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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (66675)	7/16/2007 3:02:27 AM
From: John Metcalf	Read Replies (2) \| Respond to of 116555

Mish, look for a comment on Monday from Chuck Butler or Chris Gaffney of Everbank in regard to pricing oil in yen. The meaning of the change has to do with the buying and selling of currencies, as they are used in commerce. The argument others have presented, that currencies are instantly translated, and therefore inconsequential, totally disregards the fact that currencies move versus each other. Iran's move will mean Japanese buyers of oil from Iran will sell less yen and buy fewer dollars, as opposed to the yen-supressive move that has happened for years. This change will drive yen up vs. USD. About time !

To: mishedlo who wrote (66675)	7/16/2007 8:23:18 AM
From: Webster Groves	Read Replies (1) \| Respond to of 116555

Europe may not take dollars from Iran, at least the banks under US "control", but Japan will certainly take yen. Under normal international trade and banking arrangements. I agree that the currency of trade is not important under trade balanced situations, but under embargo and banking restrictions, it is very important. The point is to put the economic squeeze on Iran. If banking restrictions were irrelevant, then the US would not insist on their use, but they do. Nations with major trade with Iran are less influenced because they need the product. What choice does Japan have, for example ? wg PS - I find your claim of "meaningless" in Iran's case because they already had diversified out of dollars not altogether true. Iran continues to avoid dollars, and maintains a trend finding more adherents every day, including our "great friends" in the Gulf states.