RTFA: http://www.energybulletin.net/12125.html

The Iranian government has finally developed the ultimate “nuclear” weapon that can swiftly destroy the financial system underpinning the American Empire. That weapon is the Iranian Oil Bourse slated to open in March 2006. It will be based on a euro-oil-trading mechanism that naturally implies payment for oil in Euro. In economic terms, this represents a much greater threat to the hegemony of the dollar than Saddam’s, because it will allow anyone willing either to buy or to sell oil for Euro to transact on the exchange, thus circumventing the U.S. dollar altogether. If so, then it is likely that almost everyone will eagerly adopt this euro oil system:

- The Europeans will not have to buy and hold dollars in order to secure their payment for oil, but would instead pay with their own currencies. The adoption of the euro for oil transactions will provide the European currency with a reserve status that will benefit the European at the expense of the Americans.

- The Chinese and the Japanese will be especially eager to adopt the new exchange, because it will allow them to drastically lower their enormous dollar reserves and diversify with Euros, thus protecting themselves against the depreciation of the dollar. One portion of their dollars they will still want to hold onto; a second portion of their dollar holdings they may decide to dump outright; a third portion of their dollars they will decide to use up for future payments without replenishing those dollar holdings, but building up instead their euro reserves.

- The Russians have inherent economic interest in adopting the Euro – the bulk of their trade is with European countries, with oil-exporting countries, with China, and with Japan. Adoption of the Euro will immediately take care of the first two blocs, and will over time facilitate trade with China and Japan. Also, the Russians seemingly detest holding depreciating dollars, for they have recently found a new religion with gold. Russians have also revived their nationalism, and if embracing the Euro will stab the Americans, they will gladly do it and smugly watch the Americans bleed.

- The Arab oil-exporting countries will eagerly adopt the Euro as a means of diversifying against rising mountains of depreciating dollars. Just like the Russians, their trade is mostly with European countries, and therefore will prefer the European currency both for its stability and for avoiding currency risk, not to mention their jihad against the Infidel Enemy.

…painting the picture.

RTFA: http://www.time.com/time/magazine/article/0,9171,9…

Europe’s dream of promoting the euro as a competitor to the U.S. dollar may get a boost from SADDAM HUSSEIN. Iraq says that from now on, it wants payments for its oil in euros, despite the fact that the battered European currency unit, which used to be worth quite a bit more than $1, has dropped to about 82[cents]. Iraq says it will no longer accept dollars for oil because it does not want to deal “in the currency of the enemy.” The switch to euros would cost the U.N. a small fortune in accounting-paperwork changes. It would also reduce the interest earnings and reparations payments that Iraq is making for damage it caused during the Gulf War, a shortfall the Iraqis would have to make up. The move hurts Iraq, the U.N. and the countries receiving reparations. So why is Saddam doing it? Diplomatic sources say switching to the euro will favor European suppliers over U.S. ones in competing for Iraqi contracts, and the p.r. boost that Baghdad would probably get in Europe would be another plus.

FYI

RTFA: http://www.presstv.ir/detail.aspx?id=41594&section…

The Iranian Company of Commodities Bourse has been tasked by the government to establish the long-awaited Oil Bourse on Kish Island.The Cabinet of Ministers on Sunday issued an order to the Oil Ministry, Finance Ministry, Foreign Ministry and Central Bank to implement a plan to set up the Oil Bourse. The Oil Bourse will serve as a place to trade oil products and crude oil.The Ministry of Economy will be setting up the petrochemicals section by February 19. The Oil Bourse is supposed to trade oil products in non-dollar currencies and many analysts hold the opinion that it could deal a blow to the already declining greenback.