The Iranians have chosen to up the ante and have decided to ditch the dollar.
Iran, the second-biggest producer of crude oil in the Middle East, has "completely halted'' all oil transactions in dollars, the state-run ISNA news agency said, citing Oil Minister Gholamhossein Nozari.
Looks like these guys are going to take the game to the next level After the release of the NIE this week the US is going to be hard pressed to respond with full-scale war. If you remember that were a lot of people that thought one of the unsaid reasons for the invasion of Iraq was Saddam's move away from the dollar. Not only have the Iranians ratcheted up the game but they could not have picked a better time to withdraw from dollar based oil. This is going to have an impact on the rest of OPEC...
The Organization of Petroleum Exporting Countries has set up a team to study pricing oil in another currency, the INSA cited Nozari as saying. The measure is designed to prevent further losses in revenue to oil exporters, ISNA reported.
The group's findings will be announced at the next OPEC meeting, Nozari said, according to ISNA.
I don't fully understand the economics of oil trading and what effect more of OPEC shifting away from the dollar will mean but I have a strong feeling it can't be too good for the dollar and our economy. Iran making this move may be the crack in the dike that allows others to move out as well. It is also germane to understand that because of Bush and Condi's misguided diplomacy we have managed to alienate even more of our Euro buddies. The recent push by ShrubCo to have more sanctions by our allies against Iran all the while knowing that their weapons program was defunct was a major slap in the face that won't soon be forgotten.
This might be the nudge that will put the U.S. into a depression instead of a recession next year.