Anyone familiar with Petrol Dollar Recycling? There is a good link here if you would like to read up on the concept.
http://www.trinicenter.com/oops/iraqeuro.html
The basic gist is this: All oil is traded in us dollars. The OPEC members who sell the oil have no use for the billions generated, so they put it in US banks. Why? Because to convert it to other currency costs them money. Like changing cash at the airport after you visit another country, you have to buy money from another currency.
So, billions a year get pumped into the US economy investments and banks, all because oil is traded in dollars. Also, all countries in the world that want to buy oil, and thats EVERY country, has to buy US dollars to purchase oil.
This keeps the demand for the US dollar high and allows the US to borrow against future monies. This is why the US is the only country that can run such a high deficit.
However, Sadaam days before the current war switched all Iraq's currencies to Euros. This effectively would mean billions a year would be lost in the states. There are some that say this is why the US invaded so quickly withuot proper planning, because the first thing the US did after taking over was switch the Iraq currency back to a system based on the US dollar.
http://en.wikipedia.org/wiki/Petrodollar_warfare
Well folks, today, Syria announced it is now switching to the Euro, and Iran has threatened if brought before the security council it will do the same.
http://www.worthynews.com/news/upi-c...-013206-2660r/
Sound like a pointless threat? Well, it effectively would mean the US economy would literally take one hell of a beating in a matter of hours. If the US could no longer grow the deficit, and the rest of the world thought that the US couldn't pay back the debt already incured, well lets just say the US would be in for one hell of a wake up call.
It would effectively mean the literal bankrupting of the US government, and that the US dollar would drop down to lower than the peso, all in a very short period of time.
Curious to see how this pans out...