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So... Iran has now officially dropped the dollar

 
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Little John



Joined: 08 Mar 2008
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PostPosted: Tue Apr 24, 2018 7:09 am    Post subject: So... Iran has now officially dropped the dollar Reply with quote

Wanna guess what happens next?....

https://leecamp.com/iran-drops-the-dollar-just-as-iraq-libya-did/
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johnhemming2



Joined: 30 Jun 2015
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PostPosted: Tue Apr 24, 2018 7:21 am    Post subject: Reply with quote

Its an interesting test of a hypothesis that I don't personally believe to be true.
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woodburner



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PostPosted: Tue Apr 24, 2018 8:21 am    Post subject: Reply with quote

I did see the linked page, but when I went back to it, I was forbidden axis.

Iran was at least talking about dropping the dollar back as far (or maybe further) than 2007. So what is the date on the linked page? Is this just another warmongering tactic by TPTB (or who like to think they are and can’t accept the future?
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Mr. Fox



Joined: 24 Nov 2005
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PostPosted: Tue Apr 24, 2018 10:17 am    Post subject: Reply with quote

The 'Lee Camp' one (23rd April), or the one he linked to (19th April)?

https://www.middleeastmonitor.com/20180419-iran-switches-from-dollar-to-euro/

(I'm always a bit suspicious when news outlets refer to things such as the 'Syrian regime', etc).

There's also this from IRNA on the 10th April:

http://www.irna.ir/en/News/82882665

Quote:
Iran and Turkey signed an agreement in 2017 to use local currencies in trade in order to improve economic links and make bilateral trade easier, as well as getting rid of US dollar and euro.


I couldn't find anything on FARS.
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UndercoverElephant



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PostPosted: Tue Apr 24, 2018 9:24 pm    Post subject: Re: So... Iran has now officially dropped the dollar Reply with quote

Little John wrote:
Wanna guess what happens next?....


The US is not going to start a war with Iran. It's far too risky.
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vtsnowedin



Joined: 07 Jan 2011
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PostPosted: Tue Apr 24, 2018 10:53 pm    Post subject: Reply with quote

I doubt as it matters much. As long as the US is a net importer of oil and pays for it in dollars and excepts those dollars back as payment for goods and services the sellers of the oil want or need the value of the dollar will be known and accounted for by every transaction.
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Little John



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PostPosted: Tue Apr 24, 2018 11:37 pm    Post subject: Re: So... Iran has now officially dropped the dollar Reply with quote

UndercoverElephant wrote:
Little John wrote:
Wanna guess what happens next?....


The US is not going to start a war with Iran. It's far too risky.
That depends on what they consider to be the risks to US hegemony of not starting a war in Iran. They have already set ablaze Iraq, Libya and Syria
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vtsnowedin



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PostPosted: Wed Apr 25, 2018 12:02 am    Post subject: Re: So... Iran has now officially dropped the dollar Reply with quote

Little John wrote:
UndercoverElephant wrote:
Little John wrote:
Wanna guess what happens next?....


The US is not going to start a war with Iran. It's far too risky.
That depends on what they consider to be the risks to US hegemony of not starting a war in Iran. They have already set ablaze Iraq, Libya and Syria

Where do you see a profit for the US in going to war with Iran?
Considering the cost of cruse missiles etc. And the cost of "You broke it so you own it"after action realities, to keep the Russians from getting a freebee at US expense, it is much better left alone unless they force it by attacking Israel. And even then the cost would far out weigh the benefits to anyone outside the Middle East.
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Mr. Fox



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PostPosted: Wed Apr 25, 2018 11:13 am    Post subject: Reply with quote

Has anyone come across any concise explanations (video or text) that explain how the petrodollar and US hegemony actually works?

I found this one (14 mins): https://www.youtube.com/watch?v=xNr1LWgIyiE

But I'm sure there are better ones out there...

To be honest, Rob Newmans skit on 'Dali's Magic Chequebook' is going to take some topping, in terms of simplicity, entertainment and accuracy. Cool
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fuzzy



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PostPosted: Wed Apr 25, 2018 12:13 pm    Post subject: Reply with quote

