Iran's done it now...

Originally posted by darkbluesky
American politicians and business leaders of today, as well as those of earlier generations, are no more, or less, manipulative, greed or power driven, charitable, altruistic, good, or evil, than any of their European counterparts.

My point was in response to someone who seemed to thing they were less so. I would argue that they are more hypocritical. There's so much rhetoric about standing for freedom and democracy that on closer inspection of the historical record turns out to be utter BS. But it's a myth much of America lives by.

You Eurpoeans must really get over yourselves. You are no better than anyone else. We're all the same on the inside, some of us just have more stuff.

Funnily enough, if you substitute the word "Americans" for "Europeans", you have my point of view on all this. And, actually, the proportion of Americans who have "more stuff" is small and getting smaller, as this article by Paul Krugman shows very eloquently:

The economic pie is getting bigger -- how can it be true that most Americans are getting smaller slices? The answer, of course, is that a few people are getting much, much bigger slices. Although wages have stagnated since Bush took office, corporate profits have doubled. The gap between the nation's CEOs and average workers is now ten times greater than it was a generation ago.

And, as it happens, the UK is not above doing things without any ulterior motive other than honouring old colonial ties. A few years ago I spent some time in Belize, formerly British Honduras, and to my great surprise, one of the people I got chatting to there (very left wing, a union organiser) actually had some very nice things to say about Britain. He was very grateful for the school system that had been instituted by the British, and he gave a fascinating example of UK behaviour that I had no idea about. Apparently, back in the eighties, Guatemala had had troops massing on the Belize border. The UK (perhaps slightly on the alert after being caught flat-footed over the Falklands) sent a small fleet out to Belize, and the Guatemalans thought better of invading. This was after Belize had attained independence, and the Belize government was not charged.

I'm certainly not trying to make out that the UK is saintly or any better than the US... just not as hypocritical. There isn't any of that pompous pigswill about bringing democracy to the middle east, that's all.

Originally posted by rich23
I'm certainly not trying to make out that the UK is saintly or any better than the US... just not as hypocritical. There isn't any of that pompous pigswill about bringing democracy to the middle east, that's all.

Fair enough. If I could press you to admit there are plenty of other areas in which Brittish pomposity is truly marvelous, I think we can call it a day.

Cheers!

Originally posted by darkbluesky
Fair enough. If I could press you to admit there are plenty of other areas in which Brittish pomposity is truly marvelous, I think we can call it a day.

How about "The oil of Iraq will be held in trust for the people of Iraq" - T. Bliar, 2003?

At least Harold Wilson kept us out of Vietnam...

Originally posted by Gools

Originally posted by Freedom_for_sum
Well; Europe is well on its way toward Islamification.

That's perhaps the stupidest statement I've seen on here this week. Not only is this a made up word (Islamification) it has nothing to do with the topic.

Just because the word in not in the dictionary doesn't mean it's not used. There are words added to the dictionary every year because they are frequently used (Google)

And it has everything to do with this topic. Just because you disagree with my opinion doesn't mean it's stupid. It does, however, mean you're ignorant and it's people like you that the government of Iran (and many Muslims) will count on to slowly allow the spread of Islam and a Sharia-based economy. Switching from the dollar to the Euro is only an atempt to influence the Americna economy; and it's one of the first steps movin toward the spread of Islam throughout the world. Wait and see.

lets not turn this into a debate on Islam and European relations.

Back to the topic, America will not use military action on Iran. Bush himself may want to use force, but his administration and congress will not sanction a move due to the fact that the American economy probably cannot afford another war in the Middle East.

Another thing to bear in mind is now that many will be using the Euro as a standard instead of the US dollar for Petroleum , will they want the US to interfere and go back to the Petrodollar? I'm sure it is in their interests to build up their economy the same way we did by setting their dollar as a standard for trade. We have lost more trade partners due to our countries foreign policy and rather then isolating more we should be doing as China , and Europe is doing to increase trade. Those of you babbling on about Islam attempting to take over and such, thats a bunch of BS. It has nothing to do with "Islamification" it has to do with, that exact attitude. Do you expect these Oil producing nations who also happen to be Islamic to support our economy while the majority of this nation wants to go around killing Islamic people ? The idea that they have stuck with the US dollar for so long should have told you that they had nothing against us and nothing could have stopped them from going to the British Pound a long time ago . Its been almost double the value of a US Dollar for a long time.


You get more bees with honey then you will with vinegar.

I already posted this in the original topic about iran dumping the dollar. But what the hell. Since beating a dead horse in the head is popular around here why not a repost??

Irans plan to weaken the US dollar will fail!

Tehran lacks the freedom and transparency needed for a successful oil exchange.
By Milton Ezrati
JERSEY CITY, N.J. – If, as is widely believed, the original tales of the 1001 Arabian Nights came out of Persia, then Iran, Persia's modern successor, has just given the world yet another great fantasy: the Iranian oil bourse.

