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Iranian Oil Bourse "not Important"

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If a barrel of oil is valued at source in Euros and your dollar has tanked that day against the Euro, gonna cost you a lot more to buy the same barrel of oil surely?

But oil is not valued at source, it's valued in the market. And the market price of oil doesn't depend on what currency you're buying it in. If oil is priced in dollars and the euro appreciates against the dollar, the price will go up a bit. If it's priced in euro and the euro appreciates, the price will fall a bit. The amount you pay, either in euro or in dollars, will be the same either way.

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This is an article pointing out the economic insignificance of the proposed Iranian Oil Bourse:

http://www.energybulletin.net/12255.html

Seems reasonable to me. Other comments?

Odd how the editorial seems to add some weight to a counter article a few days ago.

http://energybulletin.net/12125.html

Who can you trust? One has sat on the board of the fed and the other wants to fck the fed.

I've yet to really understand what to make of all this. At least we're armed with information that might make sense of whatever happens after April.

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Good find mate, lets see how popular this thread becomes in relation to the clamour for extrapolation and discussion previously connected with the iranian oil bourse and the "demise" of civilisation. I suspect that without any doom and gloom to salivate over this thread will soon be on to page 2 or 3 of the discussion forum and lost in the midst of posts by this evening.

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This is an article pointing out the economic insignificance of the proposed Iranian Oil Bourse:

http://www.energybulletin.net/12255.html

Seems reasonable to me. Other comments?

Most important part of that article for me was

"And even if the oil were purchased with dollars drawn on a U.S. bank, there is no reason at all that the seller needs to retain the proceeds in that form. Those selling oil could convert those dollars back to euros or Japanese yen or whatever their hearts desired, and likewise could convert euros obtained through sales on an Iranian bourse back into dollars, if they wished"

So the sellers have a powerfull tool. To forward thier interest whereever it may lie (I'm not prejudiced about where that is and weather they will show thier hand by playing long every time.)

I feel USD is undervalued, Recent weak USD has also shieled us from part of the energy inflation cost.

If the dollar stays here or weakens then climate stays much the same.

BUT IF all expect USD to fall but those oil sellers chose to buy USD knowing they have been loading up on the cheap then public may feel a double whammy of energy spike due to geopolotics and if at the same time USD rallies giving a plausible trigger to IR rises and Media scapegoat for HPC. Then Panic Buying in strenghening USD may result enableing huge demand for current dollor holder to off load into.

I do not know if such a scam is operating. But it would not be without precedent in the history of finance if it were.

Notice how the pervasive anti-american (foriegn policy not working regular people) sentiment prvides such a fertile wanting mental state for many to BELIEVE in a USD demise (cos they want US empire to end). Perfect conditions for the AVERAGE* market participant to Sell USD to cheap.

*Average by number not by intelect or information or money.

What will this average market participant do if they got it wrong they will clamour to buy.

These are not predictions just a senario.

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Iran is acting completely irrationally anyway, just last week they were liquidating their Euro assets because of fear of sanctions. See it from their point of view, which is it to be, the infidel dollar or infidel euro?

Just confirms what we were saying a while back.

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Let's suppose that all oil had to be bought in MarkBucks, which I create by writing a dollar sign on a piece of paper. Do you really think that I wouldn't immediately become immensely rich for doing nothing? And if people were then given the option of buying oil in their native currency, don't you think that I'd suddenly become very poor?

Why is it so difficult to figure out that requiring dollars to buy oil is a major support for the US dollar?

See it from their point of view, which is it to be, the infidel dollar or infidel euro?

Better yet, how about gold?

Edited by MarkG

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Let's suppose that all oil had to be bought in MarkBucks, which I create by writing a dollar sign on a piece of paper. Do you really think that I wouldn't immediately become immensely rich for doing nothing? And if people were then given the option of buying oil in their native currency, don't you think that I'd suddenly become very poor?

Why is it so difficult to figure out that requiring dollars to buy oil is a major support for the US dollar?

Better yet, how about gold?

I posted in relation to this topic a few days ago in the middle of another thread. No response to that. I'll post it again:

I also visit a forum at www.forexfactory.com

There is a small debate about Iran and the Petro dollar/euro.

thread here: http://www.forexfactory.com/forexforum/sho...69&page=1&pp=15

One argument against the dollar doomsday theory within that thread:

QUOTE

I think this argument defies all economic reason. I had already heard something along the lines that the real reason for invading Irak was that Saddam allegedly threatened to only receive euros for selling oil. Now, I don't know if he actually said this, but I'm almost certain that even if he had, the impact on the dollar would have been minimum, at most.

Why?

* Oil trade is less than 5% of the total world trade.

