I heared/read already a couple of times, that the US very largely benefits from (means it only survives because of) the privileged status of the US , which basically means that the US can print money without creating inflation because the US is needed by the other nations to buy oil and other products.
Now, with the rise of the european Euro and its growing stability, many countries consider changing their pricing policy to the Euro, e.g. the OPEC.
Iraq changed its oil pricing scheme from the $ to the Euro in 2000, thus provoking the war. That’s what I heard.
we discussed it, yes, and you stated your opinion that it was a stupid concept, but seeing Bush change over Iraqi’s oil currency back to $US, hearing himn threaten Iran, an other country that was thinking of changing their oil currency to €, and reading reports in the news how Bush’s administration helped to prepare the coup aginst Venezuelan president Chavez, who was also thinking about starting to seel his oil for € instead of $US…
in shorT: you haven’t convinced me it was a stupid concept.
Methinks there’s more thruth in it than you guys want to admit.
If not, hey, let’s give it a try, shall we? Let’s change over the oil currency to €, see how the US economy fares, then.
I just realized that I relaunched an already finished discussion, I am sorry for that. I had again a look at the other threads but couldn’t find your pevious discussion. Can somebody give me a link?
Um, sorry, I think you must be mistaking me for someone else. There was a thread discussing this recently and i do not remember posting I had any opinion on the matter one way or another because IIRC the idea had already been debunked by others in the thread. Maybe I am mistaken as I did not really participate in that thread except for a tangential comment. I just got the impression the idea was pretty debunked. Maybe I am mistaken.
We’ve already heard this identical idea presented twice before, and neither time were there any logical arguments about why it was actually a horrifically bad thing for the US< and even those rantionales given completely missed all other evidence about the actual point of the war.
Could you please point me to the previous discussions.
The arguments in the linked article sound quite logical. If you do not think so please give me some more details on what exactly is not founded.
The actual point of the war is not always the one which we are made to believe by the politicians. That’s the point. The subject of this thread is to discuss whether “the actual point of the war” could be something else than WOMD, liberty for Irak etc.
I think that OP’s generate a lot of their own good or bad will by the way they word their issue or point of the day. And reading that Bush is “attack(ing) the world”, that the US “only survives” because of the status of the US$, and that the OP is based on “That’s what I heard”, really sets a poor foundation for a thread. There is small chance of any reasonable or impartial analysis here.
I admit that I am biased, since I read/watch non american media. But so are you (I suppose you are from the US since your Location is empty).
Americans are made to believe that the Iraq war was necessary for world-peace (or US security). Non-british Europeans are made to believe that the Iraq war was necessary for US interests only, which are completely unrelated to security or peace.
That’s the standpoints and that is the reason for the transatlantic rift.
Yes, I think that “Bush” (!) attacks the world, since in my opinion the iraq war was totally unjustified and I fear that the US administration will continue to strike other countries.
The question is why? The Dollar story sounds very convincing to me. That is the reason why I wanted to discuss it here with people from the US. But that doesn’t change my opinion.
If my introduction statements are to threathening or shocking to you, take the link to the as foundation of the thread: “What is the basis and security of the United States position and power in the world? The answer is the twin pillars of the Dollar and the Pentagon.”
all other evidence about the actual point for war: seems like even the US hasn’t found any “actual evidence”. We’re all still waiting on evidence of WoMD.
Logical arguments: when analysed from a completely economic point of view, this theory DOES have merit.
"Otherwise, the effect of an OPEC switch to the euro would be that oil-consuming nations would have to flush dollars out of their (central bank) reserve funds and replace these with euros. The dollar would crash anywhere from 20-40% in value and the consequences would be those one could expect from any currency collapse and massive inflation (think Argentina currency crisis, for example). You’d have foreign funds stream out of the U.S. stock markets and dollar denominated assets, there’d surely be a run on the banks much like the 1930s, the current account deficit would become unserviceable, the budget deficit would go into default, and so on. Your basic 3rd world economic crisis scenario.