Surely Tehran lost touch with reality when it developed its plan to use a new, euro-based oil exchange, on Kish Island in the Persian Gulf, to dethrone the greenback from its position as the world's reigning reserve currency. Such a project is neither likely to attract much business nor to have Tehran's desired effect on the dollar or the United States.

Tehran's plan of attack has the virtue of economic logic at least. Iran's planners recognize that the heavy use of the dollar in international trade sustains its foreign exchange value by forcing people to hold greater dollar balances than they otherwise would. The dollar's consequent strength encourages its use in other transactions, which requires still greater dollar holdings in a dollar-boosting cycle. Iran's planners hope that their euro-based exchange will disrupt this pattern. By forcing oil traders to hold euro balances instead of dollar balances, Tehran expects the oil bourse to induce dollar selling and consequently force a drop in value. Those foreign exchange losses will draw still more trading away from the dollar, further weakening it, until, ultimately, it loses its world-leading position. Iran's planners expect to do the US great harm in this way.

This economic logic, though reasonable from a theoretical standpoint, misses some very practical hurdles to success. Tehran's exchange simply is not attractive compared with the exchanges in London and New York, where dealers and traders are prospering amid their well-developed networks. On distant Kish Island, they would: (1) lack trained locals to work in their operations, (2) have to deal with a notoriously corrupt bureaucracy, (3) lose contact with a transparent financial, regulatory, or banking system, (4) lack the necessary technological infrastructure, and (5) sever most links to the globe's electronic commercial structures on which trading relies.

Because Iran is not even a member of the World Trade Organization, dealers who move to Kish Island would also miss the kind of legal structures on which they rely to facilitate trading and secure the contracts that support it. Furthermore, a firm's move to Kish would subject any staff assigned there to Islamic sharia law. Western oil company employees tolerate that burden because they must go where the oil is. The same is not true of futures traders.

Against this list of drawbacks, it is difficult to see how such an exchange could even get started. Tehran is unconvincing with its argument that proximity to the Middle East oil fields can overcome other reservations, especially in today's electronic, information-laden world. Neither can Tehran use its oil production, as it has hinted, to force traders and dealers to its exchange. As long as Iran sells its oil onto world markets, it has no control over where it gets traded. And Iran, whatever its political agenda, simply does not have the economic and financial wherewithal to hold back its oil altogether. Petroleum amounts to 80 percent of all Iranian exports, 45 percent of the country's GDP, and 60 percent of the government's revenues. With the economy there already rickety, any shortfall in oil sales would tempt financial, economic, and consequently political suicide for Iran's current regime.

Iran's proposed bourse would also face serious diplomatic and religious problems. To work, the exchange would require a free flow of funds and oil, but Iran's membership in OPEC subjects it to strict production and sales quotas. It is not at all clear how Tehran plans to reconcile one requirement with the other. Most fundamental of all, at least for many Iranians, is the likely violation of Islamic law. The Koran forbids either paying or receiving interest; futures contracts always carry an implicit interest for the time value of money. On this basis, the bourse could pose more of a problem for relations between Iran's government and its people than for the dollar.

Even if by some miracle of legal maneuvering and commercial seduction, Tehran established its euro-based oil bourse, trading there would likely fail to move the dollar from its dominant position. Even a wildly successful Iranian exchange would have only a short-lived currency effect. Once traders and dealers had adjusted their transactions balances to accommodate the euro-based trading, they would have no reason for further dollar sales or euro purchases. Currency values would then stabilize at a new level.

Clearly, Tehran has failed to think through its bourse project thoroughly. For the time being then, such talk of dollar destruction from Tehran resembles hopes and dreams more than practice and probability. To steal a phrase from that inspired Middle Eastern thinker, Fouad Ajami, the Iranian oil bourse would seem then to fit best with the many other Middle Eastern "dream palaces."

Ill leave it up to you doom and gloomers now.

Originally posted by semperfoo
I already posted this in the original topic about iran dumping the dollar. But what the hell. Since beating a dead horse in the head is popular around here why not a repost??

Irans plan to weaken the US dollar will fail!

Even a wildly successful Iranian exchange would have only a short-lived currency effect. Once traders and dealers had adjusted their transactions balances to accommodate the euro-based trading, they would have no reason for further dollar sales or euro purchases. Currency values would then stabilize at a new level.

Ill leave it up to you doom and gloomers now.

Ok thats just Tehran, and it does say stabilize at NEW levels. Are those levels going to be considerably lower? Then what happens if Tehran convinces Venezuela? Maybe more of OPEC decide to join? (Maybe not Saudi Arabia) Then what?
Still shouldn't be a problem?


