Iran Officially Ditching The Petrodollar

[Y_Participant 4591]

Iran Officially Ditching The Petrodollar

The Iranian government announced it would stop using the U.S. dollar “as its currency of choice in its financial and foreign exchange reports,” the local Financial Tribune reported. This means ‘bye bye petrodollar’ for Iran.

Iran governor Valiollah Seif’s central bank announced the decision in a television interview on January 29th 2017.

The change will take effect on March 21st 2017, and it will impact all official financial and foreign exchange reports.

Despite the country’s decision to halt the use of the U.S. dollar as its base currency for exchange with other nations, Iran’s top export is oil. In the global markets, oil is mainly purchased and sold in U.S. dollars. This fiscal year, Iran is expected to earn $41 billion from oil sales, with countries like the United Arab Emirates (UAE) and China as their top clients.

It is still uncertain how the country will fully manage to switch currencies to its trade partners without relying on the US dollar. This will bear close scrutiny by the market, trade partners and investors.

It is possible Tehran may start selling oil for gold-backed yuan as well to China. This would be a great advantage for the Iran oil deal.

The use of the dollar from the early 1970’s as a standard currency for oil exchange was accepted by Saudi Arabia and the remaining block of Organization of the Petroleum Exporting Countries (OPEC), which include Iran and 11 other Middle Eastern, African, and South American countries.

OPEC countries account for 42% of global oil production, holding 73% of the world’s oil reserves. Due to its influence, the use of the U.S. dollar as its standard currency helps to keep demand for the U.S. dollar high, giving the currency the support it requires to remain “the world’s reserve currency” and preventing the effects of inflation from hitting the U.S. consumer.

Iran has been preparing this for some time now – so it seems.

With Syria now stable and Russia-Tehran-Damascus and even Ankara agreeing to a ceasefire plan in recent months, and with Donald Trump moving away from further military confrontation in the Mid-East – the timing for Iran to leave the Petrodollar club does not appear to be surprising or unplanned.

Iran’s oil contracts in euros already include signed deals in Feb 2016 with French Total, Russia’s Lukoil and Spanish Cepsa, an unnamed source in state-owned National Iranian Oil Company told Reuters

Iran and India had announced in Jan 2016 that they intend to settle all outstanding crude oil payments in rupees, as part of a joint strategy to dump the dollar and trade instead in national currencies

Iran’s decision will impact the U.S. economy and lessen the dollar value as the reserve currency, possibly prompting the U.S. government to take measures to combat Iran’s actions. After all, Iran holds 13% percent of OPEC’s oil reserves.

In the recent past direct US military action against Iran would have been Standard Operating Procedure. Western financial elites need the petrodollar system and they are willing to use measures of last resort, even military campaigns, to protect the status quo.

Saddam Hussein began selling oil in euros and we know what happened to Iraq after 2001.

A similar fate awaited Libya’s late leader Muammar Gaddafi, who was killed after a NATO-led intervention threw the country into chaos. Gaddafi was a staunch advocate of introducing a new currency, the gold dinar, to rival the US dollar and the euro. Gaddafi was executed not long after in a US Special Forces raid planned by the former US Secretary of State Hillary (Bitch) Clinton.

“Iran is trying to make its relationship with the US and the world more amiable than it has been in recent past. However, at the same time Iran does not want the US to become any stronger. This is really a chess game the Iranians are playing vis-à-vis the US,” Director of the International Dialogue Foundation in London noted.

This is the US neo-con regime in Washington trying to keep the petrodollar afloat….

Citation
http://www.zerohedge.com/news/2017-02-02/iran-just-officially-ditched-dollar
https://sputniknews.com/business/201602081034387238-iran-oil-us-dollars/

[PistolPeteParticipant 27143]

Holy s~~~! You know the real reason we took out Sadam Hussien was because he threatened to do the same thing.

And if the dollar crashes China will be in big trouble since they hold billions of dollars. They better put the kibosh on this!

