Phorgy Phynance

Iran moving away from USD

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This makes perfect sense to me.

Iran Asks Japan to Pay Yen for Oil, Start Immediately

Is this the beginning of the end of the dominance of the USD? Talk about signs of the apocalypse! It will certainly be good for the Yen.

I’ve got a lot of time on my hands these days as I’ve just resigned from my previous job (and was immediately escorted to the door) and don’t start the new job until mid August. So instead of relaxing by the pool, what am I doing? Reading lots of news and starting blogs of course!

I’ve had the pleasure of meeting and listening to Al Wojnilower on many occasions. He is one of my favorite economists (if not THE favorite). The last time I heard him, he was similarly concerned about the maintainability of strong long-term economic growth in the US, but the one thing that he thought would keep things going is the dominance of the USD. As long as the USD is the dominant world currency, it is like having an “American express card with no limit”.

One reason among many for the dominance of the USD is the fact that oil is sold in USD. Or it was. I might actually have to dig up some numbers *gasp*, but with Iran selling oil to Japan in Yen and I believe increasingly selling oil to Europe in EUR, this is probably just more bad news for the USD.

By the way, I was having some work done on my (wife’s) car yesterday and while waiting picked up Financial Armageddon so that should explain it if I become especially gloomy over the next couple of weeks 🙂

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Written by Eric

July 13, 2007 at 8:12 am

Posted in Currencies, Oil

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