* There is currently no "international law" that forces companies to buy oil in dollars. If Exxon wants to buy 1 million barrels of oil from some Saudi prince, upon mutual agreement, they can make the exchange in dollars, euros, paraguayan pesos, or pork belly futures. The "bourses" are either for speculators, hedgers, or to accomodate excess demand of oil. Why would a big company that buys millions of barrels per years be bothered with going through an exchange and pay commisions to brokers or agents? They agree a supply with their preferred oil extraction company; and, if they find they need more oil (or have excess), then they do go to the bourse.

* The "power of the dollar" comes more from its use as a store of value rather than as a medium of exchange. Let's assume we're forced to buy oil in dollars (which is not the case). So what? If I don't like dollars, I will have my savings in yuans, and exchange a fraction for dollars only when I need oil. If the OPEC doesn't want dollars, they will exchange it for zlotys as soon as they receive them in exchange for the oil.

Anyway, it's a good idea for them if they want to establish this bourse. They will probably obtain big profits from it, just as with any other bourse. But will it affect the dollar? Don't think so.

END QUOTE

Im just playing devils advocate. But so what if the dollar goes from GBP 1.70's to GBP + 2.00 ?? It's been there before, and with big defecits (Reagan). I think this "end of fiat money" stuff is way over the top, and those spouting it tend to have a 'vested interest' as they hold some gold and would like it to be worth a lot more.

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Iran’s Oil Exchange threatens the Greenback

by Mike Whitney

http://www.opednews.com

The Bush administration will never allow the Iranian government to open an oil exchange (bourse) that trades petroleum in euros. If that were to happen, hundreds of billions of dollars would come flooding back to the United States crushing the greenback and destroying the economy. This is why Bush and Co. are planning to lead the nation to war against Iran. It is straightforward defense of the current global system and the continuing dominance of the reserve currency, the dollar.

The claim that Iran is developing nuclear weapons is a mere pretext for war. The NIE (National Intelligence Estimate) predicts that Iran will not be able to produce nukes for perhaps a decade. So too, IAEA chief Mohammed ElBaradei has said repeatedly that his watchdog agency has found “no evidence” of a nuclear weapons program.

There are no nuclear weapons or nuclear weapons programs, but Iran’s economic plans do pose an existential threat to America, and not one that can be simply brushed aside as the unavoidable workings of the free market.

America monopolizes the oil trade. Oil is denominated in dollars and sold on either the NYMEX or London’s International Petroleum Exchange (IPE), both owned by Americans. This forces the central banks around the world to maintain huge stockpiles of dollars even though the greenback is currently underwritten by $8 trillion of debt and even though the Bush administration has said that it will perpetuate the deficit-producing tax cuts.

America’s currency monopoly is the perfect pyramid-scheme. As long as nations are forced to buy oil in dollars, the United States can continue its profligate spending with impunity. (The dollar now accounts for 68% of global currency reserves up from 51% just a decade ago) The only threat to this strategy is the prospect of competition from an independent oil exchange; forcing the faltering dollar to go nose-to-nose with a more stable (debt-free) currency such as the euro. That would compel central banks to diversify their holdings, sending billions of dollars back to America and ensuring a devastating cycle of hyper-inflation.

The effort to keep information about Iran’s oil exchange out of the headlines has been extremely successful. A simple Google search shows that NONE of the major newspapers or networks has referred to the upcoming bourse. The media’s aversion to controversial stories which serve the public interest has been evident in many other cases, too, like the fraudulent 2004 presidential elections, the Downing Street Memo, and the flattening of Falluja. Rather than inform, the media serves as a bullhorn for government policy; manipulating public opinion by reiterating the specious demagoguery of the Bush administration. As a result, few people have any idea of the gravity of the present threat facing the American economy.

This is not a “liberal vs. conservative” issue. Those who’ve analyzed the problem draw the very same conclusions; if the Iran exchange flourishes the dollar will plummet and the American economy will shatter.

This is what author Krassimir Petrov, Ph.D in economics, says in a recent article The Proposed Iranian Oil Bourse:

“From a purely economic point of view, should the Iranian Oil Bourse gain momentum, it will be eagerly embraced by major economic powers and will precipitate the demise of the dollar. The collapsing dollar will dramatically accelerate U.S. inflation and will pressure upward U.S. long-term interest rates. At this point, the Fed will find itself between …between deflation and hyperinflation-it will be forced fast either to take its "classical medicine" by deflating, whereby it raises interest rates, thus inducing a major economic depression, a collapse in real estate, and an implosion in bond, stock, and derivative markets, with a total financial collapse, or alternatively, to take the Weimar way out by inflating, whereby it pegs the long-bond yield, raises the Helicopters and drowns the financial system in liquidity, bailing out numerous LTCMs and hyperinflating the economy.

No doubt, Commander-in-Chief Ben Bernanke, a renowned scholar of the Great Depression…, will choose inflation. …The Maestro has taught him the panacea of every single financial problem-to inflate, come hell or high water. …To avoid deflation, he will resort to the printing presses…and, if necessary, he will monetize everything in sight. His ultimate accomplishment will be the hyperinflationary destruction of the American currency …”

So, raise interest rates and bring on “total financial collapse” or take the “Weimar way out” and cause the “hyperinflationary destruction of the American economy.”

