On 2/8/08, Ed <
plug@0x1b.com> wrote:
> Iran is just moving their transactions outside the dollar zone because
> we can freeze any funds that would clear back to them, if we had to.*
> There will be an overhead penalty for any bourse participants and any
> efficient market(oil) will ignore such a provincial bourse.
I'd hate to break this to you, but the international crude oil trade
is far from an 'efficient market'. Ever hear the term 'Oil Cartel'?
Come on people, we keep seeing this pattern... someone gets up and
claims theyre are going to nationalize a countries oil reserves
(Venezuela), and our military goes in a frenzy. Do you know anything
about the actual history of Iran? Do you know how the revolution
started in the first place? Do you know who put the Shah in power?
You're suggesting that the Iranian Oil Bourse is some kind of renegade
from the free market.
http://en.wikipedia.org/wiki/Mohammed_Mossadegh
"He was also the architect of the nationalization of the Iranian oil
industry, which had been under British control through the
Anglo-Iranian Oil Company (AIOC), today known as British Petroleum
(BP)."
The basis of this whole phenomenon is the *petrodollar*.
"Supporters of this hypothesis believe that the value of the U.S.
dollar is determined by the fact that many key commodities
(particularly oil and natural gas) are denominated in dollars."
http://en.wikipedia.org/wiki/Petrodollar_warfare
I'm certainly picking up a lot of attempts to cool this issue off
from 1) what a bunch of conspiracy nutbars! tinfoil hat, etc. ... to
2) now this kind of thing happens all the time.
-jmz
> It is only
> really there as a contingency, insurance, given the fact that most of
> Iran's foreign exchange is from petrochemicals and they are becoming
> increasingly dependent on it for consumables (refined product).
> Customers on Iran's bourse** will have trouble trading on other
> markets if our relationship with Iran ever really goes south.
????
> I can't
> imagine being a market maker on the floor of that bourse, think about
> selling into a down tic - you might get away with doing it
> once...maybe.
>
> Any financial institution (bourse) in a regime that forbids interest
> is a complete fish out of water, and is unlikely to grow beyond it's
> granted feedstocks and government inspired churning - The important
> informational effects one expects from an open and efficient market
> are unlikely to develop. On the other hand, a bourse operated in
> compliance with Islamic religious law should have some appeal to
> traders in the region, and would make a very interesting case-study. I
> just don't think it would draw much volume from what are some of the
> most efficient markets to date. So, I don't think there is any
> strategy to derail an Iranian bourse on the "not-worth-the-bullet"
> basis. (or anchor in this case) I recommend coexistence and study as I
> see the primary value, outside of Iran, as limited to a few Economics
> Doctoral candidates.
just read the wikipedia link above...
-jmz
>
> If Iran ever drops off the Internet, I would expect it to be a
> decision made by Iran's leadership. And, I wouldn't expect it to be
> very effective due to the architecture of the Internet.
>
> Ed - OT and yes I am procrastinating....
>
> * This establishes a structure for "cut outs" designed to handle a
> decent volume of transactions over time.
> **The usual level of transparency created by a bourse is welcome in a
> society normally unable to get beyond the private/state deal.
>
> On Feb 7, 2008 2:26 AM, Charles Jones <charles.jones@ciscolearning.org> wrote:
> > Kristian Erik Hermansen wrote:
> > > Good info, but we have to add "OT" to the thread so that people can
> > > filter this convo if they like.
> > You're absolutely right, and I meant to do that, but I totally dropped
> > the ball, thanks for correcting me...sorry folks!
> >
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