Euros as a settlement currency

Colin Brace cwb at lim.nl
Mon Feb 17 10:38:58 PST 2003


In <002201c2d5f3$415b0ad0$0200a8c0 at big>, on 02/16/03

at 11:40 AM, "Steven" <mailinglist at navari.com> said:


> I do not recall any discussions in this forum regarding Iraq's decision
> (in Nov 2000) to change from the USD to the Euro as the settlement
> currency for it's oil sales, as well as their shift of the UN held 10
> billion in reserves from USD to Euro.


> Comments.

There is a long, very interesting article on this very topic on the Ithaca Indymedia site:

http://ithaca.indymedia.org/media/text/00/00/03/C5/

Here are a couple of snippets if you don't have time to read the full thing:

[quote]

"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).

[...]

"Saddam sealed his fate when he decided to switch to the euro in late 2000 (and later converted his $10 billion reserve fund at the U.N. to euros) - at that point, another manufactured Gulf War become inevitable under Bush II. Only the most extreme circumstances could possibly stop that now and I strongly doubt anything can - short of Saddam getting replaced with a pliant regime."

Big Picture Perspective: "Everything else aside from the reserve currency and the Saudi/Iran oil issues (i.e. domestic political issues and international criticism) is peripheral and of marginal consequence to this administration. Further, the dollar-euro threat is powerful enough that they'll rather risk much of the economic backlash in the short-term to stave off the long-term dollar crash of an OPEC transaction standard change from dollars to euros. All of this fits into the broader Great Game that encompasses Russia, India, China."

This information about Iraq's oil currency is *censored* by the U.S. media and the Bush administration as the truth could potentially curtail both investor and consumer confidence, reduce consumer borrowing/ spending, create political pressure to form a new energy policy that slowly weans us off middle-eastern oil, and of course stop our march towards war in Iraq.

[/quote]

--

Colin Brace <cb at lim.nl>

Amsterdam

http://www.lim.nl



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