These are not good choices, and yet, we’re hearing the same pronouncements from right-wing analysts. Alan Peter’s article, “Mullah’s Threat not Sinking In”, which appeared in FrontPage Magazine.com, offers these equally sobering thoughts about the dangers of an Iran oil-exchange:

“A glut of dollar holdings by Central Banks and among Asian lenders, plus the current low interest rate offered to investor/lenders by the USA has been putting the dollar in jeopardy for some time… A twitching finger on currency's hair-trigger can shoot down the dollar without any purposeful ill intent. Most estimates place the likely drop to "floor levels" at a rapid 50% loss in value for a presently 40% overvalued Dollar.”

The erosion of the greenback’s value was predicted by former Fed-chief Paul Volcker who said that there is a “75% chance of a dollar crash in the next 5 years”.

Such a crash would result in soaring interest rates, hyperinflation, skyrocketing energy costs, massive unemployment and, perhaps, depression. This is the troubling scenario if an Iran bourse gets established and knocks the dollar from its lofty perch. And this is what makes the prospect of war, even nuclear war, so very likely.

Peter’s continues:

“With economies so interdependent and interwoven, a global, not just American Depression would occur with a domino effect throwing the rest of world economies into poverty. Markets for acutely less expensive US exports would never materialize.

The result, some SME's estimate, might be as many as 200 million Americans out of work and starving on the streets with nobody and nothing able to rescue or aid them, contrary to the 1920/30 Great Depression through soup kitchens and charitable support efforts.”

Liberal or conservative, the analysis is the same. If America does not address the catastrophic potential of the Iran bourse, Americans can expect to face dire circumstances.

Now we can understand why the corporate-friendly media has omitted any mention of new oil exchange in their coverage. This is one secret that the boardroom kingpins would rather keep to themselves. It’s easier to convince the public of nuclear hobgoblins and Islamic fanatics than to justify fighting a war for the anemic greenback. Never the less, it is the dollar we are defending in Iraq and, presumably, in Iran as well in the very near future. (Saddam converted to the euro in 2000. The bombing began in 2001)

There are peaceful solutions to this dilemma, but not if the Bush administration insists on hiding behind the moronic deception of terrorism or imaginary nuclear weapons programs. Bush needs to come clean with the American people about the real nature of the global energy crisis and stop invoking Bin Laden and WMD to defend American aggression. We need a comprehensive energy strategy, (including government funding for conservation projects, alternative energy-sources, and the development of a new line of “American-made” hybrid vehicles) candid negotiations with Iran to regulate the amount of oil they will sell in euros per year (easing away from the dollar in an orderly way) and a collective “international” approach to energy consumption and distribution (under the auspices of the UN General Assembly)

Greater parity among currencies should be encouraged as a way of strengthening democracies and invigorating markets. It promises to breathe new life into free trade by allowing other political models to flourish without fear of being subsumed into the capitalist prototype. The current dominance of the greenback has created a global empire that is largely dependent on debt, torture, and war to maintain its supremacy.

Iran’s oil bourse poses the greatest challenge yet to the dollar-monopoly and its proponents at the Federal Reserve. If the Bush administration goes ahead with a preemptive “nuclear” strike on alleged weapons sites, allies will be further alienated and others will be forced to respond. As Dr. Petrov says, “Major dollar-holding countries may decide to quietly retaliate by dumping their own mountains of dollars, thus preventing the U.S. from further financing its militant ambitions.”

There is increasing likelihood that the foremost champions of the present system will be the one’s who bring about its downfall

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When is the Iranian bourse due to open? I heard it would be in March , is that correct?

Do you think the bourse will result in a strengthening of the Euro on the currency markets?

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Randall Herbert

Fantastic post and I’ve been trying to warn people about PetroDollars for the past few months and I only got on to this topic as I researched the events of 9-11. That faked attack came just as the worlds biggest economy was heading south, perfect timing.

Bush is best friends with the bin-ladens, it’s no secret and dates back to GWB getting kicked out of the US Army on the same day as his friend, Bin-Laden’s accountant Bit strange that the bin-ladens in the united states where allowed to fly out the USA long before anyone was allowed to fly after 9-11. Did no one want to ask them some questions. What about the meeting between Bush and Bin-Ladens the day before the attack

To this day the Bin-Laden family is profiting from the war because Bush ensure they get lucrative construction contracts. Bush and Bin-Laden are brothers in armies, one plays good cop and one plays bad cop.

Saudi Royals hold power against the wishes of the Saudi people so bush helps protect them with the US army and this is paid for by US taxes, if the Saudi people rise up then the king pin holding it all together is removed and that’s another way America will be forced to take it’s medicine.

bushsaudi.jpg

You can find links to all the points I raised above on the internet but if you get stuck then ask me and I’ll help.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
      • up 2.5%
      • up 5%



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