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« Japanese Prime Minister Shinzo Abe’s nation will comply with Iran’s request to buy Iranian oil with yen rather than dollars. (Reuters)

Japan Drops Dollar to Buy Iran’s Oil

Tuesday, July 17, 2007

Iran has asked Japanese oil refiners to pay for all future deliveries in yen, as opposed to dollars, according to a letter obtained by Bloomberg News. The request is “effective immediately” for all “forthcoming Iranian crude oil liftings” according to the July 10 letter signed by the National Iranian Oil Company’s general manager of crude oil marketing and exports. Until now, most Japanese oil importers have used U.S. dollars to purchase Iranian oil. Although confirmation of Japanese oil payments in yen is still forthcoming, as one investment securities analyst in Tokyo said, “What else can Japan do but to accept the request, once the oil producer sent its wish?” Japan needs the oil, and with energy markets as tight as they are, alternative supplies will be very difficult to come by. Iran is Japan’s third-largest supplier of crude, exceeded only by Saudi Arabia and the United Arab Emirates. Since 1944, with the signing of the Bretton Woods agreement, the U.S. dollar has been the world’s reserve currency, meaning it is the currency used by governments and institutions to settle their debts and to transact trade in vital commodities such as gold and oil. To conduct international trade, countries were compelled to accumulate dollars and build reserves. Consequently, the increased demand for the dollar gave the U.S. economic benefits not available to other countries and permitted the U.S. to run large trade deficits and fiscal debts without experiencing most of the negative economic impacts normally associated with such large imbalances. That is beginning to change. Iran requiring Japan to pay for oil in yen is just the latest move by a nation seeking to reduce its dependence on the dollar. Earlier this year, officials from Chinese-owned Zhuhai Zhenrong Trading, Iran’s biggest crude oil customer, confirmed that they now pay for Iranian crude in euros. Russia is preparing to sell oil priced in rubles and plans to open the Energy Stock Exchange in St. Petersburg in the first half of 2008, according to a ubs AG report dated June 14. In 2005, Norway’s Bourse Director Sven Arild Andersen said that a Scandinavian oil bourse conducting transactions primarily in euros should be set up. Many nations are also beginning to diversify their foreign currency reserves away from the dollar, often to the euro. Central banks in South Korea, China and Taiwan have all announced plans to diversify away from the dollar. Last year Russia, Syria and Italy also said they intended to reduce their dollar holdings. Last Wednesday, Japan’s adviser to the prime minister said Tokyo should diversify its reserves away from dollars, and spend its greenbacks on higher-yielding assets. Bloomberg notes that Japan is the largest overseas holder of U.S. treasuries; as such, it has historically been one of the strongest supporters of the dollar. Announcements like these have caused the dollar to fall like a rock recently, hitting record lows against the euro, pound and other currencies. Demand for the dollar is eroding—and trade for oil in other currencies is accelerating this trend. Time will tell how quickly other nations will break away from the dollar as the global currency of commerce. The result could be disastrous for Americans. “Once the dollar loses its reserve currency status and the collapse ensues, the process of returning to economic viability will be a painful one,” says Peter Schiff, president of EuroPacific Capital, in his book Crash Proof. “Whether the United States is up to the task remains to be seen. Although I am skeptical, I nonetheless remain hopeful.” For the best strategy for protecting your family from future financial troubles, read “Storm-Proof Your Financial House.” Also on theTrumpet.com: • Why the U.S. Dollar Constantly Loses Value ************************************************************************************ Headline News Tuesday, July 17, 2007 by Staff Writer Israel preparing for war with Syria, confirms general A senior Israeli general on Monday confirmed that the army is preparing for a full-scale war with Syria in the very near future. Speaking at Israel's Institute for National Security Studies, Maj.-Gen. Eyal Ben-Reuven, who served as deputy commander of Israel's northern forces during last summer's war in Lebanon, said that the army is “preparing itself for an all-out war, and this is a major change in the military's working premise” following the 34-day conflict with Hizballah that many Israelis feel their nation failed to win. The general said that when war breaks out, Syria will be prepared to suffer mass military and civilian casualties, while at the same time playing on Israel's sensitivity to civilian losses by striking Israel's home front with as many missiles as possible. Syria “will try to hit Israel's home front in order to win diplomatic gains in peace talks that will follow, and also cause another split in Israeli society,” Israel National News quoted Ben-Reuven as saying. In order to deny Syria this victory, Ben-Reuven said the Israeli army is training for a swift and overwhelming invasion of Syria “to knock out the areas from where missiles are launched against Israel as quickly as possible.” He lamented that if Israel had responded to Hizballah's rocket attacks in such a manner, the Second Lebanon War would have ended much differently. ************************************************************************************ Reining In an Out-of-Control Executive by Prof. Marjorie Cohn Global Research, July 16, 2007 Email this article to a friend Print this article Our Founding Fathers created three separate but co-equal branches of government