Iranian President Mahmoud Ahmadinejad dropped a bombshell. And while it wasn’t a nuclear one, it might as well have been.

He stated on the record at a rare gathering of the heads of the Organization of Petroleum Exporting Countries [OPEC] member nations have expressed a real interest in converting their cash reserves from the beleaguered U.S. greenback to the European euro. More specifically, Ahmadinejad referred to the U.S. dollar as "a worthless piece of paper."


Not surprisingly, Ahmadinejad ally and fellow anti-U.S. hardliner Hugo Chavez - the president of Venezuela - echoed a similar sentiment.

What makes their posturing so troublesome, however, is that for the first time there was no rebuttal, or reassuring commentary from Saudi Arabia and other key U.S. petrodollar supporters, in response.

In fact, they didn’t even mention concerns about the falling U.S. dollar in the summit’s final declaration.

Instead, OPEC members formed a working group to study the dollar’s effect on oil prices and to "investigate the possibility of a currency basket" as a means of offsetting declining dollar-based reserves. At the same time, Ahmadinejad and Chavez agreed to set up a joint Iranian-Venezuelan bank and concurrently signed deals to boost cooperation in the oil, petrochemical and general industrial sectors, according to Iranian media.

The timetable for recommendations and action, like many things from OPEC, remains unclear. But the mere fact that they’ve gone so far as to set up a working group to study the currency problem, and that at least two major member states are busy establishing bilateral financial institutions, suggests that changes are in the wind and this time those changes are for real.

Let me emphasize this point: This is not good. In fact, under the circumstances, I can’t think of anything else short of a direct terrorist attack that poses as serious a challenge to our economic future and to any of our investments that aren’t positioned for this possibility.