Monday, February 13, 2006

 

Syria Moves To Euros From US Dollar

Reuters reports on the latest currency development. "Syria has switched all of the state's foreign currency transactions to euros from dollars amid a political confrontation with the United States, the head of state-owned Commercial Bank of Syria said on Monday."

"'This is a precaution. We are talking about billions of dollars,' Duraid Durgham told Reuters. The bank, which still dominates the Syrian market although private banks have been allowed to set up in the last few years, has also stopped dealing with dollars in the international foreign exchange flows of private clients."

"The United States has been at the forefront of international pressure on Syria for its alleged role in the assassination of former Lebanese Prime Minister Rafik al-Hariri a year ago. Damascus denies involvement in the killing. 'It looks like a kind of pre-emptive action aimed at making their foreign assets safer, preventing them from getting frozen in case of any conflict,' said a Middle East economist who requested anonymity."

Comments:
If this were to catch on it would spell big trouble for the greenback.
 
Alot of analysts poo-poo the impact of an Iranian oil exchange, but I think any change, will continue to tweek the world's perception and where it looks for financial leadership.

Before you know it, we'll be checking the paper to see how many Euros buy an ounce of gold or a barrel of oil.

We've been sold out folks - all we make are dollar bills and soon noone will want them! Even so, we'll try desperately to ring the last $20, $40 or $60 out of our McSh*tBox only to see "insuffient funds." Then we'll hear weeping and gnashing of teeth. I need more coffee.
 
Not to repeat myself, but...

"Petrodollar Warfare" makes the case that the USD has been held up solely by oil. Otherwise, Greenspan's moves would've resulted in massive inflation. Definitely bad news.

Boy, between housing, the Middle East, etc. this is shaping up to be one very interesting year.

Gotta go buy some more metal! Nice little correction to buy into...
 
I don't like paying retail either - time to visit the ole' GLD store again!
 
Since the Euro has dipped to 2005 levels, and this news came out, I picked up some Euro this morning. We'll see how that fairs.
 
This is especially interesting given Syria's extremely close ties to Tehran. This could easily be seen as a precursor to Iran's promised euro-bourse. ...Sort of an economic "shot across the bow".
 
sohonyc,

As Ron Paul has pointed out, it is only the USD's role as world reserve currency that allows us to export our inflation. One would think US geopolitics would take that into account. As the Iranians said, we need them more than they need us.
 
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