Pie

What if??? Well bud, IF, IFs and BUTs were candy and nutts we'd all have a merry christmas.
Irans just took a risk/reward type of act. It more then likely will backfire into there own faces. I will be like this

Oh dear. Posting this dubious pile of horse puckey twice simply means that either no-one shot it down effectively the first time, or else you've ignored their arguments. Being as how you're clearly coming from that "America is BEST! All your base are belong to US!" viewpoint, that wouldn't surprise me. However, there's nothing I enjoy more than filleting this kind of nonsense before breakfast, it sets me up for the day...

Originally posted by semperfoo

JERSEY CITY, N.J. – If, as is widely believed, the original tales of the 1001 Arabian Nights came out of Persia, then Iran, Persia's modern successor, has just given the world yet another great fantasy: the Iranian oil bourse.

Surely Tehran lost touch with reality when it developed its plan to use a new, euro-based oil exchange, on Kish Island in the Persian Gulf, to dethrone the greenback from its position as the world's reigning reserve currency. Such a project is neither likely to attract much business nor to have Tehran's desired effect on the dollar or the United States.

These paragraphs simply make it clear that this is a propaganda puff piece. There is no support for any of the contentious assertions. The one fact we can latch on to is that Kish Island is the site of the proposed bourse.

Tehran's plan of attack has the virtue of economic logic at least.

More than the author is prepared to admit, as we shall see.

Iran's planners recognize that the heavy use of the dollar in international trade sustains its foreign exchange value by forcing people to hold greater dollar balances than they otherwise would. The dollar's consequent strength encourages its use in other transactions, which requires still greater dollar holdings in a dollar-boosting cycle.

So far, so true, although it might have been more accurate to place the word "illusory" between the words "consequent" and "strength". Forcing other nations to use your currency in oil transactions adds no real value to that currency.

Iran's planners hope that their euro-based exchange will disrupt this pattern.

Assumption traded as fact. It is far more likely that their primary motive is their own benefit rather than the US' detriment, and to state the above is simply more anti-Iranian propagands. It is true that it's more than possible that their actions will disrupt that pattern, but that's probably just a bonus side effect. Iran's planners want to trade oil in a currency that doesn't lose value because that way they make more money from selling their oil.

By forcing oil traders to hold euro balances instead of dollar balances, Tehran expects the oil bourse to induce dollar selling and consequently force a drop in value. Those foreign exchange losses will draw still more trading away from the dollar, further weakening it, until, ultimately, it loses its world-leading position.

Reality check: the dollar's been on the slide for years now. One of the main reasons for the attacks on Venezuela and Iraq is that they're trading in Euros. The US imposed the petrodollar on OPEC years ago because it was in financial difficulties and needed other countries to have a reason to hold large dollar reserves. Saddam made many, many millions virtually overnight by switching from dollars to euros.

Iran's planners expect to do the US great harm in this way.

Again, the primary motive is almost certainly not to lose money.

Tehran's exchange simply is not attractive compared with the exchanges in London and New York, where dealers and traders are prospering amid their well-developed networks. On distant Kish Island, they would: (1) lack trained locals to work in their operations, (2) have to deal with a notoriously corrupt bureaucracy, (3) lose contact with a transparent financial, regulatory, or banking system, (4) lack the necessary technological infrastructure, and (5) sever most links to the globe's electronic commercial structures on which trading relies.

Yup. They're just a bunck of stinking, ignorant, lazy, corrupt ragheads. Why would anyone want to go there?

Well, to be sure, starting a bourse from scratch is not the easiest thing. And by the way, I worked for the UK stock exchange for some time, so I have an idea of what I'm talking about. That place was relatively well-run, but it was far from immune from foul-ups. To assume that Western institutions are clean and transparent is the most ludicrous puffery. Where there's lots of money sloshing around, there are people being ripped off, and the West's markets are testament to that fact.

But the Iranians will have something that New York and London cannot offer - the chance to buy and sell oil in a currency that's not already on the slide. I did a contract in the US three years ago now and I lost about a fifth of the value of my earnings through the dollar's decline. Why would anyone want to continue trading in a loss-making currency if there's an alternative? Yes, the Iranians face big challenges, and there are bound to be teething troubles, but you know, they've got quite a bit of money to throw at this, and quite some incentive.

Because Iran is not even a member of the World Trade Organization, dealers who move to Kish Island would also miss the kind of legal structures on which they rely to facilitate trading and secure the contracts that support it.

Utter globalist and chauvinist rubbish. What, did people simply not do business before the WTO raised its sickly puppet head over the parapet? Is being in the WTO ANY kind of guarantee of anything?

I didn't know Iran wasn't in the WTO. Good for them!