[Y_Participant 4591]

Iran timed it well – too well in fact. I see Putin’s and Xi’s (China) hands in this. For real. This bears further investigation.

[PistolPeteParticipant 27143]

True, Russia and China were thinking about dumping the petro-dollar a couple of years ago but even they backed off. Still if the dollar crashes China will take a big hit.

[Y_Participant 4591]

Actually I believe China is hoping for a USD crash, They have problems keeping the US dollar peg and spent 1 trillion the last three years defending the yuan. They have only another 1 trillion left in USD liquid Forex reserves – then by the end of this year they will be broke if they do not devalue the yuan. They have 40 trillion in bank debt behind closed doors partly because of holding the peg.

So they will have to devalue anyway by more than 10% – it is only a matter of time. Which will most likely crash the US stock markets. The last time in 2015 Oct when they devalued 3% the Dow fell 11%.
The Fed was able to save the day. This time? No one knows for sure.

If the USD weakens first then China can devalue the yuan and re-peg without penalty. This type of deal happened before under Obama. They get out of jail then

At the moment I don’t think a USD crash is likely with Iran switching – but a weakening for sure. This may be to help China on the side. By China’s instigation? Possibly.

[PistolPeteParticipant 27143]

I didn’t know that–and hadn’t looked at it from that angle—makes a lot of sense.

[Repulsive RalfParticipant 356]

Might be time for America to kill some of its own citizens, blame it on Iran to give the excuse to start another war, usually works. Maybe use one of those missing suitcase nukes they keep at the Israeli Embassy.

[Y_Participant 4591]

PistolPete wrote:

I didn’t know that–and hadn’t looked at it from that angle—makes a lot of sense.

I posted this scenario in my topic ‘US Pivot to China – The Impossible Trinity’. Apologies if it is too technical but the replies in that topic between Feral and I discussing this point should be more helpful.

[Y_Participant 4591]

Repulsive Ralf wrote:

Might be time for America to kill some of its own citizens, blame it on Iran to give the excuse to start another war, usually works. Maybe use one of those missing suitcase nukes they keep at the Israeli Embassy.

Actually during the Syria war the US fired cruise missiles at Damascus.
These were shot down by Russian anti-missile S300 systems. Russia warned the US in effect that a strike on Damascus was a strike on Moscow. Israel had to take the blame for the downed missiles as a ‘test firing’.

Russia is very serious about Syria and more so Iran.

[Jan SobieskiParticipant 28791]

I understood that China was using dollars to buy gold.

IIRC, lybia was brought down because Quadffi wanted to accept non dollars.

Love is just alimony waiting to happen. Visit mgtow.com.

[narwhalParticipant]

I’m not going to understand how all this works, but the US oil is about to have a very good season. Everything Trump is doing is going to help everyone involved.

– Corporate taxes lowered
– Regulations diminished
– Pipeline projects approved…and faster.

It’s not been announced yet, but not hard to envision a tariff on oil imports. Meaning it becomes a lot more feasible to produce our own oil.. and export more. Meaning more money staying at home. Meaning less dependency on foreign oil and desire to control the middle east. And yes, higher gas prices, but more incentive to look into fuel efficiency and alternative energy.

I’m not saying Iran’s move won’t hurt us, but can you imagine the potential damage if Obama was still our President?

Ok. Then do it.

[Y_Participant 4591]

Jan Sobieski wrote:

understood that China was using dollars to buy gold.

IIRC, lybia was brought down because Quadffi wanted to accept non dollar

Yes China is doing that but not with Forex cash reserves. Usually they sell US treasuries (which is just US debt notes) for gold. A lot of gold is bought by private (if you can call it that) investors and banks.

Yes- Libya was finished for that reason.

[Y_Participant 4591]

narwhal wrote:

Everything Trump is doing is going to help everyone involved.

– Corporate taxes lowered
– Regulations diminished
– Pipeline projects approved…and faster.

