I haven't done much research in this department, economics gives my liberal head a headache. I've heard that Ahmadinejad is considering selling oil in Euros instead of dollars and this will totally mess up the US economy. If he gets his friend Maliki to do the same are we in big trouble?
2007-01-02 23:23:27 · 4 answers · asked by brickity hussein brack 5 in Social Science ➔ Economics
No trouble at all. Iran could decide to trade oil in seashells and it wouldn't matter.
Foreign currency markets exist for this very reason, if we need Euros for something, people can go out and exchange for Euros.
The banks/companies that now have these dollars tend to re-invest back in the US due to the combination of ROI and safety US assets offer.
At worst, our designation as a reserve currency has been calculated by economists to give us a boost of about 0.1% of GDP, due to the nature of it, it is essentially a small, interest free loan.
So the end result would likely be a small decrease in the real exchange rate of the dollar, and a small increase in investment in the US.
2007-01-03 02:45:31 · answer #1 · answered by Anonymous · 0⤊ 0⤋
If it was just Iran and Iraq then there would still be plenty of barrels of oil being exchanged for $s around the world.
If OPEC decided to switch to Euros as the hard currency of choice then that would have a detrimental effect to America's cash flow.
2007-01-03 07:28:31 · answer #2 · answered by Thomas V 4 · 0⤊ 0⤋
None whatsoever. Do you have any idea how much it costs to convert a dollar into a euro? If you do it in bulk ($1 million or more), the cost is about 0.02 cents per dollar. So even if it is true (which I honestly doubt), the impact of this decision on the U.S. (or any other) economy is negligible...
2007-01-03 11:52:06 · answer #3 · answered by NC 7 · 0⤊ 0⤋
Why do people keep asking this question???
2007-01-03 09:19:55 · answer #4 · answered by KevinStud99 6 · 0⤊ 0⤋