Syria switches to euro amid confrontation with US

[bemildred]

DAMASCUS (Reuters) - 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.

Reuters

[stepnw1f]

1. I'm Beginning to see a Pattern

with country's investing in Euros as opposed to investing in dollars.

Thanks Neo-Con assholes!

[loveandlight]

7. switch to Euros in not on the neo-cons

I don't want to be defending the neo-con actions in any way, but the switch to the Euro in other countries is a strategy that began before their current take over at least. In fact, it is probably one of the reasons for the U.S. going into Iraq, a little more involved that just about oil control but also market control as many countries are switching or threatening to switch to the Euro. Iraq did it just before we bombed them in 2003.

I will fault the neo-con cabal in how they are handling this trend in the world, by thinking that muscle and might and threats to the world at large will keep our country on top instead of dealing with a changing economic picture in the world, where the U.S. will no longer be the sole dominant imperialist power. The steal from the world, trash it and consume until we fall down in gluttony attitude of this country has got to change and no military threats will keep the rest of the world at bay any more. Countries around the world are finding their own strengths, China, many South American countries, we can't fight them all though that is what the neo-cons would have us do. There have to be better, more world friendly, less selfish and deadly ways to deal with the declining economic strength of the U.S., but those currently in power are going to fight to the death (our death, the death of the world) to keep themselves on top.

So no, the switch to euros is not their fault, it's just a symptom of an economic decline that has been happening in this country for a long time now. Let's fault them instead for the horrendous ways they chose to deal with this fact.

[KAZ]

10. Excellent post.

And IMHO, spot on.

[loveandlight]

15. thanks back...

I've been here for a while but only recently have begun to post. I think I just feel the need now to express my thoughts somewhere, since the amount of info on these folks is becoming overwhelming to deal with. If only we could get it out to the general public in an accessible way, but also offer a strategy for how to deal with it all.

[stepnw1f]

11. good post

thank you.

[Solon]

14. Excellent post...

Spot on as well, the trends started before Bush assumed power, and they will countinue after he leaves. His inside circle has made foul up following disaster that has possibly weakened the nation in ways that will be felt for decades afterwards. Militarily and Diplomatically, we had power, our Economic power has been waning for some time, now Bush has squandered the other two to our sorrow.

[BattyDem]

18. Terrific post!

I'm bookmarking this one. It sums up the situation perfectly. :-)

Welcome to DU! :hi:

[dysfunctional press]

22. yes and no...

it's the policies and mindset of the neocons that has been increasingly influential on, and the driving force behind, much of the american imperialism that is convincing more and more countries to turn away from the U.S.

[cantstandbush]

43. Uh oh, this is what Saddam was about to do just before we invaded.

Quiet as it is kept.

[leesa]

73. And what Iran announced it was going to do just before we ramped up the

saber rattling. Changing the almighty petro dollar seems to rile us.

[ShockediSay]

8. could presage a run on the dollar, and collapse

especially with all that deficit out there in foreign hands

as I recall So Korea made a move slightly in the same direction some months back

now all China has to do is follow Syria's lead, and the dollar's buying power is cut in half, for oil and other world goods, and that means skyrocketing inflation here &c &c

[phoebe]

25. doubt it - US will no doubt put pressure on France (Syria's ally) to

freeze assets and thus prevent Syria's play. It's a giant chess game.

If France chooses not to play ball then Russia and China will step in provided that Syria can be used to their advantage against the US. If not, Syria will be left in the cold and the US "wins" again..


on edit - thanks for the love from my mysterious DU valentine..

[sidpleasant]

26. China is already moving away from the dollar

Last year the Chinese replaced the system that coupled the value of the yuan to the US dollar with one where the yuan was tied to a "basket" of currencies including the dollar, euro, and yen. The Chinese won't say exactly what percentage of the "basket" each currency represents, but the Finance Minister let it slip last week that the dollar makes up less than half of the basket.

[Tight_rope]

53. Me too!

[MADem]

2. Well, gee, they'll have to be punished, ah reckon....

When do we suppose the Monkey will flip the coin...Syria, heads, Iran, tails?

[stop the bleeding]

3. well kiss Syria good-bye - US will not stand for this n/t

[Javaman]

21. Just wait till march, when Iran starts dumping the dollar for Euros...nt

[HereSince1628]

4. Are the Syrians really much of an economic threat?

or are they the Muslim canary in dark hole Bush has been digging for the US?

