Iran Press: National Economy Must Be Kept "Immune From Foreign Tremors"
Iran Press: National Economy Must Be Kept "Immune From Foreign Tremors" 2006-04-23 BBC Monitoring Middle East
Text of editorial by Mohsen Mehdian: "Ailing papers", published by the Iranian newspaper E'temad website on 20 April
Mr Powell's guess turned out right, American paper money is becoming isolated. In a speech entitled, "The end of the dollar's hegemony", the influential Republican representative in the American Congress pointed to a bleak future for the American economy. This representative who is committed to the Austrian free market openly stated that America's hostility towards Iran is due only to one thing, and that is the dollar.
Prior to the Iranian oil stock exchange interpreting America's dream as a nightmare, several days ago a report indicated that some Persian Gulf states had changed some of their foreign currency reserves from dollars to Euros. Although this report stated that this decision is only limited to a decision taken by the central banks of the [United Arab] Emirates, Qatar and Kuwait, nevertheless, it seriously threatens the American currency.
Over the past couple of years, the dollar, which was backed up by 130 American military bases throughout the world, has declined. Following America's wars against terrorism, the incentive to maintain financial assets has declined in the world and most countries and large investors have decided to maintain real assets. The growth of the housing sector in certain industrial countries along with the rise in the price of steel in major world stock markets are all an indication of this, until tensions over the Iranian nuclear issue provided the latest shock to world economic markets.
The increasing rate of risk and insecurity in the world has drained the world economy. The decline in the value of the dollar only adds to this. The increase in the price of oil has shaken major world stock markets. Large world stock markets have seen their share values drop on a daily basis. More than anywhere else, the greater rate of risk in the region has harmed stock markets in the Persian Gulf countries. The Dubai Stock Market was shut for some time. The Kuwaiti Stock Market alienated many assets, and the [Saudi] Arabian Stock Market sent some investors to the hospital. Even vigorous world stock markets were not immune. Based on reports published by foreign news agencies, the managers of the Tokyo Stock Market are scared of the rising price of oil and the rise in global risk, and this stock market has witnessed a drop in shares. Likewise, several days ago, a German newspaper reported of the impact Iran's nuclear achievement has had on increasing stagnation in the German investment market.
Another event alongside this fact is the rise in the price of gold. Gold surpassed 625 dollars per ounce. Many countries have exchanged their dollar reserves to gold. World demand for gold as a real asset ahs increased more than expected.
Referring to Iran's resolute decision to maintain its nuclear programme, Stephen Landman, a senior international economic expert, said that the gold market will experience fluctuation in the future. In an article, he wrote: "if you have gold bullion, hold on to them fast. The issues are much more difficult than you think".
The rise in the price of oil, stagnation in world stock markets, demand for gold as a real reserve, the switch in foreign currency reserves to the Euro, alongside threats such as, the creation of the Iranian oil stock market, makes the crash of the petrodollar inevitable. Fluctuations in international trade will no longer be settled with F-16 fighters, armaments and Apache [helicopters]. Militarist support for the dollar has become completely ineffectual, and this can be seen in the new discourse being applied by American generals calling for a diplomatic approach to the world of Islam. Iran's insistence on maintaining nuclear technology and the launching of an oil counterattack in the Iranian oil stock market adds daily value to real assets, such as gold and silver.
On the other hand, although changes in polar economic transactions lead to the realignment of power, on the other hand they can overshadow the national economy. Undoubtedly, the Iranian economy will not remain impartial towards international tensions, therefore, a priority in Iranian economic planning is to structural economic reform. The covert and overt borders of an economy can become a complication with any shock and tremor. To cite an example, the presence of floating monies in the national economy, which has always been a source of concern for many experts, have, within a short while, been able to emerge with the rise in the price for gold in world markets and develop into a crisis.
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