Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Will Iran Kill the Petrodollar?
02-27-2012, 01:16 PM,
#1
Will Iran Kill the Petrodollar?
Will Iran Kill the Petrodollar?

Marin Katusa, Chief Energy Investment Strategist
January 25, 2012 7:46pm GMT
By Marin Katusa, Casey Research

The official line from the United States and the European Union is that Tehran must be punished for continuing its efforts to develop a nuclear weapon. The punishment: sanctions on Iran's oil exports, which are meant to isolate Iran and depress the value of its currency to such a point that the country crumbles.

But that line doesn't make sense, and the sanctions will not achieve their goals. Iran is far from isolated and its friends – like India – will stand by the oil-producing nation until the US either backs down or acknowledges the real matter at hand. That matter is the American dollar and its role as the global reserve currency.

The short version of the story is that a 1970s deal cemented the US dollar as the only currency to buy and sell crude oil, and from that monopoly on the all-important oil trade the US dollar slowly but surely became the reserve currency for global trades in most commodities and goods. Massive demand for US dollars ensued, pushing the dollar's value up, up, and away. In addition, countries stored their excess US dollars savings in US Treasuries, giving the US government a vast pool of credit from which to draw.

We know where that situation led – to a US government suffocating in debt while its citizens face stubbornly high unemployment (due in part to the high value of the dollar); a failed real estate market; record personal-debt burdens; a bloated banking system; and a teetering economy. That is not the picture of a world superpower worthy of the privileges gained from having its currency back global trade. Other countries are starting to see that and are slowly but surely moving away from US dollars in their transactions, starting with oil.

If the US dollar loses its position as the global reserve currency, the consequences for America are dire. A major portion of the dollar's valuation stems from its lock on the oil industry – if that monopoly fades, so too will the value of the dollar. Such a major transition in global fiat currency relationships will bode well for some currencies and not so well for others, and the outcomes will be challenging to predict. But there is one outcome that we foresee with certainty: Gold will rise. Uncertainty around paper money always bodes well for gold, and these are uncertain days indeed.

Continue to read:
http://www.caseyresearch.com/articles/will-iran-kill-petrodollar
Reply


Possibly Related Threads...
Thread Author Replies Views Last Post
Bug The Kill Bill Deadpool CharliePrime 6 1,325 03-25-2014, 05:09 PM
Last Post: CharliePrime
Music How Elites Created the Hippie Movement to Kill America CharliePrime 12 5,289 05-16-2013, 08:43 PM
Last Post: Easy Skanking
Thumbs Down Military Muppet: TV character urges Israelis to prepare for strike on Iran Infinite 0 1,295 09-09-2012, 09:13 AM
Last Post: Infinite
  Iran president Ahmadinejad at UN Sept. 2011 rockingtheboat 25 12,842 06-15-2012, 11:42 PM
Last Post: Negentropic
  Israel, US & UK Consider Attack On Iran: Corporate-Fascists Clamor for Iran War B4Time 50 11,838 04-17-2012, 01:07 AM
Last Post: FastTadpole
  World considers US, Israel threat not Iran: Chomsky Solve et Coagula 1 1,177 03-05-2012, 06:37 AM
Last Post: Sovereignman
  Preparing for the Collapse of the Petrodollar System Solve et Coagula 0 796 02-27-2012, 01:01 PM
Last Post: Solve et Coagula
  The consequences of nuking Iran Solve et Coagula 0 1,035 02-26-2012, 06:38 PM
Last Post: Solve et Coagula
  Buchanan - What Happens in Iran and Syria is None of Our Business datars 0 920 02-22-2012, 07:10 PM
Last Post: datars
  Economic blockade of Iran is an act of war datars 0 997 02-21-2012, 02:01 AM
Last Post: datars

Forum Jump:


Users browsing this thread: 1 Guest(s)