Author Topic: Iran dropping the dollar as reserve currency  (Read 1322 times)

LetterRip

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Iran dropping the dollar as reserve currency
« on: February 03, 2017, 06:10:30 PM »
http://www.independent.co.uk/news/world/middle-east/iran-stop-using-us-dollar-currency-donald-trump-muslim-ban-immigration-refugee-iraq-syria-libya-a7556846.html

One of my predictions of a Trump Presidency was that the US dollar could lose its status as reserve currency status.

China, Russia, Iran, and Saudi Arabia all have the potential for ending the dollars reserve status.

http://www.manilatimes.net/americas-dim-mak-point-3-dollar-vulnerability/307684/

Under Trump - Iran, Saudi Arabia, and China all have motivation to do so.

If that happens, the purchasing power of the dollar will likely plummet.


Pete at Home

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Re: Iran dropping the dollar as reserve currency
« Reply #1 on: February 03, 2017, 06:13:54 PM »
Probably better make nice w Russia then.

Fenring

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Re: Iran dropping the dollar as reserve currency
« Reply #2 on: February 03, 2017, 10:27:02 PM »
This was going to be the threat with BRICS on the rise anyhow. If anything TPP was an attempt to rally many countries to fealty to the dollar, and now that it's officially been defeated (whoot) that does mean the threat against the dollar will continue. Petrodollars, in particular, have been entering dangerous territory of late, and technology may inevitably force change there regardless of who is President. This trend towards challenging Bretton Woods (i.e. supremacy of the dollar) began before this recent election, and I would count it as dubious to lay any of this at Trump's feet. What might happen, though, is that whereas an alternate President (like Clinton) might have strong-armed a scenario to delay the inevitable in order to appease her 'allies', Trump might obey no such fealty and therefore could perhaps cause an acceleration of what was going to come either way. This could certainly allow "news organizations" to pretend it's all his fault, even though his part might simply have been to choose the timing. I, for one, am not such a fan of extending the dying grasps of a broken system, so from that standpoint I will personally be very hesitant in pointing fingers at Trump on this topic in particular unless I see definitive cause to do so.

TheDeamon

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Re: Iran dropping the dollar as reserve currency
« Reply #3 on: February 04, 2017, 12:25:46 PM »
They've been scare mongering "the imminent end of the Petro dollar" since the creation of the Eurozone at the least, and I'm sure it's even older than that. A determined internet searcher should be able to find stories about how the Invasion of Iraq in 2003 was dooming the future of the dollar, as one example. (IIRC, there were even claims that Iraq was invaded because Saddam was going to start trading oil in a currency other than dollars)

14 years later, it's still here.

LetterRip

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Re: Iran dropping the dollar as reserve currency
« Reply #4 on: February 04, 2017, 04:19:48 PM »
The reason that the petrodollar hasn't been dropped is economic ties, without the US as a strong trading partner there is much greater motivation to move away from dollars - so things like trying to reduce trade with China or increasing US oil output give those countries a strong motivation to weaken the US economically.

So the reason we haven't seen the move away from the petrodollar/US dollar as reserve currency is that the past US Presidents haven't been making or planning the economic moves that Trump has made or is in the process of making.

If the world does move away - expect US purchasing power parity to drop by a half, and see the cost of borrowing sky rocket.

TheDeamon

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Re: Iran dropping the dollar as reserve currency
« Reply #5 on: February 04, 2017, 07:17:08 PM »
If the world does move away - expect US purchasing power parity to drop by a half, and see the cost of borrowing sky rocket.

...actually, there's another problem. And it's a bigger issue with the "Strong dollar" we've been enjoying. There are a LOT of foreign nations and nationals (plus corporations) with US$ denominated loans outstanding.

The funnier thing about many of those loans is that it isn't even necessarily Americans who are extending those loans, we're just the intermediary. So tearing down that particular system is going to be a ugly/messy process for a lot of involved nations.

China and Russia have been trying to set the stage for this for over 20 years, so it isn't surprising to see something actually begin to happen in a nation that the US had deliberately maintained marginalized trade relations with.