Iran Mocks the US Dollar
Analysts believe that Iran's policies will gradually cause the ''petrodollar'' system to disappear, which the United States established in 1975. But what is the petrodollar system and how will Iran be able to eliminate it?
Financial Wire: English economic analysts believe that Iran's move to sell it's own oil in a currency other than the dollar will eliminate the predominance of the ''petrodollar'' system.
According to ''Tabnak," the ''petrodollar'' system took shape in 1975. That year U.S. President Nixon asked Saudi Arabia to sell its oil in dollars.
Following this move, other OPEC member countries also proceeded to sell their oil in U.S. dollars, and after a short period the demand for the U.S. dollar grew and more countries started borrowing dollars from the United States.
This self-perpetuating system resulted in the increase of the dollar's value across the globe and the Americans were able to import the commodities they needed at a very high discount. This process and the trend of preference for the dollar continues, to the point that when former director of the International Monetary Fund Strauss-Kahn was demanding that the U.S. dollar be replaced by another currency, he was immediately accused of rape and went to prison. He was of course dismissed from his position.
There are other examples in this regard: the fact that Iran wants to conduct oil trade with China, Russia, and India in its own currency. Concerning this, it should be said that if this agreement takes place and other countries lean in this direction, a new currency war against the dollar will take shape and Iran will be in the thick of it.
Another issue is the management of international gold transactions, where Iran would sell its oil to India in exchange for gold, just to name an example. If this agreement were to succeed as well, it would lead to a sharp decline in the global value of the dollar and an increase the price of gold.
This is a matter that the United States will not allow and will go to war over it too, just as when Iraq was no longer trading its oil in dollars but rather in euros in 2003 and immediately found itself faced with an American attack. Can Iran destroy the petrodollar system?
Financial Wire: English economic analysts believe that Iran's move to sell it's own oil in a currency other than the dollar will eliminate the predominance of the ''petrodollar'' system.
According to ''Tabnak," the ''petrodollar'' system took shape in 1975. That year U.S. President Nixon asked Saudi Arabia to sell its oil in dollars.
Following this move, other OPEC member countries also proceeded to sell their oil in U.S. dollars, and after a short period the demand for the U.S. dollar grew and more countries started borrowing dollars from the United States.
This self-perpetuating system resulted in the increase of the dollar's value across the globe and the Americans were able to import the commodities they needed at a very high discount. This process and the trend of preference for the dollar continues, to the point that when former director of the International Monetary Fund Strauss-Kahn was demanding that the U.S. dollar be replaced by another currency, he was immediately accused of rape and went to prison. He was of course dismissed from his position.
There are other examples in this regard: the fact that Iran wants to conduct oil trade with China, Russia, and India in its own currency. Concerning this, it should be said that if this agreement takes place and other countries lean in this direction, a new currency war against the dollar will take shape and Iran will be in the thick of it.
Another issue is the management of international gold transactions, where Iran would sell its oil to India in exchange for gold, just to name an example. If this agreement were to succeed as well, it would lead to a sharp decline in the global value of the dollar and an increase the price of gold.
This is a matter that the United States will not allow and will go to war over it too, just as when Iraq was no longer trading its oil in dollars but rather in euros in 2003 and immediately found itself faced with an American attack. Can Iran destroy the petrodollar system?