I gave up watching that as it was going nowhere. The petrodollar is a red herring as a a single factor. The starting point is there are people and businesses with huge surpluses in money in the world who want to stash it somewhere. Some of this includes trading oil. If you can buy and sell it without exchanging currencies then people will use your location for a market. If you offer tax haven perks, such as a place to trade with no/low tax, financial services and a place to hide wealth [wall st and offshore, city of london and offshore], rising real estate prices, non domicile tax status etc, then they will pour their wealth into this region. If the country gives a tough no-invasion image [perhaps by maintaining pointless armed forces that are always combat hardened by endlessly fighting around the world] and a government that is relaxed to dirty money while having pretend democracy for the locals [jersey, delaware, UK etc..], then it is the ideal place for rich world thugs. They will buy gov bonds as it is seen as stabilising a government that is less likely to lose currency value or nationalise private wealth, raise tax on foreign money etc. A demand for buying gov bonds or US treasuries reduces gov borrowing costs allowing the mess we know. Meanwhile the vast input of foreign wealth - purchasing companies, land etc. pushes up the pound value, making UK exports harder, imports cheaper, trashes manufacturing etc. [guernsey used to be a veg exporter, now it's just a funny money place and locals can't afford a house or get a normal job]. The petrodollar is just a sideshow. The Saudis buy protection from the US by 'purchasing' huge US contracts for arms etc which are presumably not delivered they are just a payment to the MIC or they are deliovered to be sent around the world to create wars. They sell oil in dollars which creates a demand for dollars to leave the US pushing up the dollar value, lowering the interest the US gov must pay to sell it's debt.
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kenneal - lagger
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PostPosted: Wed Apr 25, 2018 12:54 pm    Post subject: Reply with quote

The ability of the US to run massive trade deficits year in, year out, hangs on the position of the US dollar as the de facto world currency. As long as people require dollars to trade or as a safe store of wealth the US will be able to keep the printing presses running to bale out their massive and increasing debts. They can fund their military spending without batting an eyelid because the dollar is strong while people require it.

Once people don't need the dollar to trade oil and other commodities or they lose faith in the strength and longevity of the value of the dollar they will start to sell their dollar holdings which will cause a massive drop in its value in international trading. When the value of the dollar drops the US will not be able to keep printing the currency in order to fund continual budget deficits and there will be a recession in the US as the money supply dries up and government spending reduces.

In those circumstances the US economy then reverts to its true status of similar to the UK and PIGS economies, very week if not bankrupt. It is unlikely that the Chinese will allow this to happen just yet as they have massive dollar holding because of their trade surplus with the US.

This is one of the things that Trump is worried about and is trying to redress. Until he can do that the Chinese have the US by the short and curlies to an extent.
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adam2
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PostPosted: Wed Apr 25, 2018 2:01 pm    Post subject: Reply with quote

My view is that it matters not what currency is used for day to day purchases of oil.
All common currencies are readily exchangeable for each other, and any sensible seller of oil would accept almost any currency, knowing that that it may be easily exchanged at the prevailing exchange rate for whatever other currency is desired.
The only likely exception would a reluctance to accept near worthless currency that may depreciate before it can be exchanged for hard currency.
If I owned an oilfield I would accept any major currency as payment for my oil, having of course checked the exchange rate between the offered currency and what I desired.
I would be reluctant to accept silly money like that issued in Venezuela or Zimbabwe for fear that it would depreciate before I could change it into real money.

What is of much greater importance is what currencies individuals and governments hold (as either physical banknotes, or electronic bank deposits) as a long term store of wealth.
If enough people and governments hold US dollars long term, then those dollars are in effect taken out of circulation, and the American government can print more without adding to inflation.
At the moment this works well and has worked well for approaching a hundred years.
If however people stopped buying dollars to HOLD or even worse started selling dollars that they already owned, than a sudden crash or panic could result.

Or put another way, if Iran sells a million barrels of oil and uses the proceeds shortly afterwards to buy a house in London, then IMHO it matters not what currency is used, it soon returns to circulation (via the bank used by the estate agent in London) and was simply a short term medium of exchange.

If however Iran does not spend the money but keeps it in a bank vault, then IT DOES matter what currency is stored in the vault, though of course this might not be same currency used for the original purchase of the oil.
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emordnilap



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PostPosted: Mon Oct 08, 2018 4:56 pm    Post subject: Reply with quote

Russia wants to ditch US dollar in trade with European partners

Quote:
Russian President Vladimir Putin has backed the idea of the de-dollarization of the Russian economy. He said Washington was “making a colossal strategic mistake” by “undermining confidence in the dollar” amid Moscow’s plans to reduce the country’s dependence on the US currency in global trade.

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Potemkin Villager



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PostPosted: Mon Oct 08, 2018 6:26 pm    Post subject: Reply with quote

adam2 wrote:


If however people stopped buying dollars to HOLD or even worse started selling dollars that they already owned, than a sudden crash or panic could result.



Like China for example?
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