The Guardian 28 November, 2007

The dollar empire continues to slide

The latest currency exchange reports show that the steady decline in the value of the US dollar relative to other world currencies is continuing. More countries are considering their options and ways by which they can off-load the US bonds or other forms of dollar currency they hold. More are considering how oil can be denominated in currencies other than the US dollar. In the past all oil contracts were written in US dollars.

Venezuelan President Hugo Chávez declared recently that "Soon they won’t be talking any more about dollars because the dollar is on a free fall and the empire of the dollar is coming down."

Chávez was in Tehran, the capital of Iran. He travelled there following a meeting of OPEC (Organisation of Petroleum Exporting Countries) at which Iran’s president proposed to forego the US dollar for crude oil operations.

In the Iranian capital, Chávez said, "Here are two fraternal countries, united like a single fist", while the Iranian President Ahmadinejad said, "Fortunately, we are now witnessing the decline of the empire of arrogance (US) and victories of the people."

Economic relations between the two countries, both large oil exporters, have been steadily increasing. Joint investment of the two countries has now reached $US4.6 billion (AU$5.2 billion).

Reuters quoted an Iranian official last Monday as saying that Iran has successfully cut its ties with the US dollar in regards to oil revenues.

The director of international affairs of the Iranian National Oil Company said, "This is an economic decision and we’ve been proven right. Over time, the dollar has become weaker and weaker."

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