Russia to price oil in euros in snub to US

[Ketcham]

From the Telegraph:

http://www.money.telegraph.co.uk/money/main.jhtml?xml=/money/2003/10/10/cnoil10.xml&menuId=242&sSheet=/money/2003/10/10/ixfrontcity.html

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.

<snip>

[La_Serpiente]

1. Wow

Wow...That's wow...I wonder what's going to happen to the market today?

[nadinbrzezinski]

2. We know this is coming

I am considering an Euro account

[dutchdemocrat]

3. There goes the dollar

The implications on the economy anyone?

Who else prices petroleum in Euros?

Saudi
Venezuela
Iran
Iraq (they did anyway)
......

[punpirate]

4. This can hardly be described as a snub....

It's serious monetary business. Here's the reason why:

http://www.monbiot.com/dsp_article.cfm?article_id=572

Cheers.

[dutchdemocrat]

5. Nice link

Thanks

[Fish Eye]

12. excellent link!!!!!

I love reading Monbiot. I wish that more people did.

[ozone_man]

28. This was the best explanation I've seen of U.S. dollar hegemony

and the need to fight it by empowering the Euro as the world currency.

[TreasonousBastard]

6. Interesting.

It makes a lot of sense for them to do that. The EU is their largest trading partner, and it cuts out the vaguaries of an extra currency transaction.

Maybe a year or so ago I started seeing mutterings that Iraq was being targeted primarily because they converted to petroEuros from petroDollars, and some people in Washington were terrified that that would start a trend.

It seems it has. What a lot of people are missing is that while we may be the largest single purchaser of Middle East oil, we are not such a big exporter of anything over there. More importantly, anything we do sell them, they can get from Europe. It cuts their transaction costs to trade with Europe if they cut out the dollar, and that will not only increase our costs, but further reduce our exports.

The infidels are at the gates of the American Economic Empire, and it's only a matter of time.

I'd say being scared is rather sensible at this point.

[emad]

7. They are just playing the currency market

The Euro is the most obvious currency to manipulate

[dutchdemocrat]

8. Here's another opinion

The Euro Effect: The Real Reason for the War in Iraq
By W. Clark

SNIP

Although completely suppressed in the U.S. media, the answer to the Iraq enigma is simple yet shocking. The upcoming war in Iraq war is mostly about how the ruling class at Langley and the Bush oligarchy view hydrocarbons at the geo-strategic level, and the overarching macroeconomic threats to the U.S. dollar from the euro.

The Real Reason for this upcoming war is this administration's goal of preventing further OPEC momentum towards the euro as an oil transaction currency standard. However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves.

This lengthy essay will discuss the macroeconomics of the 'petro-dollar' and the unpublicized but real threat to U.S. economic hegemony from the euro as an alternative oil transaction currency. The following is how an astute and anonymous friend alluded to the unspoken truth about this upcoming war with Iraq:

"The Federal Reserve's greatest nightmare is that OPEC will switch its international transactions from a dollar standard to a euro standard. Iraq actually made this switch in Nov. 2000 (when the euro was worth around 80 cents), and has actually made off like a bandit considering the dollar's steady depreciation against the euro. (Note: the dollar declined 17% against the euro in 2002.)

"The real reason the Bush administration wants a puppet government in Iraq -- or more importantly, the reason why the corporate-military-industrial network conglomerate wants a puppet government in Iraq -- is so that it will revert back to a dollar standard and stay that way." (While also hoping to veto any wider OPEC momentum towards the euro, especially from Iran -- the 2nd largest OPEC producer who is actively discussing a switch to euros for its oil exports)."

Furthermore, despite Saudi Arabia being our 'client state,' the Saudi regime appears increasingly weak, threatened from massive civil unrest. Some analysts believe a 'Saudi Revolution' might be plausible in the aftermath of an unpopular U.S. invasion of Iraq (ie. Iran circa 1979) <1>.

