China Shifts to Euros for Iran Oil
March 28th, 2007Via: Intel Daily:
China’s state-run Zhuhai Zhenrong Corp, the biggest buyer of Iranian crude worldwide, began paying for its oil in euros late last year as Tehran moves to diversify its foreign reserves away from U.S. dollars.
Time to go long on EUR/USD…
60% of Iran’s oil is already sold in currencies other than the $USD. It will be 100% by summer according to the Iranians themselves.
Russia, Malaysia, Libya, Indonesia, and Venezuela all already accept currencies other than the $USD. With the $USD tanking, how much longer before other OPEC nations follow suit?
While I’m at it, one of the best “primer” (for the masses) articles I’ve ever seen on the issue, even if it is now a bit dated:
http://www.thirdworldtraveler.com/Iraq/Iraq_dollar_vs_euro.html
If you do not think that FOREX transaction have anything to do with you, look at this graph of the value of the Yen and the S+P 500!
http://kevinsmarketblog.blogspot.com/2007/03/stocks-are-still-following-yen.html
When Yen gets cheap, US stock soar. When it gets expensive they drop. Can you say ‘Carry Trade’? I thought you could.
When people borrow millions of Yen at almost 0% interest, they sell yen to buy dollars and invest in, say, US stocks. That drops the price of Yen and increases the prices of US stocks.
When Yen interest rates go up, they panic, sell stocks, sell dollars to buy back yen need to repay their loans making the US stocks go down and the Yen up.