In what is guaranteed to be a moment of concern for investors and US currency watchers, according to PressTV, Iran and Russia have ceased using the US dollar for between trade the two nations. Iranian Ambassador to Moscow Seyyed Reza Sajjadi says the countries will instead be using their own currencies, the ruble and the rial to conduct their trade with each other. This move was decided upon by Russia’s President Dmitry Medvedev and Iran’s President Mahmoud Ahmadinejad in a closed discussion at the 11th meeting of the Shanghai Cooperation Organization (SCO) last June.
Iran says it will no longer accept the U.S. dollar as payment for its oil shipments to India, Japan and China.
As you will recall in November 2010 both Russia and China stopped using the US dollar for trade with each other. On the part of China it was retaliation for the recent round of “quantitative easing” that was directed towards weakening their currency. This occurred when the US was falsely claiming China was engaged in “currency manipulation” because they refused to devalue their currency for US benefit.
As Iran is currently being threatened with war because they won’t give up a nuclear weapons program they don’t have, it would seem like a wise move on their part. Since they lack the firepower to actually harm the US for its unjust sanctions, an economic style slight would seem in order. The US dollar is the world’s trading and reserve currency. And like all forms of currency, including gold, the less people use it, the less value it has. Its a completely artificial construct, it only has power so long as people believe in it… like a religion.
In the ongoing situation between the US and Iran, Russia has come out firmly against the sanctions that have been placed on their important trading partner. They are particularly opposed to measures that “target the country’s Central Bank and financial institutions.” Russia has also repeatedly called for peaceful solutions to the nuclear situation.
This move is expected to weaken the US dollar further. Other countries now either have or are considering dumping the US dollar as its currency of trade. The writing on the wall is becoming more legible with each passing day. The world has grown weary of US military tactics to prop up its dying financial system, and the world capitalist system in general. More and more countries are joining the push to remove US interests out of their countries. This situation is almost guaranteed to come to violence as the American empire becomes weaker and weaker in an attempt to save itself.