[DancingBear]

5. It's the symbolism, not the substance

It is the first (I believe) Middle Eastern country to change over to the euro, making it OK for others to do so.

And we all know what happens if the oil boys switch...

"Paging Iran, paging Iran... pre-emptive US strike to make sure your oil flows in US dollars on Line 1..."

[auagroach]

47. Sadaam was First

Iraq was the first West Asian nation to switch.

[bemildred]

6. Probably not.

Just doing the same as Iran did a few days back anyway. It think of this more as a canary in a coal mine, and the canary looks a bit sick.

[BeHereNow]

24. "The canary is showing exposure to the avian flu...

expected to spread through the region soon."
(Latest breaking news from the world health organization)
BHN

[WhiteTara]

9. Boy the bullies are going to go get them for sure!

Yep, can't have true free trade...it's only on our terms.

[TriMetFan]

12. I hate being mean about our Nation, but......

If bush bots think it will be a easy walk over Iran or Syria this Nation of ours will be for a rude wake up call. I think we will see lots of our men & women in body bags.

[MrPrax]

13. Bad journalism...

"Syria has switched all of the state's foreign currency transactions to euros from dollars amid a political confrontation with the United States

Reuters is implying that this is the confrontation, when the confrontation is merely the US alleging a role in the Hariri assassination (not mentioned until the 4th paragraph)...which no longer seems as clear-cut as it was.

Doubtful this will be the 'Nixon' moment everyone is waiting for...that will happen sooner or later.

[LynnTheDem]

16. There Syria goes again

pissing orf the bush regime.

[Earth_First]

17. On the relative eve of the Iranian oil bourse...

I'm expecting major developments in Iran here in the near future regarding Iran. Secondly, would Syria really do this if they did not believe that Iran's bourse had any traction?

[reprobate]

19. So it's now Iran, most of Iraq, Syria, against our invasions.

And maybe Saudi Arabia too if things flash over there and maybe Egypt? Mad George has put 130,000 of our boys and girls at extreme risk.

Not to mention the entire economy of the United Slave States of Americ.

[pinniped]

20. I was just thinking about this yesterday.

--Rafik al-Hariri--

The nutz were ready to invade Syria over this dude.

What happened, the last witness backed out and admitted he lied?

[IndianaGreen]

23. This is to be followed by Iran's oil burse in March!

Google "Iran oil burse" and you will get plenty of info as to why Bush is rushing to war in Iran, it has nothing to do with nukes, and lots to do with the Iranian burse (pricing and selling oil based on euros and on the Persian Gulf crude, not North Sea oil).

[Maddy McCall]

28. Yes. In two weeks, Iran switches to the Euro on all oil transactions.

This will further de-value the dollar, which begs the question, is the imminent action against Iran really about nukes or is it about fomenting a coup to install a US (dollar) friendly leader.

[mom cat]

44. You mean just like we did in Iraq?

Probably!

[dipsydoodle]

64. No - like "we" did in Iran in 1953

Suggest you search Iran 1953 for the full appalling details. By "we" I mean the USA and UK.

Forward dear reader........

[MasonJar]

27. Why would we expect countries we villify to maintain our currency?

I do not blame Syria or Iraq or Iran or any other country for moving to the Euro. After all our dollar is being held up by China and Japan. and they appear to be getting pretty wary of it themselves.

[auagroach]

48. Why Blame?

Encourage them!

[Gloria]

29. Story goes on to say that Syria has dealt effectively with pressures

on it from the US.....

****

"The government, controlled by the Baath party for the past for 40 years, has proceeded with steps to open up the economy after decades of central planning, naming on Monday a board to head up a stock exchange under formation.

Joe Sarrouh, a senior executive at Fransabank in Beirut, said: "To its credit, the government managed to keep the economic cycle going; imports, exports and tourism did not suffer a major blow. The have reacted effectively to pressure."

One economist said the euro move by the Commercial Bank of Syria "looked like a kind of pre-emptive action aimed at making their foreign assets safer and preventing them from getting frozen in case of any conflict".

[OKNancy]

30. kick

[Solve_et_Coagula]

31. Syria switches to euro amid confrontation with US

Syria switches to euro amid confrontation with US

Mon Feb 13, 2006 10:31 AM ET165

DAMASCUS (Reuters) - 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.

http://today.reuters.com/news/newsarticle.aspx?type=politicsNews&storyid=2006-02-13T153028Z_01_L13432231_RTRUKOC_0_US-SYRIA-US-FOREX.xml&rpc=22

[The Backlash Cometh]

32. Oh, good. It's just a matter of billions of dollars.

We spend that every few days in Iraq.

