Hold Onto Your Camels Boys

[Borodog]

Here comes Uncle Sam: Iran Moves to Ditch US Dollar.

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WASHINGTON, Sept. 10 (UPI) -- Faced with U.S. economic sanctions and a weak dollar, Tehran is demanding foreign energy companies do business in yen and euros, despite increasingly desperate need for investment.
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In a deal announced last week, Japan’s Nippon Oil agreed to buy oil from Iran using yen instead of the traditional U.S. dollars. The agreement comes after years of Iranian efforts to shift its petroleum exports away from dollars and toward yen and euros.

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[ZeroPointMachine]

This should help:

Iran Linked to Irag Rocket Attack

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U.S. military officials in Iraq tell ABC News that a rocket used in an attack on coalition headquarters at Camp Victory Tuesday was made in Iran.

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[Bump_Bailey]

I think Saddam wanted to do the same thing, it didn't work out too well for him though.

[2/325Falcon]

Old news.

[Taso]

Can someone give us the implications here for our relationship with Iran, and the effect this will have for Americans? I'm not as smart as you fellas.

[tolbiny]

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Can someone give us the implications here for our relationship with Iran, and the effect this will have for Americans? I'm not as smart as you fellas.

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We invade Iran.

[iversonian]

And exactly which Democratic presidential candidate is it that you suggesting would see this one through after he's installed in 16 months?

[Borodog]

[ QUOTE ]
And exactly which Democratic presidential candidate is it that you suggesting would see this one through after he's installed in 16 months?

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LOL!

Any of them.

[Moseley]

[ QUOTE ]
And exactly which Democratic presidential candidate is it that you suggesting would see this one through after he's installed in 16 months?

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The democrats will not win the election. I've already given the name of the next president in a previous post, however, I'll repeat it here: Thompson.

You can save this post, and rub it in my face in 09 if you think I'm wrong.

If the repubs in CA get their way and break up the CA electoral, it will be a slam-dunk.

[Copernicus]

At least at the top level the maximum impact doesnt seem that great. There may be feedback loops that make the results worse.

Here are some rough numbers:

Annual global oil sales, 1 trillion USD, maybe 700 billion Non-US, which is about 58 billion per month.

Coincidentally the US trade deficit, which results in net outflow of US dollars, is also about 58 billion per month. Thus if there were a one to one match in countries and no timing issues, enough dollars are received into their economies as they need to buy oil using dollars.

USD held by foreign countries is about $2 trillion. Obviously less than 700 billion of that is related to oil purchases, and its likely to be much less than 700 billion. Given the above, how much would those reserves shift to Euros even if all oil sales shifted to Euros, even if the entire world wanted to stifle the US economy through adoption of the petroeuro?

Further reducing the impact is the self-interest of our trade partners, which, unless a gun is held to their heads, would keep them from actions that would cripple the US economy. It is largely a global economy, and recession/depression in the US will quickly spread to the rest of the world. China's economy depends on the US, (and as a result their dollar reserves are the largest in the world) and crippling the US would cripple them. Japan and Europe arent quite as dependent on the US, but they are also somewhat dependent on China, so there is no question that crippling the US economy would similarly cripple a large portion of the world economy. Thus the likelihood of a wholesale move to a petroeuro is highly unlikely...barring the gun to the head.

Now lets say there is a gun to their heads. Knowing that a severe threat by Iran to the US economy would lead to US military action, which we would not hold back on even with a Democratic administration, where do the allegiances of our trading partners wind up? I would expect a very solid coalition to move against Iran. Is Ahmadinejad that crazy? Are Iranians crazy enough to not overthrow him with that kind of threat over their heads?

So far its maan, but Dcifrths could convince me otherwise.