SNIP

http://www.evworld.com/databases/printit.cfm?storyid=490

[Guaranteed]

9. Is that Wesley? n/t

[dutchdemocrat]

10. No it is not..

"About the author: William Clark is currently working as a healthcare manager at a well-known east coast university. He is not an economist, but has an MBA, and is currently a graduate student working on his 2nd Masters Degree in Information Technology/Information Security (or INFOSEC). The essay on Iraq was a personal research project and represents his first publication to date on geopolitical events. It was written purely out of patriotic duty, in an effort to inform the American citizenry and stimulate debate on the crucial but unreported issues surrounding the Iraq war. (Inquires regarding challenging opportunities from policy `think tanks' or INFOSEC organizations are welcome. Please write to [e-mail].)"

The freepers are all confused about it! Now how's that for funny :)

http://www.freerepublic.com/focus/f-news/860753/posts

[dutchdemocrat]

11. Full article by William Clark here.

http://www.ratical.org/ratville/CAH/RRiraqWar.html

[Nlighten1]

13. Russia needs LIBERATION!

We are going to need to invade them now.

[brainshrub]

14. We are soooo Screwed

I don't think you peeps understand the implications of this. We are so screwed. Pay your debts, open a European account and buy gold.
If Russia does this, the rest of the oil-produceing nations will do the same. When that happens, the dollars will be as worthless as toilet paper.
The Bush administration, by pissing of the rest of the world enough to start switching to Euros, has doomed us.

[M155Y_A1CH]

18. Absolutely right

This is a big hit on the power of the dollar.
If the world stops using the dollar it will lose value fast!

[MUAD_DIB]

19. These things could lead to two separate paths for us.

1) We dump President Crotchsock and his policies while going back to a more adult view of taxation and payment of our debt.

The world body sees that we are in check and don't sink us ...mainly because that will cause more problems than the world would be able to fix.

2) The U.S. takes an economic hit and President Crotchsock becomes the next Hitler. The poor, ignorant an sociopathic become the next crop of brownshirts and blackshirts, fooled by the Repugs, willing to fill the ranks of the Homeland Defense Forces.

...more pain to follow for the world.



While I really don't believe in option two I also didn't believe that Ahh-nold would not be voted in to lead California.

With the Mensa-level answers that came from his supporters such as "He is really cool" to "He'll make us money" leads me to believe that we could be seriously fu@ked and lead into option two.

Let's all just hope for option one.

[izzie]

15. But but Bush looked into this mans eyes and knew he was good.

Maybe Bush should have been sure he used the same tooth paste?

[MaineDem]

16. This is major news!

Will OPEC follow? That wouldn't surprise me in the least.

[cprise]

17. The naysayers will tell you

...that it's not a big deal because a weakened dollar will just mean a return of manufacturing to the US.

But if the world panics and wants to get rid of its dollars, then that could cause financial institutions in this country to collapse AND we wouldn't be able to buy foreign stuff which would become too expensive. And there's very little to our economy these days that isn't foreign stuff, virtually given to international corps. for free because of current high demand for the dollar (it is another reason why the rift between rich and poor here is growing wider-- average Americans still pay the corporations for those goods).

Our economy is a sick Ponzi scheme that could come crashing down on our heads. When oil producers switch to the Euro, they are merely jolting the table on which our card house rests; that is a grave risk. The establishment says, "big deal, that's just a shaking table and when they push one way it just returns to where it was... Noone is taking the table away people. Do your duty and keep buying stuff."

[ProfessorGAC]

22. Any Data To Support That Conclusion?

Didn't think so. It's just not economically sound to suggest that the form of currency used in the commodity transactions will negatively affect a macroeconomy.

When the dollar surpassed the pound in the early to mid-20th century as the currency of international commerce, the British economy didn't collapse. And they've NEVER had enough gold to back the total value of their currency.

You should make it clear that this is YOUR OPINION and you just don't like naysayers, like me, suggesting that your opinion might be incorrect.

