This is quite bad news for the US, forcing others to buy up US debt in exchange for oil has helped a long term debt culture. But if some other nations start to do the same, expect a vast amount of dollars to be offloaded for the Euro. Saddam started selling in Euros, look where it got him!! The members of OPEC have discussed it on many a occasion now already.
Has anyone heard anything more about Canada's plans to switch to using the Euro? http://www.dfait-maeci.gc.ca/canadaeuropa/canada-eu-en.asp
..can you paste the text?? (please) -- one has to register to read the article... my reaction to this (off the cuff, without reading the article) is "oh, shit -- here comes another invasion (war) from the bush regime"
Are the Americans going to invade Canada too? Do I have to fight on the Canadian side? Even though I'm Canadian can't I join up with the American side? You guys will need all the help you can get. Remember how you lost in 1812 against us.
Russia to price oil in euros in snub to US By Ambrose Evans-Pritchard in Brussels (Filed: 10/10/2003) Russia is to start pricing its huge oil and gas exports in euros instead of dollars as part of a stragetic shift to forge closer ties with the European Union. The Russian central bank has been amassing euros since early 2002, increasing the euro share of its $65 billion (£40 billion) foreign reserves from 10pc to more than 25pc, according to the finance ministry. The move has set off a chain reaction in the private sector, leading to a fourfold increase in euro deposits in Russian banks this year and sending Russian citizens scrambling to change their stashes of greenbacks into euro notes. German officials said Chancellor Gerhard Schroder secured agreement for the change-over on oil pricing from Vladimir Putin, the prime minister, while on a trip to Russia this week. Mr Putin was coy about German media reports on the deal yesterday but acknowledged that Russia was exploring the idea. "We do not rule out that it is possible. That would be interesting for our European partners," he said. A switch to euro invoicing would not affect the long-term price of oil but it could encourage Middle Eastern exporters to follow suit and have a powerful effect on market psychology at a time when the dollar is already under intense pressure. Russia boasts the world's biggest natural gas reserves and is the number two oil exporter after Saudi Arabia. Yesterday the dollar recovered slightly against the yen and euro, but the IMF and the European Central Bank both warn that America's ballooning current account deficit, now over 5pc of GDP, will lead to further declines. Oil is seen as so central to the global power structure that the choice of currency used for pricing has acquired almost totemic significance. The switch from pounds to dollars after the Second World War has come to symbolise sterling's demise as a world reserve currency. If the dollar were ever displaced by the euro, it would lose the enormous freedom it now enjoys in running macro-economic policy. Washington would also forfeit the privilege of exchanging dollar notes for imports, worth an estimated 0.5pc of GDP. Maxim Shein, from BrokerKreditService in Moscow, said the switch to euros makes sense for Russia since it supplies half of Europe's energy needs. But the move is also part of a global realignment stemming from the Iraq war, which threw Russia, Germany and France together into a new Triple Entente. "Abandoning the dollar is tantamount to a curtsey to the EU," he said. For now, IMF figures show the dollar remains king, accounting for 68pc of foreign reserves worldwide compared with 13pc for the euro.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=20740&perpage=10&pagenumber=4 Some Ebeling comments that I had posted a few weeks ago regarding the subject. would be nice to have an economic forum. Anyone have comments on this stuff? 10-08-03 08:09 PM -------------------------------------------------------------------------------- Quote from Avalanche: This below makes the most sense to me regarding why the U.S. is really so intent on outing Sadam instead of the dozen other threats (that don't have so much CRUDE for example). There is an old adage in political and economic analysis. If you want to understand why people do many of the things they do, then you should âfollow the money.â That is, who benefits from a particular policy often tells you a lot about who is advocating it and why. For all of the postâWorld War II period the U.S. dollar has served as the reserve currency for international trade. It is estimated that about $3 trillion is in circulation around the world. Almost all oil transactions and numerous other globally traded commodities are bought and sold with dollars. In some cases, dollars are hoarded by the citizens of other countries because of a lack of confidence or trust in their own governments. In Russia, for example, as much as $30 billion is held as cash money by thousands of people instead of rubles. The world demand for dollars and the worldwide use of the dollar have served as an important cushion to maintain the value of the dollar on foreign-exchange markets, which has enabled the U.S. government to print money and run trade deficits that might otherwise have put downward pressure on the international exchange rate of the greenback. The demand for dollars has also enabled Washington to fund the federal budget deficits of the past because foreigners have used the dollars they own to purchase U.S. Treasury securities. With so many dollars in use for so many international transactions, parking some of those dollars back in the United States in the form of U.S. government securities for a period of time has usually seemed the safest, easiest, and most logical way of putting oneâs cash to work. But a number of European newspapers, including the London Observer, have pointed out that the world has been slowly shifting into an alternative currency to use for international transactions: the euro. Not long ago, the Iraqi government made it official policy that Iraqi oil, two-thirds of which is purchased by American oil companies, had to be paid for in euros. Last year, a senior Iranian oil representative suggested in a speech in Europe that European oil purchases might be increasingly traded in euros in the future. China and Russia have hinted that they may begin to hold more of their foreign currency reserve assets in euros in place of dollars. If the euro were to increasingly become the alternative international currency of choice in competition with the dollar, the global demand for greenbacks would fall, the value of the dollar would decline, and the U.S. government would find it far more difficult both to export inflation and to finance its budget deficits. The financial clout and muscle of the American government would be dramatically undermined over time with the dollar increasingly no longer the only global reserve currency in town. With the American military serving as the keeper of the oil fields in an occupied Iraq, the first policy change undoubtedly would be that all Iraqi oil sales will be once again exclusively in dollars. This would give the U.S. government the chance to try to stem the tide toward international use of the euro in place of the dollar and to put pressure on the Saudi government to maintain its long-established policy of dealing only in dollars on the oil market. And at the same time Iranian enthusiasm for euro dealings might be tempered if the American liberators are just next door. It is hard to imagine that in the policy recesses of the State and Treasury Departments this benefit from a successful war in Iraq has not been thoroughly discussed in the briefs circulated among those deciding on war or peace. How else can the U.S. government, with federal budget deficits looming for years on the horizon, go on playing its sleight of hand in which it deludes the American public into thinking that government deficit spending is a continual âfree lunchâ that others around the world can be made to pay for? How else can the American government continue to play dollar diplomacy in managing its global empire? Richard Ebeling
Putin will sell oil in euros IF europe gives russians visa free travel thats his bargaining chip, if germany and france can convince the others then perhaps it will occur, chavez in venezuela also wants it as well as saudi arabia.