[Beetwasher]

33. Well, That Can't Be Good

n/t

[auagroach]

51. Don't Understand, Beetwasher

Why isn't this good? An enemy of our enemy is our friend and anybody assisting to take down this illegitimate cabal is our ally.

[Adelante]

54. Welcome to DU, auagroach!

:hi:

[Zodiak]

34. wow....didn't see that coming

Not exactly the Iranian Oil Bourse, but still, damaging nonetheless. Something tells me that all of this transition from one currency to another would be far more smooth if * hadn't pissed off every country in the world.

Great job, freepers....you destroyed my country and gloat about it. Sick fuckers.

[acmejack]

35. a few hours late it seems

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2105616

[no_hypocrisy]

36. I figure that * can't invade EVERY country that switches to Euros.

I don't think this will take the heat off of Iran though.

[Laelth]

37. Whoa!

It's starting. This is a very significant little bit of news.

Iraq got invaded, principally, for one reason. Saddam Hussein switched from selling oil in dollars to selling oil in euros. That got him "removed" from office. The neocons are beating the war-drums against Iran because Iran plans to start selling oil in euros in March of this year. The U.S. is able to deficit spend like we do and amass incredible national debt because people want our dollars to buy oil with. Our ability to deficit spend will dry up when nations don't need our currency to buy oil. It will be very, very bad for the U.S. economy if this trend continues. Hold on to your seats, folks.

-Laelth

[auagroach]

52. Bad poster, no doughnut. double post

[Laelth]

55. Dupe.

Self-delete. Dupe.

-Laelth

[auagroach]

56. Sorry, Laelth

Don't mean to quibble but, "...they want our dollars..." should read, "...they need our dollars..."
because the same gangsters that run the int'l gold market run the oil market and it is impossible to buy oil in any other currency except in Fedral Reserve Notes. That's why the Iranian Oil Bourse is such a threat. Countries are required to stockpile dollars to be able to purchase oil (Petrodollars)but that is set to change this March. If it plays out the way many suspect inflation in the States is set to soar with the onslaught of returning dollars. It may not transpire overnight but then hurricanes and avalanches don't either. Hope I don't sound too pendantic, just trying to get my head around it too. If it does happen some advise to be invested in gold and/or silver though one should do their own research.

[Laelth]

57. Hehe. Again ...

No need to apologize. ;)

And, welcome to DU! :patriot:

-Laelth

[auagroach]

59. Since we're on the subject...

Have you seen this...http://www.vdare.com/roberts/060210_oil.htm yet? I'm very suspicious of it myself. This guy is one of these, "Seen the light Reagan Repubs turned against Baby Bush now" but is saying nothing to worry about re: the Iranian Ouil Bourse. Sounds like wishful C.I.A. psy/ops to me but what do I know? What do you think?

[Laelth]

62. I had not seen that.

Not sure what to make of it. Its author, Paul Craig Roberts, is supported by Lexington Research Institute and The Center for American Unity, neither of which I am familiar with. (look like racist, neo-nazi, jingoistic pro-european groups to me) I agree with Roberts that we will incur a lot of red ink if we invade Iran. I think he's dead wrong to dismiss the effects of Iran selling oil in Euros. He admits that there will be some inflationary effect, so he's not a complete nut, but I think he underestimates the impact.

imho

-Laelth

[muriel_volestrangler]

66. What's the relative amount of oil traded, compared with the cash accounts

that countries and traders keep in dollars for trading in the currency markets? We need to know that to know whether the currency used for oil trading will be relevant. We also need to know how much of the world's oil goes through the 2 existing large bourses, and how much is traded in contracts reached elsewhere. Have you seen these figures?

