Iran president calls U.S. dollar 'worthless'

[1prophet]

<a target=_blank class=ftalternatingbarlinklarge href="http://www.msnbc.msn.com/id/21870271/">Iran president calls U.S. dollar 'worthless'
OPEC members consider converting cash reserves into non-dollar currency</a>

RIYADH, Saudi Arabia - Iranian President Mahmoud Ahmadinejad said Sunday that OPEC?s members have expressed interest in converting their cash reserves into a currency other than the depreciating U.S. dollar, which he called a ?worthless piece of paper.?

His comments at the end of a rare summit of OPEC heads of state exposed fissures within the 12-member cartel ? especially after U.S. ally Saudi Arabia was reluctant to mention concerns about the falling dollar in the summit?s final declaration.

The hardline Iranian leader?s comments also highlighted the growing challenge that Saudi Arabia, the world?s largest oil producer, faces from Iran and its ally Venezuela within the Organization of Petroleum Exporting Countries.

?They get our oil and give us a worthless piece of paper,? Ahmadinejad told reporters after the close of the summit in the Saudi capital of Riyadh. He blamed U.S. President George W. Bush?s policies for the decline of the dollar and its negative effect on other countries.

?All participating leaders showed an interest in changing their hard currency reserves to a credible hard currency,? Ahmadinejad said. ?Some said producing countries should designate a single hard currency aside from the U.S. dollar ... to form the basis of our oil trade.?

Oil is priced in U.S. dollars on the world market, and the currency?s depreciation has concerned oil producers because it has contributed to rising crude prices and has eroded the value of their dollar reserves.

Saudi Arabia?s King Abdullah had tried to direct the focus of the summit toward the question of the effect of the oil industry on the environment, but he continuously faced challenges from Ahmadinejad and Venezuelan President Hugo Chavez.

So what could this do to the US aside from rising prices, especially now with the current lending crisis?

 

[Engineer]

Originally posted by: 1prophet

So what could this do to the US aside from rising prices, especially now with current lending crisis?

What could this do? Iran invasion, FTL! heh.

 

[techs]

Thanks Bush.:thumbsdown:

 

[Nebor]

In case Aminajad hasn't been paying attention, threatening to switch away from US currency is a great way to get invaded.

 

[Engineer]

Originally posted by: Nebor
In case Aminajad hasn't been paying attention, threatening to switch away from US currency is a great way to get invaded.

Always seems to be the case with dollar hedgemony, now doesn't it.

 

[Lemon law]

The US has a strong national interest in keeping Oil denominating in dollars. And by some thinking its why we invaded Iraq because Saddam was an advocate of just such a move.

But I can remember when sound as a dollar meant something real. The US fantasy is that we can keep a strong currency and still run a net negative balance of trade. Right after WW2, we emerged as the only major industrialized country to escape major infrastructure damage. And while the rest of the world repaired their infrastructure, the US built up a huge balance of trade surplus making the dollar very strong. By about 1980 somewhere in the cusp between Carter and Reagan, our trade surplus hit neutral and has been going South ever faster since. So blaming GWB is not the only answer although GWB does seem to be accelerating the decline.

For a foreign power be they a government or an individual, putting money in US paper used to be wise because if all else failed and your government fell, the US dollar was deemed the safest even though the interest rates was low. Now its a terrible investment because the dollar is declining very rapidly. I have to guess that soon oil will be denominated in Euros or some more stable currency. It has to be in the interests of oil exporting nations and with GWB, why should they do any favors for an idiot who mainly
antagonizes their populations? Especially when the markets of the future will be India and China.

And then United States will have to the face economic reality that it can't just inflate their way out of debt.

 

[StageLeft]

Haha!

Edit: Oh wait, I live here. Sh*t.

 

[Hayabusa Rider]

Originally posted by: Nebor
In case Aminajad hasn't been paying attention, threatening to switch away from US currency is a great way to get invaded.

Please, go invade. Let us know how that works for you.

Anyway,
I've wondered why it's taken so long for this discussion to become public. I would think they would go for Euros rather than dollars.

 

[jpeyton]

OPEC would be wise to covert to Euros.

They would even benefit by accepting Canadian dollars. :laugh:

 

[1prophet]

Originally posted by: Hayabusa Rider


Anyway,
I've wondered why it's taken so long for this discussion to become public. I would think they would go for Euros rather than dollars.

I think due to the economic situation in the US and the war in Iraq they perceive weakness and aren't afraid to speak what they think anymore.


Wow google is fast, this was in the adbar at the bottom of this topic.

• The Falling US Dollar
  Why the dollar is falling...Eleven ways to profit from dollar decline.
  www.MoneyMorning.com/dollar_rpt
  
  The Truth Behind OPEC Oil
  The Last Domino Is About To Fall. New Oil Forecast & Investor Report.
  www.EnergyAndCapital.com/PeakOilRpt

 

[Drift3r]

Originally posted by: Nebor
In case Aminajad hasn't been paying attention, threatening to switch away from US currency is a great way to get invaded.

That would be a case were the so called "cure" would be worse then the actual illness. Not to mention that it would destroy our creditability or whatever is left of it as the world's only "civilized democratic super power".

 

[dmcowen674]

Originally posted by: jpeyton
OPEC would be wise to covert to Euros.

They would even benefit by accepting Canadian dollars. :laugh:

11-17-2007 Saudi minister warns of dollar collapse

The dollar could collapse if Opec officially admits considering changing the pricing of oil into alternative currencies such as the euro, the Saudi Arabian foreign minister has warned.

