Monday, February 13, 2006

Syria Dumps US Dollar for Euro

From the Reuters' story found Here.

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.

"It looks like a kind of pre-emptive action aimed at making their foreign assets safer, preventing them from getting frozen in case of any conflict," said a Middle East economist who requested anonymity.

The real reason that the US is whipping up a fight with Iran is that the country is opening a bourse (exchange) in March that will sell oil in Euros vs. crappy-ass depreciating US Dollars(USD). For decades the USD has enjoyed a free ride in that all oil transactions have been priced in USD on both the NYMEX and the International Petroleum Exchange in London (now ICE Futures). Since the majority of countries are oil importers they have had to hold billions of dollars in rapidly depreciating USD keeping those USD off the market. In March these countries (many of which don't like the US anymore thanks to the policies of the WORST PRESIDENT EVER) will now be free to dump their USD for Euro. Add the billions of dollars that the Syrians have just dumped and expect a dollar in free-fall and a war with Iran in March. - Etienne