to check and balance each other so no one branch would become all powerful. Indeed, James Madison wrote in the Federalist Papers, "The preservation of liberty requires that the three great departments of power should be separate and distinct." Madison warned, "The accumulation of all powers, legislative, executive, and judiciary in the same hands ... may justly be pronounced the very definition of tyranny." The American colonists were reacting against a police state. More than 200 years later, we have another King George. In the last six years, George W. Bush has sought to accumulate all governing powers in the same hands - his. In the Declaration of Independence, the framers charged that the King "refused his Assent to Laws, the most wholesome and necessary for the public good." Bush has repeatedly violated the Constitution's command that the President "shall take Care that the Laws be faithfully executed," by breaking some and refusing to enforce others. The Constitution grants Congress the power to make laws; after both houses pass a bill, the President can only sign it or veto it. Bush, however, takes a different tack. He has vetoed just three bills, then quietly attached "signing statements" to more than 1,000 congressional laws, indicating his intent to follow only those parts with which he agrees. In an end run around Congress and the courts, Bush secretly authorized the Terrorist Surveillance Program to conduct electronic surveillance without a judicial warrant, in violation of the Foreign Intelligence Surveillance Act (FISA) and the Fourth Amendment. Although two judges on a three-judge panel of the Sixth Circuit Court of Appeals ordered the dismissal of a lawsuit challenging the legality of Bush's spying program for lack of standing, the only two judges ever to rule on the merits declared the program illegal. The Bush administration lied to Congress to get authority to invade Iraq . Long before the 9/11 terrorist attacks, Bush and his officials were planning to attack Iraq and change its regime. Dick Cheney's secret energy task force drew up maps of Iraq 's oil fields to divvy up the black gold once we occupied that country. They then devised an elaborate scheme to convince the American people that Saddam Hussein posed a threat to the United States , notwithstanding overwhelming intelligence to the contrary. Since Bush launched "Operation Iraq Freedom," more than 3,600 American soldiers and tens of thousands of innocent Iraqis have died; many thousands more have been wounded. This invasion is a war of aggression, which violates the UN Charter, because it was neither executed in self-defense nor approved by the Security Council. During the war, U.S. troops have been acting under rules of engagement - free-fire zones - that have led some to commit war crimes. For instance, the killing, execution-style, of 24 civilians in the Haditha Massacre, the execution of a disabled man, and the shooting of a wounded unarmed Iraqi in a mosque violate the Geneva Conventions which prohibit willful killing of civilians. Commanders, all the way up the chain to the commander-in-chief, could be convicted of war crimes if they should've known their subordinates would commit them and the commanders didn't stop or prevent it. Bush's legal eagles, particularly David Addington and John Yoo, concocted elaborate "legal" arguments to justify the torture of prisoners. Never mind that international and American law forbid torture under all circumstances. Pursuant to a common plan to violate the Geneva Conventions and the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, prisoners in U.S. custody are being tortured and abused. Prisoners have been subjected to water-boarding, attacks by dogs, sexual humiliation, and excruciatingly painful force-feeding. The Bush administration has secretly rendered prisoners to other countries to be tortured. One former CIA agent observed, "If you want a serious interrogation, you send a prisoner to Jordan . If you want them to be tortured, you send them to Syria . If you want someone to disappear - never to see them again - you send them to Egypt ." Shortly after 9/11, the Bush gang set up a prison camp in Guantánamo, intending to create a legal black hole where they could hold prisoners for the rest of their lives without any judicial oversight. But the Supreme Court didn't buy the administration's argument that U.S. courts have no jurisdiction over Guantánamo because it's in Cuba . And the Court struck down Bush's original military commissions since they violated the Uniform Code of Military Justice and the Geneva Conventions. The Supreme Court said in Berger v. United States that a prosecutor's job is to see that justice is done, not to politicize justice. But Bush's Department of Justice, the chief law enforcement agency in the government, has been seriously compromised. Several U.S. attorneys who refused to bring frivolous charges that would further Bush's political agenda, or who brought charges that didn't, were purged. The White House is resisting congressional subpoenas that call for testimonial and documentary evidence about the U.S. attorney firing scandal. The deadline for Bush, Cheney and the Justice Department to produce documents in response to Senate Judiciary Committee subpoenas about the warrantless surveillance is July 18. In 1974, when the House Judiciary Committee passed three articles of impeachment against Richard Nixon, Article III charged refusal to comply with subpoenas during the Watergate hearings. Marjorie Cohn is a professor at Thomas Jefferson School of Law and President of the National Lawyers Guild. Her new book, Cowboy Republic: Six Ways the Bush Gang Has Defied the Law, was just published. Her articles are archived at http://www.marjoriecohn.com. Marjorie Cohn is a frequent contributor to Global Research. Global Research Articles by Marjorie Cohn