Iran converts to the Euro.

[shadowed by the secret police]

http://english.aljazeera.net/NR/exeres/57E...7235A4BD8B6.htm

I wish China would do the same thing!

[razboz]

How does this change anything? Apart from being an obvious snub in the face of Uncle Sam, i dont see how calculating your budget in dollars or euros changes anything economically.

[Sadena Meti]

The central bank is also converting its cash reserves from dollars to euros. This will result in the dollar losing a tiny bit of value. Also the more countries that use your currency for their reserve, the stronger and more stable the currency.

If China were to dump the dollar for the euro, the dollar would probably collapse. They have something like 1 trillion in reserves.

[razboz]

Originally posted by rev-stoic@December 18, 2006 06:34 pm
The central bank is also converting its cash reserves from dollars to euros. This will result in the dollar losing a tiny bit of value. Also the more countries that use your currency for their reserve, the stronger and more stable the currency.

If China were to dump the dollar for the euro, the dollar would probably collapse. They have something like 1 trillion in reserves.

Oh i guess that makes sense, in a twisted economics way.

*Edit*

I just found this:

If you thought record oil prices this year were a pain in your wallet, there’s more bad news on the horizon. The latest Bank for International Settlements quarterly report, which tracks the investment trends of oil-producing countries, indicates that Russia and OPEC countries are moving their holdings out of dollars and into euros and yen. OPEC cut its holdings in the dollar by more than $5 billion during the first and second quarter of 2006. And Russia now keeps most of its new deposits in euros instead of dollars.

That decrease is swift and significant—and helps to explain why the dollar recently fell to a 20-month low against the euro and a 14-year low against the British pound. Holding dollars while other currencies gain strength means less profit for oil producers. But if they rapidly divest themselves of dollars, it may weaken the currency and push up inflation in the United States. “This new trend may be bigger trouble for the United States than high oil prices and surging Chinese exports,” says Nouriel Roubini, a professor at New York University’s Stern School of Business. If this year’s move away from the dollar is a sign of future thinking by oil producers, the pain felt at the pump may soon be the least of our worries.

From http://www.foreignpolicy.com/story/cms.php..._id=3652&page=0

Not exactly the same thing but similar. Kind of. Heck im not economist i just saw dollars, oil and euros in the same paragraph so i decided to go for it.

[The Unholy]

There have been some articles passing on the internet today, mostly message boards, that claim China is about to dump 1 trillion in reserves. I have not been able to verify this with any credible sources, so it sounds like BS. There may however be some truth...HERE is a google search results.

[Guerrilla22]

Yeah this great because the European Union isn&#39;t capitlist, unlike the US... <_<

[Janus]

How does this change anything?

Well, if all of OPEC switched to the euro, then that would severely damage the value of the dollar.

I wish China would do the same thing&#33;

China needs US dollars in order to buy oil from OPEC and dropping the dollar would also severely damage their trade with the US.

[piet11111]

Originally posted by Guerrilla22@December 19, 2006 01:00 am
Yeah this great because the European Union isn&#39;t capitlist, unlike the US... <_<

an economic crisis in america would also turn around to kick europe in the nuts.

if this happens fast enough it might just cause the biggest crisis of capitalism since the great depression.

[SPK]

Originally posted by piet11111@December 19, 2006 07:22 am
an economic crisis in america would also turn around to kick europe in the nuts.

if this happens fast enough it might just cause the biggest crisis of capitalism since the great depression.

A decrease in the value of the dollar, which is already underway, will increase the cost of products imported into the usa -- since more dollars will have to be exchanged to get the same amount of foreign currency (yen, euro, yuan). That would certainly harm the EU, China, and Japan, at least in the short run, since a high proportion of their manufactured goods are for export markets, not internal, consumer or business markets. A reduction of demand from the usa could very well push these countries, and the international economy as a whole, into recession.

They could try to increase internal demand, in order to absorb the goods that no longer have a foreign (amerikan) outlet. China&#39;s economy is growing at about 10% annually, so its internal market is rapidly developing -- people there are able to buy more cars, houses, and so on. The question is whether or not this is happening fast enough to offset reduced amerikan demand.

Japan&#39;s economy is quite weak and went through a deflationary phase in the nineties. Should a global recession cause overall prices to drop there again, Japan will probably not be able to rely on its internal markets (setting aside other important questions). If, as an example, consumers could purchase something for 1,000 yen one year, but for only 950 yen the next year, there will a tendency for people to hold onto their money and wait for lower costs, reducing overall demand.

The EU is in a stronger position, and the bourgeoisie there probably has more options in terms of strengthening internal markets.