Furthermore, a firm's move to Kish would subject any staff assigned there to Islamic sharia law. Western oil company employees tolerate that burden because they must go where the oil is. The same is not true of futures traders.

I cannot believe that anyone just reads this article and doesn't burst out laughing. Is this really what passes for thought anywhere in the world?

Futures traders, like anyone else, will go where the money is. Saudi Arabia is under strict Sharia law and there are real penalties for Westerners caught drinking, for example, even though the ex-pat community is pretty tight. I suspect that Iran might actually be slightly more tolerant of Westerners than the Saudis, although I admit this is just an impression.

Neither can Tehran use its oil production, as it has hinted, to force traders and dealers to its exchange. As long as Iran sells its oil onto world markets, it has no control over where it gets traded.

But isn't it obvious to even the meanest intelligence that it can say, "sorry, we're only taking Euros for our oil"? That initial trade is what counts to them, and they have an opportunity to provide another forum where free countries can get away from a currency that is devaluing even as you use it.

And Iran, whatever its political agenda, simply does not have the economic and financial wherewithal to hold back its oil altogether.

And the world cannot afford to do without Iranian oil. The price of oil has risen to utterly unprecedented levels. Are people content to narrow the supply still further, which will inevitably drive up prices? Don't be ridiculous.

With the economy there already rickety

There is no supporting evidence for this jingoistic assertion in the article. Given, as we have seen, an utter disregard for the reality and logic of the situation, I doubt that this claim has any more validity, although I admit I don't know. It strikes me that with the current rise in oil prices, Iran should be sitting relatively pretty.

Iran's proposed bourse would also face serious diplomatic and religious problems.

Wow. This guy's working hard. Religious problems. Talk about pulling out all the stops!

To work, the exchange would require a free flow of funds and oil, but Iran's membership in OPEC subjects it to strict production and sales quotas.

Why should setting up an oil bourse require unlimited flow of Iran's own oil? That's ridiculous. Why should production quotas prevent oil trading? The US and UK have exchanges, but do they produce oil willy-nilly? Don't think so. There is no reasoning to show why a free flow of oil is needed to set up an oil bourse.

The Koran forbids either paying or receiving interest; futures contracts always carry an implicit interest for the time value of money. On this basis, the bourse could pose more of a problem for relations between Iran's government and its people than for the dollar.

Well, you know, they've already made the decision to go ahead. I think the pros and cons of this argument might have already been worked through.

Even a wildly successful Iranian exchange would have only a short-lived currency effect. Once traders and dealers had adjusted their transactions balances to accommodate the euro-based trading, they would have no reason for further dollar sales or euro purchases. Currency values would then stabilize at a new level.

OH yeah. And what level would that be? Let me see, I'm an oil producing country and I can sell my oil in a currency that's devaluing all the time, or I can swap to a stable currency. How far will the dollar fall?

The only variable in the equation is how much muscle the US is prepared to use to stuff its increasingly worthless (sorry about that phrase, but it'll have to do) currency down everyone's throat.

oops... wrong thread.

[edit on 12/21/2006 by Gools]

rich123 the fact you put islamic radicalism together with islam tells me im dealing with an ignorant human being, being muslim is fine and most muslims are not radicals, if you denie there are muslim radicals in europe then that would be ignoring the recent attacks that have taken place, attacks in the 90's and attacks in the 80's.

secondly europe is going to have to face this evenutally, I dont care how you point out the population gap between the 2 but the fact remains this is about ideology, I would like you to propose how they are going to quell this idealogy that is obviously growing in europe, more babies are going to be born and more generations are going to be influenced by this jihadist movement so what is europe going to do?

mod i dont mean to go off topic but I am responding to rich's obvious ignorance, I dont recall muslim european sha's being overthrown as reason for their intense anger towards western culture. pure ideology.


secondly the US does protects it's allies and it's interests and the projection of force is obvious, if you consider troops on the ground in iraq the defention of US force then you need a reality check. If you think russian and chinese and iranian interests are the same as the EU then you haver another thing coming to you. and if you think force projection doesnt have influence take a good look at taiwan. china is not willing to get nuked over taiwan.

i could just see europe being subject to chinese and especially russian interests if europe didn't have the protection of the US for all of these decades so dont sit here and mass post a bunch of babble that force projection has no influence like all countries desire to be at peace love and harmony,HAHAHAH, THAT WOULD BE IGNORING HUMAN HISTORY, OUR SPECIES IS BRUTAL even though we consider ourselves 'civilized'.

the US has been the sole protector of western civilization for decades now.


[edit on 21-12-2006 by ape]

I'd like to reply to this frothing nonsense, but there's not enough logic in it for me to know where to start. Not much I can do, really. It seems as though you've wandered in from another thread.

is that all you can muster up? you have zero clue about the geopolitical chess game. deny ignorance