Personally, I don't think the Iranian oil bourse (if they do decide to use the euro - their last public pronouncement, back in Septemeber, was that they had not decided to) will have much of an effect. For instance, the total amount tarded in currency each day is enormous:

An estimated 1,500 billion US dollars are traded each day on the world's foreign exchange markets. Most transactions are for less than one week - most within a day - and the interbank share is approximately 70-80 per cent of the total. To a large extent, the high volume of the transactions reflects genuine needs to cover currency risks and spread the risks among different participants in the exchange market, in much the same ways that insurance risks are distributed on the international reinsurance market. Certainly, a single trade transaction may easily result in ten currency transactions because the currency risk is passed around among currency dealers like a hot potato. In most countries there are strict regulations regarding how much uncovered currency exposure banks may accept.

http://www.globalpolicy.org/socecon/glotax/currtax/2001/ICCTobin0114.htm

Compare that with:

On average 68 million barrels of crude oil are produced each day (2000 figures), 32% of it in the Middle East, the single most important oil producing region in the world. About 60% of all the oil being produced is already committed and 40% is sold on open markets.

http://www.people.hofstra.edu/geotrans/eng/ch5en/appl5en/ch5a1en.html

So that's 40% of 68 million barrels, at, say $70 a barrel, which is nearly $2 billion a day traded on open markets. Compare that with the one tenth of the $1500 billion that the first article estimates is actual trade transactions, rather than currency market churn - $2 billion v. $150 billion. Or perhaps use the figure the CIA Factbook gives for total world exports - $9 trillion a year, or about $25 billion a day. Even with this lower figure for world trade, the oil markets are about 8% of the total. Then you have to decide how much of that trade Iran will actually win for its new market. It's probably going to be less than 2% of world trade for the forseeable future.

I think Roberts is right - use of the euro for oil transactions is more of a symptom than a cause. The bigger question is whether foreign countries will continue to invest their profits in US government bonds, or if they'll become less willing to - in which case US interest rates will have to continue to rise to get people to lend the government money. There's a similar problem with the US current account deficit - either US companies sell off assets abroard, or foreigners buy assets in the US, to cover it. In the long term, this has to be balanced somehow. I think the US dollar will have to decline in value - but if US interest rates stay high, that will be resisted. That's the problem with double deficits.

[Gloria]

38. Syria Picks Euros Over Dollars--

http://english.aljazeera.net/NR/exeres/ABA36728-9F9D-4A2C-8F37-9C3230B7E971.htm

Syria picks euros over dollars

Tuesday 14 February 2006, 3:44 Makka Time, 0:44 GMT

REUTERS
Syria has switched all of the state's foreign currency transactions to euros from dollars amid a political confrontation with the United States.

Duraid Durgham, the head of state-owned Commercial Bank of Syria, said on Monday: "This is a precaution. We are talking about billions of dollars. Switching to the euro will help us avoid settlement problems in the United States.

"The move is also needed to avoid complications with our correspondent banks, which have expressed a preference to deal in euro under these circumstances."

Most of the government's foreign currency flows goes through the Commercial Bank, whose US assets were frozen by Washington in 2004 as relations with Syria deteriorated.

The bank, which dominates the Syrian market, also stopped dealing with dollars for international private flows, such as imports, exports and letters of credit, Durgham said.

****************

Story goes on to say that Syria has responded well to pressure exerted by the US....They've been effective in dealing with it.....

MORE

[MadMaddie]

39. Guess Syria is the next on the march to war....

[Gloria]

40. Sorry, dup....

[bemildred]

42. De nada ...

:hi:

[napi21]

41. I doubt this will make much of a ripple in the financial market.

Now, if, or when, Iran or Saudi Arabia does the same thing, Katie BAR THE DOOR!

[auagroach]

58. Hey napi21

Could you please look at my post #56 unless you feel that you can answer whether this will happen overnight or will it be a gradual build-up? I tend to think the latter but your "Kaite-bar-the-door" remark implies a sudden action. Is that what you meant and why? Cheers

[napi21]

61. I think one of the reasons Shrub invaded Iraq is because

Saddam was planning to switch to eugo base for selling his oil. The Euro has been surpassing the Dollar for over a year. Many people are switching to investing in the Euro, including Bill Gates, and he's got the $$ to make an impact!

I'm sure no finance guru, but everything I hear indicates a panic. That's the reason for my Katie bar the door comment.

The market hasn't been doing anything logically in recent years. I don't think that's going to change.

[Nothing Without Hope]

45. Iran is scheduled to open a Euro-based OIL BOURSE this spring

and many believe this is related to the fear- and warmongering agitating for invasion of that country.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=104&topic_id=5650584&mesg_id=5651316

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x187934

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x199112

[cliss]

46. I agree, this is a Very big story.

Watch Washington over the next few days. They've got their hands full right now!!! Cheney's shooting spree, the war drums are beating against Iran, Afghanistan is a mess and Pakistan is ready to blow. Central & South America is a gigantic left-leaning tsunami that's building up steam. Hugo Chavez of Venezuela is leading the pack.