Sorry – Trump can do this only by printing paper money like never before. Watch out – helicopter money is coming to the US of A!!
People think 20 trillion debt + inflation is bad now?
Wait till Trump gets going.

[PistolPeteParticipant 27143]

narwhal wrote:

I’m not going to understand how all this works,

Its actually not very complicated. When Nixon took us of the gold standard the dollar was no longer backed by gold—instead it was backed by oil. This meant any country purchasing oil had to do so with dollars. Thus they had to buy dollars with their own currency in order to buy the oil. This obviously makes the dollar “valuable” artificially.

IF one doesn’t have to buy dollars to purchase oil then what happens to the value of the dollar?

BOOM is what happens.And Jan is right about Libya. That was the real reason behind his downfall and ass-f~~~, and shot in the head etc etc.

[Freeman_KParticipant 3524]

Brexit, Trump, record levels of monetary supply, global instability, peak oil, Le Pen potentially premier in France, European refugges problems and again Trump with his halt on free trade while interest rates are record low for almost a decade but still enabling only feeble gdp growth made me realize i see major problems down the road. And i am putting my money where my mouth is.

The choices we make, not the chances we take, determine our destiny

[Y_Participant 4591]

narwhal wrote:

’m not going to understand how all this works, but the US oil is about to have a very good season. Everything Trump is doing is going to help everyone involved.

One more thing – I’m glad you’re discussing this with us. No offence and forgive me for saying this – but I have a feeling that you have not fully captured the USD as the Reserve Currency or the Fed printing of fiat currency. If you could do that the rest will become clear on why there is a big problem and why Trump cannot fix it.

Keep posting!

[PistolPeteParticipant 27143]

OH my God don’t EVEN get me started on quantitative easing by the FED. Now there is a bomb ticking away and Trump can’t defuse it!

[narwhalParticipant]

PistolPete wrote:

This meant any country purchasing oil had to do so with dollars

I’m not following that exactly. Since Iran is deciding not to do that anymore.

PistolPete wrote:

IF one doesn’t have to buy dollars to purchase oil then what happens to the value of the dollar?

I don’t know. I understand some basics about macro economics, and that high circulation of the dollar is good, but I’m not quite seeing how removing the dollar from exchanges in oil purchases would hurt the value of the dollar. Call it my ignorance.

Y_ wrote:

Sorry – Trump can do this only by printing paper money like never before. Watch out – helicopter money is coming to the US of A!!
People think 20 trillion debt + inflation is bad now?
Wait till Trump gets going.

Only? You don’t see how his actions are going to help everyone (in the US) involved with the oil and gas industry. I think you reviewing to the US economy in general, but I’d still disagree. Trump’s actions have been about reducing useless spending, and cutting off the outflow of money out of the US. Unless you manage to drop consumer spending in the process, isn’t that a good thing for the economy? How is that going to drive inflation?

Maybe that’s a rhetorical question. Again, I don’t pretend to be an economist, just not making much sense to me.

Ok. Then do it.

[narwhalParticipant]

Y_ wrote:

narwhal wrote:

’m not going to understand how all this works, but the US oil is about to have a very good season. Everything Trump is doing is going to help everyone involved.

One more thing – I’m glad you’re discussing this with us. No offence and forgive me for saying this – but I have a feeling that you have not fully captured the USD as the Reserve Currency or the Fed printing of fiat currency. If you could do that the rest will become clear on why there is a big problem and why Trump cannot fix it.

Keep posting!

Not the least bit offended, I freely admit my ignorance and perhaps naivety. To be perfectly honestly, I’m not sure I even want to fully understand….for reasons I don’t quite understand…if that makes any sense.

Maybe I just don’t want the economic red pill. :shrug:

Ok. Then do it.

[Anonymous 0]

Gold. Buy physical gold.
Silver. Buy physical Silver.
Stick it away in a safe place.
And wait!
When the SHTF, you will have enough to live on.

[Author]

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