness to resume negotiations with the Western powers and has even allowed a team of International Atomic Energy Agency inspectors to return to Iran. These inspectors may find some ambiguous, inconsequential shred of evidence, the significance of which may then be magnified to gargantuan proportions by the Western media, and held up as proof positive of the “smoking gun” confirming the existence of an Iranian nuclear weapons program. The inspectors will exit Iran and present their findings; there will be an exchange of charges and denials; ultimatums will ensue; and then Israel may make a provocative move. In an understandable and justifiable response, Iran may close the Strait of Hormuz, causing an anticipated 50% rise in crude oil prices, resulting in widespread economic havoc. Also, March 20, 2012, which is Noruz, the Iranian New Year, is the target date for the Iranian oil bourse to begin trading crude oil in currencies other than the U.S. dollar.

Meaning: On March 20th, Iran will stop trading oil in dollars entirely.

The dispute over Iran’s nuclear program is nothing more than a convenient excuse for the U.S. to use threats to protect the “reserve currency” status of the dollar. Recall that Saddam announced Iraq would no longer accept dollars for oil purchases in November 2000 and the U.S.-Anglo invasion occurred in March 2003. Similarly, Iran opened its oil bourse in 2008, so it is a credit to Iranian negotiating ability that the “crisis” has not come to a head long before now.

Europe is on the brink economic chaos due to the prudent monetary policies of the European Central Bank, which has refused to print money to buy government debt, quite unlike the U.S. Federal Reserve. Having been lured by cheap 1% bailout loans from the Fed to prevent government defaults, Europe caved in to the Zionist-inspired U.S. pressure and agreed to shoot itself in the financial foot by imposing oil sanctions on Iran, thus guaranteeing a European double-dip recession. For the U.S., however, these financial events help ensure that the euro will not pose the threat it once did to the dollar’s hegemony over oil transactions.

March 20th is also the potential date of the Greek default—pending the restructuring of a €14.5 billion bond repayment.

The possibilities are endless.

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Written by M. James

February 19, 2012 at 9:47 pm

The currency war in Iran

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To reinforce my claims in a prior post, here is William Clark on “The Real Reasons Why Iran is the Next Target”—from 2004:

The Iranians are about to commit an ‘offense’ far greater than Saddam Hussein’s conversion to the euro of Iraq’s oil exports in the fall of 2000. Numerous articles have revealed Pentagon planning for operations against Iran as early as 2005. While the publicly stated reasons will be over Iran’s nuclear ambitions, there are unspoken macroeconomic drivers explaining the Real Reasons regarding the 2nd stage of petrodollar warfare – Iran’s upcoming euro-based oil Bourse.

Candidly stated, ‘Operation Iraqi Freedom’ was a war designed to install a pro-U.S. puppet in Iraq, establish multiple U.S military bases before the onset of Peak Oil, and to reconvert Iraq back to petrodollars while hoping to thwart further OPEC momentum towards the euro as an alternative oil transaction currency.

Similar to the Iraq war, upcoming operations against Iran relate to the macroeconomics of the `petrodollar recycling’ and the unpublicized but real challenge to U.S. dollar supremacy from the euro as an alternative oil transaction currency.

But despite the fall from prominence of the Euro since the publication of the above article, Iran continues, to this day, to evade the dollar (Wikipedia outlines it well enough). For example, Iran is now “said to seek yen oil payments from India.”

Yet in the face of new sanctions, which include a ban on trading gold and silver with Iran (no surprise if this is a currency war), Iran has not yet dollarized. However, the rial’s ominous inflation rate does not bode well for its future. From Jeffrey Lewis, just yesterday (here):

Iranian President Mahmoud Ahmadinejad raised interest rates on Iranian bank deposits to up to 21 percent on January 23rd, according to the official Iranian news agency IRNA. Iran’s central bank also urged Iranians to buy U.S. Dollars only if they were traveling abroad and not to hoard them as a hedge against economic uncertainty.

The move by the Iranian central bank exacerbated the already steep plunge in the Iranian Rial, which has lost more than 50 percent of its value against the price of U.S. Dollars in the open market over the last month.

The ominous slide in the Rial began in April when the Iranian central bank decided to cut rates to a range of between 12.5 to 15.5 percent in April, prompting people to put their money in safe havens like precious metals and the U.S. Dollar. Inflation in Iran is currently running at 20 percent.

For more on the dollarization of Iran in its current context, see here.

Written by M. James

February 3, 2012 at 5:06 pm