Iran shifts to Euro

[pkd]

Iran shifts to euro from dlr in calculating fund value
TEHRAN, Sept 21 (Reuters) - Iran has replaced the U.S. dollar with the euro in calculating the value of its Oil Stabilisation Fund (OSF), Iranian media reported on Monday.

The decision was made earlier this month by President Mahmoud Ahmadinejad, based on a recommendation by the board of directors of the fund, the Poul business daily reported, without citing any official sources.

State radio said the move was taken because the government wished to protect itself from the fragility of the U.S. economy and the weak dollar. The Central Bank of Iran, contacted by telephone, declined to comment.

The OSF, which forms part of Iran's foreign exchange reserves, is a contingency fund set aside by the government to cushion the economy against fluctuating international oil prices and help both the public and private sectors with their hard currency needs by extending loans.

The sizes of the OSF and the overall foreign exchange reserves are not regularly revealed to the public. Ahmadinejad said last December that the OSF was worth the equivalent of over $23 billion, and state television reported at the time that the reserves exceeded $80 billion.

The decision on calculating the OSF is the latest in a series of efforts by Iran, which is diplomatically hostile to the United States, to reduce the role of the dollar in its economy.

Iran has pushed for the Organization of the Petroleum Exporting Countries to switch from the dollar when calculating international oil prices, though it has so far received little support for the initiative.

The Iranian central bank has said it has been diversifying its reserves away from the dollar, but has not revealed details. (Writing by Hashem Kalantari; Editing by Andrew Torchia/Ruth Pitchford)

 

[jamal18]

The dollar is headed for a major crash; its value will go over a cliff.

This decreases the demand for the dolar and increases the downward pressure on it.

 

[sob]

Please note that countries like China, Japan, Russia have invested Hundreds of Billions on Dollars in US Treasury which of course is denoted in US$.

Do you think that they will let the Dollar crash. Remember for China it is in it's interest to keep a stron Dollar as it helps it's exports and builds up a positive Trade with the Americans. and what do they do with the positive inflow of money from expors -- they buy more US Treasury bills.

It will take more than One Ahmednijad to bring down the US $. this is the truth and we have to face it.

 

[warlock21]

^^^^^ China is buying Gold like Soap now a days and IMF along with some center banks are selling Gold like anything these days....Dollar is now carry trade currency... even Yen is more strong at this movement of TIme.

 

[Thomas]

^^^^^ China is buying Gold like Soap now a days and IMF along with some center banks are selling Gold like anything these days....Dollar is now carry trade currency... even Yen is more strong at this movement of TIme.

did you know that The U.S. has about 8x more gold in reserve then China?

 

[pkd]

Reality check
China's holdings of US debt exceed $800b

 

[warlock21]

did you know that The U.S. has about 8x more gold in reserve then China?

Buying Gold at 1000 USD mark is one thing and Holding gold is different thing...At world level it is chinese govt. now which is buying gold ... and most of the central banks and IMF are net sellers..... it is due to chinese action tht Gold prices are not coming down even when crude fallen a bit... otherwise both commodities are known to move in trandem.

 

[Developereo]

Buying Gold at 1000 USD mark is one thing and Holding gold is different thing...At world level it is chinese govt. now which is buying gold ... and most of the central banks and IMF are net sellers..... it is due to chinese action tht Gold prices are not coming down even when crude fallen a bit... otherwise both commodities are known to move in trandem.

Are you saying the Chinese are artificially holding up the price of gold?
If so, for what purpose?
Once they stop buying, the price would presumably fall back in line.

 

[warlock21]

Are you saying the Chinese are artificially holding up the price of gold?
If so, for what purpose?
Once they stop buying, the price would presumably fall back in line.

I am not saying tht chinese are doing this to hold price of Gold.... but their activity is supporting the price.... Be4 Jan2008 correction, chinese buying Dollar and so are the many central banks world over....coz US T-bills at tht time were considered safe havens... but not now... when dollar is making new Lows ...... gold is considered safe haeven and hedge against inflation... but the way china is buying .... I don't understand the reason.

 

[warlock21]

Gold from past 2-3 years is making Higher Lows and Higher Highs....It happened due to many reasons.....

1. Increase in volatility in equity markets.

2. Equity mrkets are tumbling... Return - of - capital become more Important then Return - on - Capital.

3. Inflation Increased in many Asian economies.

4. launch of Gold ETFs in many Developing markets.

Once they stop buying, the price would presumably fall back in line.

So due to above reason even in Economic downturn Gold prices reamain at higher end ...... and due to this it is not necessarily gold will fall.. even if they stop buying gold.

 

[BATMAN]

In any case this move certainly is not in the favor of US dollar.
Every one having assets in USD is going to share the resultant USD devaluation.
No one will have expcetion but China and USSR had their investments in US market funds based due to other factors and historic trend.
Having USD as reserves is a sucide and China buying gold is going to help stabalise strengthen its currency.
USD is a a debt currency and attaching it to your own currency is not wise idea.
Hence, countries out of US influence will continue to do what Iran and China are doing.
Gold is not going to come down any time soon it is simply because of awareness...
IMO....USD will continue to devalue in comming years.

 

[warlock21]

So the logical thing to do is..... Decrease ur Dollar Reaserve....

May be china is doing this by buying Gold.

Recent data shows tht in India also Dollar reserve came down...RBI is way ahead in all this... and regarding Gold reserve... Retail have more apatite then GoI....usully india Imports 800 tons of gold annaully...

 

[jamal18]

Please note that countries like China, Japan, Russia have invested Hundreds of Billions on Dollars in US Treasury which of course is denoted in US$.

Do you think that they will let the Dollar crash. Remember for China it is in it's interest to keep a stron Dollar as it helps it's exports and builds up a positive Trade with the Americans. and what do they do with the positive inflow of money from expors -- they buy more US Treasury bills.

It will take more than One Ahmednijad to bring down the US $. this is the truth and we have to face it.

Yes, entirely correct. A lot of countries hold billions of dollars; including, recently America's Arab 'friends' (servile idiots). It is in a lot of countries interest to prop up the dollar. But there is a limit to how long you can buck the market.

The dollar is held up by confidence, a commodity that is vanishing rapidly.

Once everybody realises that you simply cannot stop the inevitable, they will panic and dump the dollar overnight.

Hence, it will go over a cliff.

Another factor is the massive US debt, mainly to foreigners. Forget paying it back, the US won't be able to service it. And what do you do with a treasury bill that isn't paying anything...?

The basics are simple, a declining economy that lives off borrowed money isn't viable.

 

[SandsofTime]

Dollar won't be allowed to "go over the cliff" by any means. That would mean a lot of people would loose the value of their remaining assets. The more likely thing to happen is slow and gradual shift from dollars to other currencies and reserves, in the end resulting in a diverse mix. US economy is not going to go downhill but it will stagger and fail to grow significantly. The size of US economy is too large for things to turn bad overnight.

 

[warlock21]

well US Dollar is a carry trade currency now... and it is fine... Sell Dollar and Buy risky assets...and thts why US mkts are moving non-stop.