Let's see how many balls they can juggle simultaneously. How many battles can you wage at the same time, Bush and Cheney?

Cuz you two are a little preoccupied.

[bemildred]

49. I think the Bushites are losing control of the agenda.

And you are right, things could get "interesting" real soon, they must stanch the haemorrhage somehow or it's all over. Power is the expectation of being obeyed, the disobedient must be punished, and once that is not possible, and seen not to be possible, your power is gone ...

[Clara T]

50. Rec'd- kick for all to (must) see

and understand.

[auagroach]

60. A "Must See" Parting quote

Yes I was one of the dumbed down Americans that didn't care that our goverment bank is privately held.
"Give me control of a nation's money and I care not who makes it's laws" -- Mayer Amschel
Bauer Rothschild
I just hope others have and take the time to come to grips with the economic machinations that have been taking place in our name.

[cliss]

63. OK: here's my take on this situation -

so Syria has just switched, or is going to switch to Euros. This will a double-bonus: the Syrians will be able to slap Washington across the face for calling them the "axis", and plus they'll be able to make a little money on the side in currency appreciation.

It's not as easy as it looks.

First of all, the dollar hegemony is one Gigantic Shell Game. Let's say Syria dumps the dollar. Iran will open its Euro-bourse on March 20. Chiina has already said it wants to get out of some US dollar holdings. Saudi Arabia is pissed because all of their Petrodollars are in U.S. dollars, and the've been going down. It pisses them off because while they thought they haad $100 billion dollars, in fact they only have $80 billion because the dollar is sinking.

The problem is that if they dump the dollar, this will bring about its demise faster. Whatever they have in dollars, they'd better be the FIRST ONE to dump it, or they'll get caught with a bunch of nothing.

This is the classic game of Prisoner's Dilemma. All the players want to get out of the trap. But the first one to do so will guarantee the outcome: total collapse. So they hesitate....

[auagroach]

65. Mexican Standoff?

Apologies for the politically incorrect analogy but we've all seen the movie scene where some character pulls a gun and then someone behind him pulls a gun on him/her and then someone behind him/her pulls another gun until until all these umpteen characters are pointing guns at each other in a sequence and the the first person to pull the trigger wins and kaos ensues. Hold on to your gold and silver hats. Speaking of Mexico...

Mexico Mulls Silver Lining Against Currency Crash
By Reuters
Oct 31, 2005, 10:42

Mexico Mulls Silver Lining Against Currency Crash

By Pav Jordan

MEXICO CITY -- An influential Mexican businessman wants to
reintroduce silver coins as legal currency -- as in Mexico's 16th
century heyday -- and, farfetched as it may sound, the idea is
winning support.

[maddezmom]

67. kick

[Dover]

68. Syria Switches From Dollars to Euros

Feb. 14, 2006, 9:42PM
Syria Switches From Dollars to Euros


© 2006 The Associated Press

DAMASCUS, Syria — Syria has switched the primary hard currency it uses for foreign goods and services from the U.S. dollar to the euro in a bid to make it less vulnerable to pressure from Washington.

The decree signed by Syrian Prime Minister Naji al-Otari on Monday ordered government bodies and public-sector companies to use euros to pay for foreign transactions, including payment for exports.

The head of the state-run Commercial Bank of Syria, Dureid Dergham, was quoted as saying Tuesday that the switch to euros was "important and necessary in light of the current U.S. threats against Syria, and the ensuing complications in banking procedures and transfer operations to Syria from U.S. and European banks."

"The step aims at avoiding any future disturbances," Dergham told the state newspaper Al-Thawra. Dergham was not available for comment Tuesday...cont'd

http://www.chron.com/disp/story.mpl/ap/business/3660174.html

[orleans]

69. bomb them!?

(that is the basic plan/objective right? i'm surprised there weren't WMD there last week--we should've bombed them last week before they switched. cheney and rove aren't on top of their game lately. (Thank god!))

[Dover]

70. They're much too busy shooting each other....lol!

All kinds of bombs dropping on them lately.

[punpirate]

71. Hmm, will there now be a flurry...

... of stories about Syria's financing of terrorism, say, in Lebanon, and that their international accounts have been seized?

[Wwagsthedog]

72. Watch out for falling dominos! nt