Please explain this. I have seen people write about this but I have never gotten a straight answer to my question. What demand for repayment is that? We print a bunch of dollars and so do the North Koreans. presumably there are a lot of 20 dollars bills in vaults. What can they do with them. It just paper. They can trade them in for some other currency or oil or gold. Presumably the dollar would go down some more. Then the people who have our bonds will get paid back with less valuable dollars. Doesn't that mean the we got to consume like crazy on their dime and their labor? If the dollar goes down too far the horrible result could be that we bring back jobs to our country.
If oil is priced in USA dollars then if USA citizens are cold they can print dollars and trade them for fuel oil. If oil is priced in euro then to buy oil we need euro. The USA does not create euro. To obtain euro we must sell something probably to Europeans in exchange for euro. The USA shows a trade imbalance. The USA does not sell as much to the world as it imports. If the USA does not have euros and it gets cold, some people in the USA might freeze. Freezing people can become angry, restless and desperate for any change. Cold people may riot, become interested in communism, fascism, KKK, Nazi, or some extreme guy such as Hitler may appear and people actually listen to him. History books are full of precedents. Quality of our life is likely better if we have abundant food, clothing, shelter and heat. Lack of basic necessities can lead to revolution, riots, wars, and oh yes sometimes the political leadership gets guillotined.
http://www.euro-area.org/blog/?p=102 A good read, even if it is still in the realm of fantasy land at the moment.
LOL..you beat me to it. How can you have a "discussion" with someone when they dont even know what product they are discussing...LOL..this place is laugh a minute.
It always seemed to me this was probably a much bigger influence on the decision to go to war than many credited it for. http://www.feasta.org/documents/papers/oil1.htm Says it quite well. It certainly seems like the beginning of the end of an empire. Oil is the only thread holding it together imho.
I'll say it again: the petrodollar market is a drop in the bucket out of the dollar currency market. It does not matter if some petrodollars go to eurodollars in terms of significantly effecting the dollar. Some of this article is right, but here's where it starts falling apart: "There is though one major obstacle to this happening: oil. Oil is not just by far the most important commodity traded internationally, it is the lifeblood of all modern industrialised economies. If you don't have oil, you have to buy it. And if you want to buy oil on the international markets, you usually have to have dollars. " Again, the dollar is not going to fall just because of petrodollars. There are much, much larger forces pushing down the dollar...