Iran, The Euro, And The US Dollar

From Bloomberg News:

Iran Fires Short-Range Missiles in ‘Deterrent’ Tests (Update2)
By Ladane Nasseri
Sept. 27 (Bloomberg) -- Iran fired short-range missiles as part of a military maneuver and said it will give a “crushing” response to any armed aggression.
Iran “successfully tested a multimissile launching system,” state-run Press TV reported. “A number of missiles including the homemade Fateh and Tondar” models were launched both simultaneously and consecutively, the report said.
The exercises may increase tension over the Persian Gulf country’s nuclear program. Iran’s Revolutionary Guards Corps said yesterday it would conduct the war games to maintain the “deterrent capacity” of the armed forces.
The military plans to test medium-range missiles, such as the Shahab 2 missile, later today as well as improved long-range Shahab ones tomorrow, General Hossein Salami, head of the air force, told Press TV.
“The message is that of security,” Salami said. “We will respond to any military action in a crushing manner.”
Today’s exercise, called Prophet IV, will assess “recent technical developments and tactical progress” in surface-to- surface missiles, Salami said, according to a report on the Guards’ official Web site.
The maneuver is also aimed at “practicing management of long-term preventive and defensive operations,” he said.
‘Greedy Nations’
“The range of our missiles is in no way a threat for the neighboring countries,” Salami said. “It is a message for certain greedy nations that seek to create fear, to show that we are able to give a swift and suitable answer to our enemies.”
Iran two days ago confirmed the development of a second uranium enrichment facility in the country, a move condemned by the U.S., U.K. and France.
The enrichment activity is at the center of western concerns about Iran’s nuclear program. The process isolates a uranium isotope needed to generate fuel for a nuclear power reactor, though in higher concentrations it can be used to make a weapon.
Iran will continue to enrich uranium at a low level of 5 percent concentration or less, said Ali Akbar Salehi, the head of the country’s Atomic Energy Organization, according to a report on the Iranian Labour News Agency. Iran also said yesterday that it will allow the United Nations International Atomic Energy Agency to inspect the enrichment facility, located outside Tehran on the road to the holy city of Qom.
Military Option
Iranian officials have rejected criticism for failing to mention the plant’s existence until two days ago, arguing that it’s only required under IAEA regulations to inform the agency 180 days prior to introducing nuclear material in the site. President Mahmoud Ahmadinejad said Sept. 25 the facility is “18 months away from operation.”
At a Sept. 25 news conference concluding the G-20 summit, U.S. President Barack Obama said that diplomacy was his preferred option to halt Iran’s nuclear program, though he didn’t rule out military action. Top Israeli officials also said last week that use of force against Iran remains an option.

From : The Daily Markets

Iran Replaces The US Dollar With The Euro…And So It Begins
By KhronoStock on September 22, 2009
Iran’s President Mahmoud Ahmadinejad has ordered the replacement of the US dollar by the euro in the country’s foreign exchange accounts.
The September 12 edict was issued following a decision by the trustees of the country’s foreign reserves, Mehr News Agency reported.
Earlier, the Islamic Republic of Iran had announced that the euro would replace the greenback in the country’s oil transactions. Iran has called on other OPEC members to ditch the sinking dollar in favor of the more credible euro.
Following the switch, the interest rate for the facilities provided from the Foreign Exchange Reserves will be reduced from 12 to 5 percent.
Since being introduced by the European Union, the euro has gained popularity internationally and there are now more euros in circulation than the dollar.
The move will also help decouple Iran from the US banking system.

On the surface these two articles seem unconnected. Iran has been the "bad boy" nation of the middle east for many years. Rhetoric coming from Tehran toward Israel has been troubling, including denial of the Holocaust. It is the timing of these two articles that seems less than coincidental. The US dollar seems to resumed a long term decline. Although I anticipate a bounce in the near future, quantitative easing and monstrous deficits are close to sealing the dollar's fate in the longer term. Iran's shift to the Euro and encouragement to other OPEC members to do so introduces currency risk to the price of crude oil to the US. Considering the vast amount of oil the US imports, is President Obama's push to condemn Iran more about oil pricing than security?
The type of rhetoric coming from Washington, is starting to sound eerily like the "weapons of mass destruction" speech of George W.