Nigerian finance minister Shamsuddeen Usman said that Opec could declare in the communique that: "While underlining our concern for the continued depreciation of the dollar and its adverse impact on our revenues, we instruct our finance ministers to study the issue exhaustively and advise us on ways to safeguard the purchasing power of our revenues, of our members' revenues."

 

[Engineer]

Originally posted by: dmcowen674

Originally posted by: jpeyton
OPEC would be wise to covert to Euros.

They would even benefit by accepting Canadian dollars. :laugh:

11-17-2007 Saudi minister warns of dollar collapse

The dollar could collapse if Opec officially admits considering changing the pricing of oil into alternative currencies such as the euro, the Saudi Arabian foreign minister has warned.

Nigerian finance minister Shamsuddeen Usman said that Opec could declare in the communique that: "While underlining our concern for the continued depreciation of the dollar and its adverse impact on our revenues, we instruct our finance ministers to study the issue exhaustively and advise us on ways to safeguard the purchasing power of our revenues, of our members' revenues."

Dollar has fallen by around 14%....oil is up over 60%. I'm not sure what part of their revenues are hurting based on the above number.

 

[piasabird]

So how much is Saudi Money Worth?

 

[Engineer]

Originally posted by: piasabird
So how much is Saudi Money Worth?

Don't know. Why do you ask?

(Apparantely they have plenty of it though as I read they are building 4 cities (yes, cities) to help diversify their industry beyond oil).

 

[NoStateofMind]

Foreign control over our dollar. Disgusting :thumbsdown:

 

[TastesLikeChicken]

It's makes no real difference what currency oil is traded in, folks. This thing that's been around for quite a while called the "exchange rate" that makes that possible.

But no doubt this stupid old chestnut about oil no longer being traded in dollars (pssst. It's not actually traded in real dollars, but merely assigned a dollar-equivalent value. Nor do countries hoard dollars to buy oil. They hoard dollars and other relatively solid currencies to help stabilize their own currencies.) will continue to be a favorite doom & gloom prediction of some here in P&N, which increasingly seems to stand for Paranoids & Nutcases.

 

[her209]

It will be renamed to Freedom Dollars.

 

[Siddhartha]

The relative weakness of the dollar is the result of the use of energy exports and exportation of manufacturing and jobs offshore.

The upside is if the dollar gets cheap enough, corporations will open factories in the US., use US indgenous energy sources, invest in education and training, and hire US citizens.

 

[Rogodin2]

One of the primary reasons why we decided to overthrow sadamm was becauce he was going to abandon the commodity valuation of oil to the USD (he actually did this and chose to use the euro to represent his oil production). Nixon in his idoicy decided to abandon the gold standard. Once the major oil producing nations decide that the currency of choice isn't the USD we're properly fucked (this is happening as we write).

Rogo

 

[Aimster]

Venezuela and Iran have been pushing for this.

Saudi Arabia says no.
As long as our "ally" remains our little puppet, we have nothing to worry about.

However, if the dollar continues to fall then the kingdom might have to rethink their position

 

[Rogodin2]

The upside is if the dollar gets cheap enough, corporations will open factories in the US., use US indgenous energy sources, invest in education and training, and hire US citizens.

This is invalid ecomonic theory based on kenesian models that have long been proved false.

Rogo

 

[magomago]

Rather than ask what it could do to the US, we should be wondering what could be done to reverse this. Well I thought about what could be done to stave off people from rushing away from the dollar and I realized that our answer isn't hidden in the mathematics of economics -- it lies elsewhere and should be obvious for many of us ~ fix our broken foreign policy.
That is ultimately the reason for switching off of dollar, because our foreign policy is so antagonistic towards 99% of the Middle East. Of course, its hard to say "we should promote democracy" when we have to buy oil from dictators (ie: Saudi Arabia and Iran...although SA is FARRRR worse in that regard. Despite the fact that power ultimately settles in the hand of Iran's Mullahs, people still have greater representation there. I suppose anything larger than 0 is better).

Despite the broken state of the Arab governments that we helped put in place to buy oil from, the single biggest issue would be the Palestinian crisis. We talk about the "magic solution" for the Mid East - and this really is a huge factor in it, although implenting a real solution is nowhere easy...but one that completely makes sense to do.

That, along with have real concrete efforts to continue to help push greater levels of democracy (remember, it doesn't have to be USA style for it to be democracy...and many small steps will worker better in the long run since it introduces reforms over time) would easily be the number one factor to stave off pessimistic speculation on the dollar ~ especially if OPEC countries are more amicable to sticking to it. And this is ultimately a much better solution than to threaten people...b/c acting like that will ultimately help in our downfall.

 

[Siddhartha]

Originally posted by: Rogodin2

The upside is if the dollar gets cheap enough, corporations will open factories in the US., use US indgenous energy sources, invest in education and training, and hire US citizens.

This is invalid ecomonic theory based on kenesian models that have long been proved false.

Rogo

US corprations are buying offshore because they can get it cheaper there . A relatively weaker dollar will make it costier to buy it offshore..

Doesn't the Keynesian model have to do with government spending being part of overall consumption?

 

[Engineer]

Originally posted by: Siddhartha
The relative weakness of the dollar is the result of the use of energy exports and exportation of manufacturing and jobs offshore.

The upside is if the dollar gets cheap enough, corporations will open factories in the US., use US indgenous energy sources, invest in education and training, and hire US citizens.

or buy our corporations at a record rate (500 billion dollars worth last year alone). Warren Buffet stated that the trade deficit and weak dollar are allowing other countries to consume 4% of our coporate stock per year.