While our Western sabers are rattling about purported Nukes, a BRICk has been hurled through our plate-glass front windows…! The BRIC nations(Brazil, Russia, India, and China), minus Brazil in this particular instance, are on the cusp of replacing the almighty US buck as the base currency for Petrodollars…!

Just to refresh ya’ll, as I’ve noted before…

…Iran is the Organization of Petroleum-Exporting Countries (OPEC)’s second-largest oil producer.

The Iranian oil bourse is intended as an oil exchange for petroleum, petrochemicals and gas in various currencies other than the U.S. dollar, primarily the euro and Iranian rial and a basket of other major (non-U.S.) currencies.

Western analysts said that at a time when the U.S. dollar is as vulnerable as it has ever been, Iran is piling on the pressure with their oil exchange. The thing that will kill the U.S. dollar as the world’s reserve currency faster than the U.S. debt default is if oil producers and consumers trade oil in other currencies…

{snip}

Of course, the effectiveness of the IOB will depend on whether the big international oil trading companies decide to accept deals in euros or not. However, the potential financial impact on the U.S. economy remains more than just idle speculation.

“The weapon of oil in the hands of Iran’s regime is more dangerous than any other weapon,” said a recently published article in Italy’s Panorama newsmagazine. [...]

There is speculation that the IOB represents Iran’s plan to escape any possible future economic sanctions spearheaded by the U.S. However, some postulate that the plan could also endanger the continued existence of Iran’s regime. William Clark, an American security expert, predicted that if Iran threatened the hegemony of the U.S. dollar in the international oil market, the White House would immediately order a military attack against it…

Now, take a gander at this new Asia Times article…

…Chinese Prime Minister Wen Jiabao, who visited Doha last week, disclosed at a press conference on Friday: a) China proposes to invest in the manufacturing of ”downstream oil products, which are most urgently needed by Qatar”; b) China and Qatar signed an agreement to jointly build a refinery in Taizhou, Zheijiang, in China; c) Chinese companies propose to participate in infrastructure projects in Qatar; and d) China and Qatar are discussing a “long-term, stable and comprehensive cooperative partnership” in natural gas.

Then, Wen quietly dropped a bombshell. He revealed “one more important point” as if it were an afterthought. He said:

In order to address investment issues, we [China and Qatar] need financial support. Therefore, we reached another agreement, a cooperation agreement linking finance with investment. Qatar also proposed the use of local currency in trade settlement and even a specific ratio. I think this proposal can be studied.

The short point is, the renminbi, the “people’s currency” also known as the yuan, is appearing in Doha. The China-United Arab Emirates (UAE) currency swap deal which was signed during Wen’s visit to Abu Dhabi last week already brings the yuan to the Emirates. The deal with the UAE is worth US$5.5 billion and the Chinese central bank statement said that it aims at “strengthening bilateral financial cooperation, promoting trade and investments and jointly safeguarding regional financial stability”. {snip}

Iran and Russia have already switched to their national currencies for conducting bilateral trade. Tehran’s ambassador to Moscow Seyed Reza Sajjadi said on Friday, “[Trade] with Russia is based on our national currencies. We started this work long ago. Iranian businessmen are buying products in Russia and are using the rouble as [payment] currency] … The US dollar has no [economic] support base … There is a similar interest on the Russian side.”

Last week, it also came to be known that India proposes to allow Iran’s central bank to open rupee accounts with two Indian banks as a long-term solution to the countries’ payment problems instigated by the US (which pressured New Delhi to terminate the traditional payment mechanism for Iran within the Asian Clearing Union.) An Indian delegation visited Tehran last week to finalize details...

We’re so f*cked…!

*gah*

Update: