Threatening Petroeuro?

[Oliver]

So have many countries ...

What other factors in your opinion ?

How are those questions related to the end of the gold standard, the depreciation of the $ since the '60s, and the other factors that you will without a doubt explain to all of us ?

As I said. I'm far away of being an expert on these issues. That's why I started this thread. Of course, it would be helpful to get opinions or facts from people who know more about it. So far, this didn't happened.

 

[rockoon]

Wasn't Iraq trading oil for "food?"

..and wasn't this "food" really the euro?

yawn

 

[Oliver]

Wasn't Iraq trading oil for "food?"

..and wasn't this "food" really the euro?

yawn

What are you talking about? And by the way: You showed that you don't know anything about the OP, thanks for providing this obvious fact.

 

[Flo]

As I said. I'm far away of being an expert on these issues. That's why I started this thread. Of course, it would be helpful to get opinions or facts from people who know more about it. So far, this didn't happened.

So far, you didn't do your homework of informing yourself on the issues before asking questions, but you keep complaining about the answers you nevertheless got. As usual.

 

[Oliver]

So far, you didn't do your homework of informing yourself on the issues before asking questions, but you keep complaining about the answers you nevertheless got. As usual.

Nonsense. So far I got no answer to my questions at all.
Any yes - I did do the Homework but I found no information about:
"This happens if Oil-Exporter X switches to Petro-X".

Does that even make sense to you to start a thread and ask:
"What happens if Oil-Exporter X switches to Petro-X?".

 

[Flo]

Nonsense. So far I got no answer to my questions at all.

You did. Reread page 1 of this thread. Stop whining and think about those answers, preferably after you've educated yourself about the markets you admit not knowing much about.

Does that even make sense to you to start a thread and ask:
"What happens if Oil-Exporter X switches to Petro-X?".

The question you ask in the OP is actually "Has the US invaded Iraq for fear of a switchover to Euros". When discovered, you slightly modify your question and pretend you want to gather informations on a larger economic question. It's not the first time you play that game.

 

[Beerina]

Maybe Dorothy didn't go to Oz because a tornado dragged her and Toto there. Maybe she went there to abscond a class-A magical artifact, as planted in her subconscious brain by herself in a previous life.

I'm not familiar with class-A magical artifacts, or what effect they would have on the mundane Kansasian world. Does anybody know anything about this?

 

[Oliver]

Maybe Dorothy didn't go to Oz because a tornado dragged her and Toto there. Maybe she went there to abscond a class-A magical artifact, as planted in her subconscious brain by herself in a previous life.

I'm not familiar with class-A magical artifacts, or what effect they would have on the mundane Kansasian world. Does anybody know anything about this?

Class-A magical Artifacts belong to the Nut-Job-Subforum, maybe you, too? Thank you.

 

[Tailgater]

Nonsense. So far I got no answer to my questions at all.
Any yes - I did do the Homework but I found no information about:
"This happens if Oil-Exporter X switches to Petro-X".

Does that even make sense to you to start a thread and ask:
"What happens if Oil-Exporter X switches to Petro-X?".

http://en.wikipedia.org/wiki/Petrodollar_warfare

Supporters of this hypothesis believe that the value of the U.S. dollar is determined by the fact that many key commodities (particularly oil and natural gas) are denominated in dollars. They believe that if the denomination changes to another currency, such as the euro, many countries would sell dollars and cause the banks to shift their reserves because they would no longer need dollars to buy oil and gas. This would weaken the dollar relative to the euro (see supply and demand). The core of the hypothesis is that U.S. administrations are greatly motivated by fear of the consequences of a weaker dollar, particularly higher oil prices. This motivation is seen as underlying and explaining many aspects of U.S. foreign policy, including the ongoing Iraq War.

This view is controversial. The petrodollar warfare hypothesis has been described as a conspiracy theory. Opponents dispute virtually every economic claim underpinning the hypothesis, including the theory's emphasis on the dollar denomination of commodities and the physical location of the major oil exchanges, the claim that the U.S. finances its current-account deficit by printing dollars, and so on. Opponents also sometimes point out that the Bush administration has repeatedly called for China to stop propping up the dollar by holding very large dollar reserves, a stance seemingly at odds with the administration's supposed overriding interest in maintaining a strong dollar.

Oil sales throughout the world are denominated in United States dollars (USD). Because most countries rely on oil imports, they are forced to maintain large stockpiles of dollars in order to continue imports. This causes demand for USDs to remain high, regardless of economic conditions in the United States. This allows the US government to gain revenues through seignorage and by issuing bonds at lower interest rates than they otherwise would be able to. As a result the U.S. government can run higher budget deficits at a more sustainable level than can most other countries.

