On May 10, Russian President Vladimir Putin ignited a firestorm that is bound to sweep across the global economy. In his State of the Nation speech to parliament,, he announced that Russia was planning to make the ruble Ã¢â‚¬Å“internationally convertibleÃ¢â‚¬Â so that it could be used in oil and natural gas transactions. Presently, oil is denominated exclusively in dollars and sold through the New York Mercantile Exchange (NYMX) or the London Petroleum Exchange (LPE) both owned by American investors. If Russia proceeds with its plan, the ruble will go nose to nose with the dollar on the open market sending several billions of surplus greenbacks back to the United States. This could potentially send the American economy into freefall; triggering a deep recession and an extended period of hyper-inflation.
Iran is planning the same type of thing, to sell oil denominated in euros. If oil stops being traded in the dollar, then the dollar itself will become much weaker.
AmericaÃ¢â‚¬â„¢s economic supremacy depends entirely on its ability to compel nations to make their energy acquisitions in greenbacks. If the flaccid dollar is not linked to the worldÃ¢â‚¬â„¢s most vital resource, then banks will dump it overnight.
This of course has not been reported anywhere in mainstream US media. Is the scenario plausible? Yes, denominating oil sales in euros or rubles would most certainly be bad news for the dollar.