Relevant speech was posted couple months ago a congressman speaks out on USD Hegemony-Oil recycling. http://www.house.gov/paul/congrec/congrec2006/cr021506.htm followed by this recently on why Iran the Next Target Congressional Hearings on Iran
...by me. I kind of understand if Uncle Jim from West Virginia doesn't understand the nuances of monetary politics, but a guy with a PhD and internet access should get it...
Pekelo, value of Forex transactions far exceeds the value of actual international trade. Does it ring the bell? If not,please, do not embarass yourself by quoting a political correspondent of NEWSWEEK and do your own thinking. The first sentence explains, in a nutshell, what other guys are trying to tell you. fucking NEWSWEEK??
pekelo's correct though, re. the drivers... the value of forex transactions relative to international trade / commodities is completely irrelevant... at the same time because the euro is no pillar of strength and a v.long way from becoming one, the threat to the $ / $ value is overestimated imo...
My understanding is this. Firstly Iran is siting technical problems as the reason why the bourse has not opened on time. This means to me that that back channels of China & US are working overtime. Secondly, the middle east sells in dollars but their imports are largely in euros. This means to me that as the dollar sinks then the price of oil will continue to rise as the system ( like most tradables ) is self regulating. Thirdly, while oil is priced in dollars, the Fed can continue to print the stuff rather than the US having to earn dollars like the rest of the world is required to do. This means to me that any violent adjustment to this mechanism would bring down the house of cards and the world would not be a pretty sight. The fact that the Fed prints the oil currency is the reason why the US has manged to run large trade and gov deficits and US citizens have been able to live beyond their means for so long. The global money system is quite simple really and most people tend to complicate it when trying to explain it. Even the solutions are relatively straight forward as Argentines will tell you. The complications come out when politicans mask the truth ( tell lies) and try to extend the voters dream world for a little longer or at least until the Politican leaves office and leaves a bigger pile of dodos for the next volunteer.
Hardyards pretty much summarized it. As for Cesko, it doesn't matter who says it, what matters is WHAT was said. And thank you very much, I am able to do my own thinking. But since I haven't got an answer, so I would ask again: If it doesn't matter if oil is sold in dollars or euroes, why the US government is worried shitless about it? After all, you are not arguing against me, you are arguing against the neocons....
Summer paperback reading for the beaches on the topic: http://www.amazon.com/gp/product/08...f=pd_bbs_1/103-1542359-3605452?_encoding=UTF8 Petrodollar Warfare : Oil, Iraq and the Future of the Dollar Book Description The invasion of Iraq may well be remembered as the first oil currency war. Far from being a response to 9/11 terrorism or Iraq's alleged weapons of mass destruction, Petrodollar Warfare argues that the invasion was precipitated by two converging phenomena: the imminent peak in global oil production and the ascendance of the euro currency. Strangely, 9 reviewers gave the max. 5 stars and the 10th still gave 3 stars to this book. Very rare that the consensus on a book is so uniform...
It is simple really. If oil was sold in say euros the the US would need to earn the dollars to buy the euros to pay for the oil, because if the Fed printed them and by doing this, increased the deficits, nobody would accept them at anything other than peso rates, assuming that they would accept them at all. A major major error in thinking was created a few years ago. A bunch of IDIOTS got together and came up with the idea that, by way of globalisation, the US would export intellectual property and import manufactured goods and thus run a trade surplus. This now leaves the US with only one course of action. Raise interest rates to keep the foreign investors amused while at the same time allowing the dollar to slide to more competitive trade levels. This naturally bumps the price of oil which will be paid for at the pumps by way of an ATM called the family home.
If you read the fineprint you will find that after Iran decided to lay low their oil exchange on that Island. Russia announced a BIG new commodity initiative/exchange to run side by side with their vibrant stock exchange. Not much is mentioned about it other than it is happening. There is a large and growing 'trader' class in Russia from their stock market volatility and success. Oil and other commodities would work quite well on the RTS system. You should not believe in accidents. It is no coincident that the "non-dollar" oil exchange will be in Russia. Neocons HATE Putin ---and they cannot Nuke him (at least not without getting us showered with warheads). I personally believe this was THE shrewdest move supported by Iran, China, as well as Venezuela. Russia has TONS of oil and TONS of Nukes. IMO Putin is much shrewder than Bush--who looked lovingly into his eyes. He is every bit as shrewd (and evil) as the most clever Neocon. Just ask the NeoCon lackie Russian Oligarchs. Especially, the Oligarchs who stayed in Russia and thumbed their noses at him. Putin hammered them. Literally. So we have an interesting matchup here kids. We the NeoCons who are Trotskyite (or former Trotskyites.cough.cough). We have Putin and company who's moves are classic Stalin (or a former stalinist ..cough...cough). Yet once again. We have THE GREAT tactical matchup of the last century. Trotsky was more brilliant than Stalin. BUT he could not get as violent as Stalin. Trotsky always had others doing his fighting for him (figuratively speaking). Trotsky lost. All the similarities are present once again. Lets watch this one closely. (I am not saying Trotsky was a big pussy. It was just that Stalin was probably THE most violent and evil thing this planet has ever seen). As traders, we have good fishing in troubled waters. As someone who was 'raised a commie' I find it terribly ironic. A trader like me is watching Capitalist battles by folks who are all Philo Commies (at least in operating tactics)! But the Trotskyite and Stalinists always have the same end game. MIGHT IS RIGHT. It is an effective and brutal philosophy that just plain works.
Excellent Commentary .......................................................................................... Excellent video speech.... ............................................................................................ I think the key here is the idea of being rational... Rational would mean that why would a country move its citizenry downward economically for some period of time when it is their choice .... Iran has a choice....to move economics down....for themselves...for the US....for Europe...by making choices that are economically irrational but for them ....mentally rational..... I must admit that there are times when economics have nothing to do with a decision.... Personally...if I were Iran....I would tell the US to go fuck itself... which is economically irrational... If you were Iran....mentally you would do the same... .................................................................................................. What would you do if your neighbor was knowingly and willfully wanting to take your land that your house was on...and that your children´s house was on ? Yeah it costs you money to fight them...and economically for the short run it costs you....but in the long run...you will either have your land...or you will not... .............................................................................................. Look...oil has gone up 6 fold during the Bush administration...Halliburton has gone up 8 fold...The CEO of Texas based XOM made over $800 million...Bush´s family has their core constituency in oil based Texas...Bush lives in Crawford TX.... The additional oil demand commands a $40 price...not a $70 price... ............................................................................................. The US is currently performing military exercises in the Carribean... The next story time is going to be about Venezuela... Thus Iran and Venezeula will provide plenty of oil price bouyancy during the remainder of the Bush term... ................................................................................................ To me ...the Bush presidency will be known in history as the Oil Company Presidency...... ............................................................................................... Thus if one is rational....One would not bother to set up an oil bourse... because of downward economics by choice.... However...they have reason to act irrationally economically...I would do the same... This is why the US administraion is concerned....however the US administration is the cause of this so called hoax-like problem...which has been imposed by the Oil Company constituency.....