“The United States economy is intimately tied to the dollar’s role as reserve currency. This doesn’t mean that the U.S. couldn’t function otherwise, but that the transition would have to be gradual to avoid such dislocations (and the ultimate result of this would probably be the U.S. and the E.U. switching roles in the global economy).” In the aftermath of toppling Saddam it is clear the U.S. will keep a large and permanent military force in the Persian Gulf. Indeed, there is no ‘exit strategy’ in Iraq, as the military will be needed to protect the newly installed Iraqi regime, and perhaps send a message to other OPEC producers that they might receive ‘regime change’ if they convert their oil exports to the euro. "
“They are several means of contesting the unilateral power of the United States, but perhaps the most immediate and effective one is to accelerate its economic crisis. Already, strategists in China are suggesting that the yuan should replace the dollar as East Asia’s reserve currency. Over the past year, as the Observer revealed on Sunday, the euro has started to challenge the dollar’s position as the international means of payment for oil. **The dollar’s dominance of world trade, particularly the oil market, is all that permits the US Treasury to sustain the nation’s massive deficit, as it can print inflation-free money for global circulation. If the global demand for dollars falls, the value of the currency will fall with it, and speculators will shift their assets into euros or yen or even yuan, with the result that the US economy will begin to totter. **
Of course an economically weakened nation in possession of overwhelming military force remains a very dangerous one. Already, as this column suggested last week, the US appears to be using its military machine to extend its economic life. But it is not clear that the American people would permit their government to threaten or attack other nations without even a semblance of an international political process, which is, of course, what the Bush administration is currently destroying.”
[QUOTE]
*Originally posted by flonks *
heared/read already a couple of times, that the US very largely benefits from (means it only survives because of) the privileged status of the US , which basically means that the US can print money without creating inflation because the US is needed by the other nations to buy oil and other products.
Now, with the rise of the european Euro and its growing stability, many countries consider changing their pricing policy to the Euro, e.g. the OPEC.
Iraq changed its oil pricing scheme from the $ to the Euro in 2000, thus provoking the war. That’s what I heard.
What do you think about that?
[QUOTE]
The argument makes no sense to me. And, whenever I read the government “prints” money it raises a red flag. International transactions are often denominated in a stable currency because the parties wnat to protect themselves against currency fluctuations but I cannot see how this in any way would benefit the country of the currency being used to denominate the transaction which is just a unit of count and nothing more. You and I can denominate a transaction in dollars and the rest of the world not know it, mush less the government of the USA. Example:
I am the Chief Honcho of the National Petroleum Company of Salvaguay and I am buying 45 muchillions of crude from the National Oil Company of Petruchistan to be delivered six months from today and payable on delivery. We now need to set the price. For me the most convenient thing is to set it in Salvaguayan Pesos but the seller is not sure the Peso may not lose value in the next six months so he does not like the idea. For the seller it makes most sense to denominate the contract in Petruchi Flinglings but I might be screwed if its value increases in the next six months. So we agree to denominate the price in a stable and widely represenative currency and we choose the dollar.
For the next six months no currency changes hands and nothing happens. Then, I take delivery and have to pay an amount denominated in dollars. But this means nothing. It is just a counting unit. I can go out and buy dollars at that day’s rate and pay for the dollars with Salvaguayan Pesos. I then pay the seller in dollars and he instantly converts the dollars to Petruchi Flinglings at the day’s rate. The money was converted to dollars for a fraction of a second. So what? Most probably it will not even happen. On payment the Salvaguayan Pesos will be converted directly to Petruchi Flinglings without being converted to dollars. The dollar was just a counting unit. I cannot see how the US government can benefit from this. The US benefits if foreign people buy dollars and hold on to them but this is not the case at all. If countries and individuals are hanging on to dollars then yes, but this has nothing to do with what oil contracts are denominated in. If the contract is denominated in dollars and then the seller saves the money in Euros, then the Euro benefits.
This is apparently what happens. Countries have to hold dollars to buy crude, because dollars are transferred, not pesos with an amount calculated from a dollar price.