It also means that the price of oil is more stable in the U.S. than anywhere else, since importers do not need to worry about exchange rate fluctuations. Since the U.S. imports a great deal of oil, its markets are heavily reliant on oil and its derivative products (jet fuel, diesel fuel, gasoline, etc.) for their energy needs. The price of oil can be an important political factor; American administrations are quite sensitive to the price of oil.

Political enemies of the United States therefore have some interest in seeing oil denominated in euros or other currencies. The EU could also theoretically accrue the same benefits if the Euro replaced the dollar. However, the European economy could also be seriously damaged if the Euro were to appreciate a lot against the dollar or other world currencies.

Skeptics of the theory, for example Robert Looney, believe that the actual likelihood of a switch to denominating oil sales in Euros is unlikely. Most countries do not establish the denomination of their sales directly, relying instead on market based price markers such as West Texas Intermediate, North Sea Brent, or Dubai Crude. As a result they have limited ability to influence the denomination of sales one way or the other. A large number of traders would have to agree to a change in denomination before a change occurred.

Whether a falling dollar would actually hurt the American economy is disputed. A weaker dollar would lead to increased U.S. exports and decreased imports, which would decrease the U.S. trade deficit and benefit American manufacturers. On the other hand, imports would become more expensive for the U.S. across the board. Of particular concern is America's dependence on foreign oil. Many economists feel that the recent rise in oil prices is at least partially tied to the fall of the US dollar relative to most currencies. Since oil is priced in dollars, sellers have increased prices to compensate for their "real" loss of income. Economists generally agree that higher oil prices pose a risk of inflation, recession, or both. Inflation would almost certainly rise if the dollar were to depreciate heavily.

If I understand the use of markers in the exchange, I don't know that there is a definitive benefit to the exporter as much as there is a benefit to the country whose currency is used because, what is true today might not be true tomorrow and the markets are increasingly globalized. Just the fact there is a euro now is proof of that. What would actually happen to the various economies is theory. No can predict (with accuracy) how each government would react in buffering problems if such a major change occurred or what kind of ripple effect would come back to the countries thought to benefit, if any. I don't doubt that if the dollar dropped, there would at least be some immediate global stability problems and China might be pissed if they are holding all those reserves. But then I'm no expert either.

The 1987 Crash was a worldwide phenomenon. The FTSE 100 Index lost 10.8% on that Monday and a further 12.2% the following day. In the month of October, all major world markets declined substantially. The least affected was Austria (a fall of 11.4%) while the most affected was Hong Kong with a drop of 45.8%. Out of 23 major industrial countries, 19 had a decline greater than 20%.

 

[Damien Evans]

Class-A magical Artifacts belong to the Nut-Job-Subforum, maybe you, too? Thank you.

Reported.

 

[jsiv]

Then you might also know that since the end of the Gold-Standard, the US is printing much more money than they have to be backed up by their Gold reserves.

As do most countries on planet earth. The gold standard has essentially been gone since the 1930s, it's time to get over it. I hope, though, that you do not think this means that countries have no reserves -- they do, it just isn't gold.

Whether it's as much as 1:1, I can't answer, but it doesn't necessarily have to be.

How much gold does the US have in reserves? And the Euro countries?

I'm unsure how much gold the US has, but several European countries like Norway sold off all their gold quite some time ago. In other words, we have no precious metal reserves at all.

When it comes to Norway (and many, many other countries, I suspect), our reserves are primarily in the form of large amount of foreign currencies, as well as a certain amount of SDRs in the International Monetary Fund.

Okay, then it makes sense to keep the Dollar in possession. But to answer your "why should we" question: The Euro is getting stronger and stronger. It's an Issue of earning money, not of "we like this or that".

The world economies are so interconnected today that I think Flo is right when she says that you can't simple reduce it to this. The world just isn't that simple.

 

[Oliver]

http://en.wikipedia.org/wiki/Petrodollar_warfare

If I understand the use of markers in the exchange, I don't know that there is a definitive benefit to the exporter as much as there is a benefit to the country whose currency is used because, what is true today might not be true tomorrow and the markets are increasingly globalized. Just the fact there is a euro now is proof of that. What would actually happen to the various economies is theory. No can predict (with accuracy) how each government would react in buffering problems if such a major change occurred or what kind of ripple effect would come back to the countries thought to benefit, if any. I don't doubt that if the dollar dropped, there would at least be some immediate global stability problems and China might be pissed if they are holding all those reserves. But then I'm no expert either.

Well, that's the crux in this issue. So far I didn't find an expert who might know more about that. I even called the Deutsche Bank but they refused to forward me or give me informations via Phone.

But from what I've read, I can say what would happen if the Dollar suddenly drops - everyone would dump it's Dollar as fast as possible. Of course, also China. And I have no Idea which catastrophic consequences this would have.

But it's a very interesting Issue - and who knows: Maybe it was a major reason to invade. Some German articles stated that the Dollar issue is indeed a big concern from economical point of view.

