Iran a ticking time bomb

[paynes1]

The Iran bourse will soon be open for business.
http://www.iranian.ws/iran_news/publish/article_15158.shtml

Iran oil bourse next week
Apr 26, 2006
Oil Minister Kazem Vaziri Hamaneh said on Wednesday that the establishment of Oil Stock Exchange is in its final stage and the bourse will be launched in Iran in the next week.

This is not good because of dammage to the dollar it could do.

Their are others that think it will do nothing to our currency.
http://www.atimes.com/atimes/Middle_East/HC10Ak01.html

The argument by those who believe the Tehran oil bourse would be the casus belli, the trigger pushing Washington down the road to potential thermonuclear annihilation of Iran, seems to rest on the claim that by openly trading oil to other nations or buyers in euros, Tehran would set into motion a chain of events in which nation after nation, buyer after buyer, would line up to buy oil no longer in US dollars but in euros. That, in turn, goes the argument, would lead to a panic selling of dollars on world foreign-exchange markets and a collapse of the role of the dollar as reserve currency, one of the "pillars of Empire". Basta! There goes the American Century down the tubes with the onset of the Tehran oil bourse.

Many countries have already put some or all of their reserves into the euros or gold and silver. These countries include China,Russia,Syria,Lebanon,Venezula, SaudiArabia, and of course Iran.
The can not be good to see countries already switching their reserves.

[investindinar]

The argument by those who believe the Tehran oil bourse would be the casus belli, the trigger pushing Washington down the road to potential thermonuclear annihilation of Iran, seems to rest on the claim that by openly trading oil to other nations or buyers in euros, Tehran would set into motion a chain of events in which nation after nation, buyer after buyer, would line up to buy oil no longer in US dollars but in euros. That, in turn, goes the argument, would lead to a panic selling of dollars on world foreign-exchange markets and a collapse of the role of the dollar as reserve currency, one of the "pillars of Empire". Basta! There goes the American Century down the tubes with the onset of the Tehran oil bourse.

Many countries have already put some or all of their reserves into the euros or gold and silver. These countries include China, Russia, Syria, Lebanon, Venezula, SaudiArabia, and of course Iran. [It] cannot be good to see countries already switching their reserves.

I honestly don't think that if and when Iran goes up in smoke thanks to US/Israeli intervention it will be due to the Iranian Oil Bourse. However, I do consider it to be a contribution factor to the state of tensions between the US/Israel and Iran. If nothing else, this situation also serves to underscore the importance of maintaning a strong US military in view of the precarious situation that the US and its closest allies find themselves in today - the ever present threat of international terrorism, not for the purpose of artificially propping up the dollar. So, if Iran feels like they're being intimidated, it's because of statements made by their national leadership, not the ever threatening possibility of a successful debut of the always promised, but never appearing, Iranian Oil Bourse.

However, American military strength does have a bearing on the relative strength of the dollar vis a vis other hard currencies. If it were not for overwhelming US supremacy in all aspects of war making capability, and a national willingness to intimidate would be aggressors, does anybody really think that the dollar would be as strong as it is today? It's being indirectly supported by a second to none military machine that can hammer any nation on this earth into oblivion. Is that good? Yes, of course it is. Americans can sleep safely at night knowing that we could pound any would be adversary into dust in a matter of hours, if not minutes. That domestic and world wide 'confidence' in the US translates into support for our national currency as the leading currency of the world, including by the oil rich nations of the Persian Gulf as the 'petrocurrency' of choice.

The dollar is weakening for certain, but that's due more to internal factors such as the ever increasing federal deficit and the current account deficit, than due to external ones such as the mythical Iranian Oil Bourse. The dollar is losing strength because the forces that undermine it are primarily the very same ones that created the 'FIAT' system of national currency in the US in the first place. The dollar happens to be backed up by debt, not asset reserves. Therein lies the fundamental structural problem. This concern over the decreasing value of the dollar is being reflected in the ever more obvious and very public decisions by the central banks of China, Japan, etc, to buy precious metals, and sell dollars.

This Iranian Oil Bourse talk may marginally contribute to a weakening of the dollar, and perhaps another currency may even replace it eventually as the world 'petrocurrency' of choice (see GCC currency due to debut in 2010). However, if that scenario ever became a real and looming possibility, the US could and should adjust appropriately. We could get our internal house in order, stop spending money we don't have, and in time the dollar would recover quite nicely. The dollar is going to remain at the very minimum one of the world's leading currencies for decades to come. It may even become stronger again if we eliminated federal deficit spending altogether, and significantly reduced our national federal debt which is now approaching 9 trillion USD.

The bottom line is this: the real threat to the dollar is the staggering debt that we in the US have to face by way of our national deficits and our balance of trade; not by non-realistic threats. Furthermore, the EURO is not in any position to substitute the dollar as the 'petrocurrency' of choice in the immediate, or near term. It simply does not have the required liquidity in the international currency markets to substitute the dollar in its entirety. Only a small fraction of it. This talk of an Iranian Oil Bourse substituting dollars with EUROs is just another hopeless tirade by banana republic wannabees and closet dictators in the Persian Gulf intending mainly to appeal to the masses inside Iran... in other words this propaganda is mainly for domestic consumption. As we all know from political science, "the masses are asses". So, I'm not afraid of the Iranian paper tiger. No one else should be either.

Forgive my rant. Just my opinion.

investindinar