Financial Times: Oil producers shun dollar

[DeepModem Mom]

Oil producers shun dollar
By Haig Simonian in Zurich and Javier Blas and Carola Hoyos in London
Published: December 10 2006

Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements.

The revelation in the latest BIS quarterly review, published on Monday, confirms market speculation about a move out of dollars and could put new pressure on the ailing US currency.

Market liquidity is traditionally low in December, and many traders have locked in profits, potentially reinforcing volatility.

Russia and the members of the Organisation of the Petroleum Exporting Countries, the oil cartel, cut their dollar holdings from 67 per cent in the first quarter to 65 per cent in the second.

Meanwhile, they increased their holdings of euros from 20 to 22 per cent, the BIS said. The speed of the shift may help to explain the weakness of the dollar, which recently fell to a 20-month low against the euro and a 14-year low against sterling....

http://www.ft.com/cms/s/277471c2-8889-11db-b485-0000779e2340.html

[krispos42]

1. Here comes the economic collapse

Goodbye, petrodollars, hello petroeuros.

Our oil-backed currency is about to go the way of the Republican House majority. Good thing I rent, I guess.

[Doosy]

2. Really?

[Miss Chybil]

3. Really, what? nt

[uppityperson]

20. Really!

[Miss Chybil]

21. He did disrupt poorly, for sure.

But, I'll always wonder, "What? Really."

[Bruce McAuley]

4. They're heading for the exit from petrodollars...

I guess I'd bet on the Euro getting stronger in the midterm.
Better look around and snag some if they go by. Fat chance here in small town America.
Wonder if I can buy them on eBay?
Or is it illegal to ship Euro cash into the US?
I dunno.

Bruce

[Acadia Blue]

6. I tried to buy some about 2 years ago, and the only source I could

find was a service near the airport that would exchange dollars for Euros.


Anybody know of other sources?

[robbibaba]

8. Owning Euros...

Probably the easiest way is to set up a savings account with an offshore bank such as Barclays or HSBC. They keep offices in the Isle of Man and also Jersey, islands between England and France, which have their own strict laws regarding banking rules. You can transfer money by wire and set up an account in euros or pounds there, once you jump through a few hoops--like sending notorized photocopies of your passport and such, to establish that you are a real person and not a criminal syndicate. It isn't too hard. You could try this link: http://www.offshore.hsbc.com/1/2/international/savings-accounts/serious-saver?HSBC_au=1&HSBC_ae=c&HSBC_ad=HBIB_2006_15_09_CAM0_Serioussaver1

Another way,if you want to invest money, is to open a Vanguard European Stock Index Fund https://flagship.vanguard.com/VGApp/hnw/FundsSnapshot?FundId=0079&FundIntExt=INT
which, even though it isn't really a green fund, at least is invested in Europe and has actually been doing really well for the past year or two. Of course, Vanguard is a US company.
Just some ideas....

[VegasWolf]

13. Barclays seems to be an excellent choice! I have a few friends that reccomend

them highly.

[VegasWolf]

12. You don't just buy euro's and stick them under your mattress!! Find a

good financial planner who will show you how to base your portfolio on euros. The hardest part is if you have a 401K with limited fund offers.

[gratuitous]

5. That's not true! The dollar is very popular

Saudi women report that twenty or thirty American dollars, rolled tightly, make an effective and inexpensive tampon.

[Acadia Blue]

7. What will the consequences be if lots of countries start dumping the

dollar?

[lumberjack_jeff]

10. Inflation and interest rate hikes.

Potentially very big inflation and interest rate hikes.

[VegasWolf]

14. The peso will look good next to the dollar then. Moving the remaining

petrodollars into euros will be a transfer of a trillion US dollars into euros. Very bad things will happen to the US.

[Mojorabbit]

16. I hate this imcompetent administration

They have bankrupted this country and now this. Will the world bank come in and parcel out our assets?
I only have a vague idea of what this all means except that it is bad.

[Bruce McAuley]

15. If it continues..

Our cushion of deficit spending will disappear, and we'll become just another declining economy, like Britain after WW2. We'll have to pay as we go.
Ouch.

Bruce

[Mojorabbit]

9. This is just wonderful...

I've read the only reason our money is worth anything is because oil is paid for in dollars. If this will no longer be the case will our dollar plummet?

[Mojorabbit]

11. Iran replaces dollar with euro in most oil dealings

Iran replaces dollar with euro in most oil dealings
TEHRAN, Dec. 5 (MNA) — Iran has started replacing dollar with euro in majority of its crude oil exchanges in the last several months, an informed source with Iran’s Oil Ministry said here on Tuesday.

Oil Ministry has taken the policy to substitute dollar with euro, and begun to implement it for most of its oil dealings, the source who spoke on the condition of anonymity told the Mehr News Agency.

“This can maintain the real value of Iranian oil,” he added.

The majority of Iran crude’s customers are Asian and European states, the source noted.

Iran is the number two oil producing member of the Organization of the Petroleum Exporting Countries (OPEC). It also stands second behind Russia in terms of gas reserves in the world.
http://www.mehrnews.ir/en/NewsDetail.aspx?NewsID=416994

[VegasWolf]

17. Watch Chavez follow suit. Bush will be the most hated man in America when

the dollar loses half of its value.

[VegasWolf]

18. The FT also reported a few months ago that VP Cheney had transferred

almost the entirety of his estate onto an euro footing and out of US dollars.

[zreosumgame]

19. MISSION ACCOMPLISHED!

the Saudi royals paid well for this mission...

[Mojorabbit]

22. k and r