 

[Oliver]

As do most countries on planet earth. The gold standard has essentially been gone since the 1930s, it's time to get over it. I hope, though, that you do not think this means that countries have no reserves -- they do, it just isn't gold.

Whether it's as much as 1:1, I can't answer, but it doesn't necessarily have to be.

I'm unsure how much gold the US has, but several European countries like Norway sold off all their gold quite some time ago. In other words, we have no precious metal reserves at all.

When it comes to Norway (and many, many other countries, I suspect), our reserves are primarily in the form of large amount of foreign currencies, as well as a certain amount of SDRs in the International Monetary Fund.

The world economies are so interconnected today that I think Flo is right when she says that you can't simple reduce it to this. The world just isn't that simple.

It isn't 1:1. That's the problem and the reason why the Dollar lost 90% of it's value since the sixties. And I don't know if the problem is the same in other countries. The exclusivity of the Dollar is that while it is the most used currency for in- and export - and every Nation who wants to buy Oil, also needs lots amounts of Dollars, the US has to print new money to fill the Dollar-needs of these countries.

Now printing the new money doesn't produce any equivalent for the new money and so the Dollar value itself is falling. And this means that while the US is exporting with it's own Dollars and importing using Dollars that lost a small amount of it's value, they are actually able to import more for "one Dollar" than they "have to export".

At least this is how I understood this issue so far.

 

[danielk]

But it's a very interesting Issue - and who knows: Maybe it was a major reason to invade.

"Interesting" and "who knows" doesn't cut it, Oliver. Not to mention that they is contradicting evidence suggesting that the US is actively trying to prevent the Dollar from rising. Not to mention that many companies in Europe, and Germany in particular, are already struggling to compete because of the high value of the Euro.

Hm, now that I think of it - maybe Germany tricked the USA into the war by planting the spurious WMD evidence they fell for. After all there's an economic incentive to keep the Euro low, which is obviously more than enough of a reason to trigger a war. What a cunning plan it was to play the anti-war hero at home, so they could have their cake and eat it too! Thank you oh so much Oliver - without your inspiration I would not have been able to see the light!

Why are you looking at me like that? Are you denying the truth?

 

[Oliver]

"Interesting" and "who knows" doesn't cut it, Oliver. Not to mention that they is contradicting evidence suggesting that the US is actively trying to prevent the Dollar from rising. Not to mention that many companies in Europe, and Germany in particular, are already struggling to compete because of the high value of the Euro.

Hm, now that I think of it - maybe Germany tricked the USA into the war by planting the spurious WMD evidence they fell for. After all there's an economic incentive to keep the Dollar low, which is obviously more than enough of a reason to trigger a war. What a cunning plan it was to play the anti-war hero at home, so they could have their cake and eat it too! Thank you oh so much Oliver - without your inspiration I would not have been able to see the light!

Why are you looking at me like that? Are you denying the truth?

Stop kidding. It's a widespread thesis and it isn't debunked. At least not as far I know - otherwise the Wiki-Entry probably would include it. So there is a chance that it might be true unless someone can debunk it. So yes, both of us are "Truthers" - having different opinions concerning an unknown issue.

But that's why I asked.

 

[danielk]

So there is a chance that it might be true unless someone can debunk it.

Exactly. There is a chance. Just as there is a chance for my TheGermansDiddit "theory" to be true.

Oliver, it is sad to see you descend more and more into woowoo land.

 

[Oliver]

Exactly. There is a chance. Just as there is a chance for my TheGermansDiddit "theory" to be true.

Oliver, it is sad to see you descend more and more into woowoo land.

Are there Aliens out there?
I don't know.

Is there a high possibility that life exists in one of the trillion*trillion*trillion*X sun-systems out there?
Probably

Daniel: Starting threads about Aliens is woo. Period.

 

[danielk]

Are there Aliens out there?
I don't know.

Is there a high possibility that life exists in one of the trillion*trillion*trillion*X sun-systems out there?
Probably

Daniel: Starting threads about Aliens is woo. Period.

Does that mean you get it now?

 

[Oliver]

Does that mean you get it now?

Your "Forscherdrang [Eng?]" for a skeptics-forum is astounding.

I'm interested in this issue. It's a political issue. It's a perfect topic for skeptics.

Just skip the topic if it's not interesting for you.

 

[Tailgater]

Your "Forscherdrang [Eng?]" for a skeptics-forum is astounding.

I'm interested in this issue. It's a political issue. It's a perfect topic for skeptics.

Just skip the topic if it's not interesting for you.

In defense of danielk, he has a point. While I find the discussion about the effects of the dollar and the euro interesting, the fact that you disguise the discussion as another "what caused the Iraq war" thread to be woo and borderline deserving of being in the CT forum.