The Islamic Republic of Iran Kills the Dollar

[Oromia]

The end of Dollar Supremacy

12/19/2006 5:00:00 PM GMT

http://www.aljazeera.com/cgi-bin/review/article_full_story.asp?service_ID=12635

 

The U.S. Dollar Dominance is Coming to an End

 

 

The Iranian government has finally developed a new weapon that can destroy the financial system underpinning the American Empire. The U.S. dollar dominance is coming to an end.

 

A hundred years ago the U.S. currency’s dominance was refered to as “dollar diplomacy”. After the end of the Second World War, and the fall of the Soviet Union in 1989, that policy evolved into “dollar hegemony.”

 

But after all these many years of great success, this “diplomacy” or “hegemony” seems to be coming to an end soon.

 

Iran announced yesterday ordering the central bank to direct foreign transactions and transform the state's dollar-denominated assets held abroad to the single European currency instead of the U.S. currency.

 

"The government has ordered the central bank to replace the dollar with the Euro to limit the problems of the executive organs in commercial transactions," government spokesman Gholam Hossein Elham told reporters.

 

The switch will include not only in the budget but also foreign as well as oil trade, and assets abroad, ending Iran's dollar dependence.

 

“Some banks abroad are also willing to go Euro in dealing with us and there is no problem if some others want to do business in other exchanges based on their preference,” said governor of the Central Bank of Iran (CBI), adding that the country’s FRF stands at $10 billion, indicating a 35 percent growth over last year.

 

It has been said that he who holds the gold makes the rules.

 

Will other oil producing countries in the Middle East, members of The Organization of Petroleum Exporting Countries (OPEC), follow the suit?

 

A switch by OPEC members from the U.S. currency to the Euro could enhance the value of the Euro, the new official currency of the European Union (EU) which first came into existence on Jan. 1, 1999, further, ending the U.D. Dollar supremacy.

 

And despite a claim by Monica Fan, currency strategist at RBC Capital Markets’ that the news from Iran had little impact on the market "as it had already been announced by the Finance Minister on Dec. 4 and an estimated 70% of Iran's $45.5 billion reserves are already held in non-dollar assets," the impact of Iran’s move on the dollar has immediately been felt.

 

Yesterday the dollar was slightly lower against its major counterparts, reversing early gains.

 

Fan however, warned that the "more bearish effect" from Iran is that "the market will suspect this is the precursor to similar moves by other Middle Eastern governments".

 

Combined, the foreign-exchange reserves of Libya, United Arab Emirates, Saudi Arabia, Egypt, Lebanon, Kuwait, Yemen, Jordan, Qatar, Oman and Bahrain carry a total of about $170 billion, Fan said, according to MarketWatch.

 

A day before Iran announced converting its dollar-denominated assets held overseas into Euros, Sultan Nasser al-Suweidi, the United Arab Emirates' central bank governor, said that "we're waiting for a clear trend to emerge before converting our reserves into Euros or any other currency."

 

The bank holds 98% of its reserves in greenbacks but plans reducing its dollar holdings to between 50% and 90%.

 

Analysts aroused fears over Iran’s move, warning it would prompt another U.S. war in the region. When other countries, like Iran, sought payment of oil in other currencies, most notably Euro, the punitive action was in order.

 

The American President George W. Bush's Shock-and-Awe in Iraq was not about Saddam's nuclear ambitions, or the alleged link to Al Qaeda network which the U.S. blames for September 11 attacks, it’s about defending the dollar, and setting an example that anyone who seeks payment for oil in currencies other than U.S. Dollars, which is what Saddam did in 2000, would be likewise punished.

 

But if the U.S. decided to commit the same mistake it made in Iraq again; i.e. invading Iran, it will definitely bring an end to its political hegemony not just the hegemony of its currency, in the region and the world.

 

History teaches that an empire should go to war for either defending itself or benefiting from war; otherwise, as Paul Kennedy stated in his The Rise and Fall of the Great Powers, "a military overstretch will drain its economic resources and precipitate its collapse".

[General Duke]

A good move, but should they not work on an alternative currency to the wests, moving from dollar to euro means nothing.

[Oromia]

For somebody like you, who's got a complete grasp of the obvious but nothing else, it means nothing.

[General Duke]

^^^What does it mean That you move from the American dollar to the European Euro?Other than you are still in the hands of the west.

 

Oh I forgot who, I was exchanging views with.

[Oromia]

That's why I said you are a simpleton. You forget too easily.

[General Duke]

^^^insults aside, are the europeans not in on it with the US? Your view point is as simplistic as if this would make any real different aoart from getting Washingtons attention.

[Oromia]

Iran seeking Washington's attention ?! When you've got nothing to say, it's a virtue to say nothing.

[General Duke]

^^^lol. They dont want Washingtons attention? Your ignorance is as vast as the oceans.

[Somali_Friend]

Originally posted by General Duke:

^^^lol. They dont want Washingtons attention? Your ignorance is as vast as the oceans.

lol

 

General,

Actually the families that own the american and british even many european central banks are the same families.

 

This is like you take your cashiers paper and you are choosing checkout kiosks/lines at walmart.

 

Unless the saudi and russia are involved anything with oil has less meaning.

Unless Iran goes to gold or some other creation the impact is minimal.

 

Iran has to open the bourse if they really want to use their muscle in trade.

[king_450]

Now USA will really go to war . The war in Iraq really was about Sadam refusing to trade or exchange US Dollar instead choose to use Euro and look what is happening to Iraq, Now the same will happen to Iran.

[Oromia]

Originally posted by king_450:

Now USA will really go to war . The war in Iraq really was about Sadam refusing to trade or exchange US Dollar instead choose to use Euro and look what is happening to Iraq, Now the same will happen to Iran.

But Iraq was at its weakest when invaded though still trashing them. Iran is robust and much stronger than ever. Don't think they will dare to attack Iran.