BTW: Your scenario is exactly what the PNAC and AEI economists think, so you can decide if you're in good company or not.
The Professor

[cprise]

26. Britain had virtually no economy after WW-II

It had just been through two bloody wars. What did it have to export? To give other poeple in return?

We, on the other hand, have a lot to lose now, not the least of which is the world's confidence. Psycology is an important factor in how a currency is used because money doesn't DO anything except motivate people. Do people abroad continue to feel we have something to offer them? If not, they won't be so keen to accept and hold onto our dollars in return for their STUFF. A country that has little to offer is a country in its way to instability.

I am not an economist, but am happy to entertain AEI logic... fully expecting to rout their premise, of course.

And what is that old addage about controling the coinage, anyway? In this case, the coinage of the world. Why do economist say the world has granted us 'supernatural' staying-power against our immense and mounting debt?

What no one has explained to me is what possible role a petro-currency plays in the decision-making of say, the IMF or World Bank.

[northzax]

27. well, I can answer your last question

since well over 50% of the money that the World Bank and the IMF play with are US Dollars, provided by the US, I don't think it will hcange much.

what's interesting is that I don't believe there are actually enough Euro in circulation to replace the USD as the linga franca of currencies. It will take some time. If the Perto-Dollar switches to the Petro-Euro overnight, the devaluation of the Dollar and the immediate overvaluation of the Euro would cause financial havoc, at least temporarily. massive currency fluctuations are good for almost nobody, save the odd speculator.

[loudsue]

20. OPEC countries will likely do this one at a time .....

They just needed Russia to do it FIRST, (after Iraq and Venezuela) because they're too big for shrubbie & co. to go after with the military so over-stretched & demoralized.

My guess it's not in OPEC countries' best interests to totally, instantly, destabilize the world markets by everyone switching to the Euro at once. They really needed the "big guy" to do it first, and they will surely follow.

Who knows which OPEC country will be next. Iran has already been in the pentegon's cross-hairs, and our military is in the neighborhood, so it wouldn't be too far fetched to think the military might go after them, next....Euros or no Euros...but ESPECIALLY if they switched to the Euro.

And, yes, that did have a LOT to do with why shrub wanted to invade Iraq from the get-go...they had switched to the oil/Euro a couple of years before.

This is a "drip" that is a part of the greater "drip...drip...drip" that the rest of the world is going to do to bring down the shrub...and economically, it IS in their best interests to switch to the Euro, eventually.

We're screwed...and shrub & co. "brought it ON!" Until the repukes took over, the world was willing to have a "gentlemen's agreement" to keep the status quo, economically. These results show what the rest of the world thinks about repukes.

If shrub thinks the "terminator" is a real life character and is going to come to the rescue, he's just living in his little fry-brained fantasy world.

:kick:

[indepat]

29. We are indeed screwed, blewed, and tatooed: an economic disaster

might well be happening before our very eyes. Aren't we so much better off that 33 months ago?

[Spazito]

21. Wow!

I don't know what else to say but "WOW"!

[Spazito]

23. Kick

*

[hedda_foil]

24. Yen hits 3 year high against dollar.

Check this thread for details.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=160892

[w4rma]

25. This would not be happening if not for the neo-cons in our government

The neo-cons are destroying our country and our democracy to enrich themselves and their friends. :(

[maggrwaggr]

30. maybe this is why Poppy met with Putin

sorta makes sense, no?

You can bet the BFEE started switching their moolah to gold and euros right away after that.

[LibertyorDeath]

31. The shit has finally hit the fan. The idiot son & his administration

of greed have just been dealt a death blow.

[dArKeR]

32. My French friends told me if the US goes to war with Iraq it will push

Russia to align itself with Europe. In general, I find European people much more knowledgable. Now I've got to ask them if the other Eastern European countries are allowing us to put bases there, accepting our foreign aid temporarily, because they're poor, but in fact they have the same plan as Russia to completely align themselves with Europe once they've built up their economies.