Quote from achilles28:
I think part of this is an extension of the Arab Spring. Two birds with one stone. Pressure from above, pressure from below. The pressure from above is US military. Pressure from below, are domestic riots/civil insurrection spurred by (even) higher crude costs, against middle eastern Governments the US wants deposed.
Also, if OM77 is right about Iranian oil production accounting for 20% of global output, how can the Saudis and Libya make up that shortfall. That's a tonne.
Quote from trefoil:
Ex a blockade the oil would continue to flow, just to Asia. So Libya/SA would only have to make up for whatever shortfall there is in Iran's sales that would impact global prices.
The idea is to shrink the market for Iran's crude, not make them stop pumping. Only Iran gets hurt that way.
Quote from PocketChange:
Everything is about the US struggling to maintain the dollar as the world's reserve currency... The dollar must remain the only currency to trade and settle oil contracts otherwise we are at end of game.
This is a matter of National Security and we either wage economic war and force them to trade in dollars or we wage a secret war by executive order and propaganda. This is very much a matter of sustaining our way of life. If the world were to adopt settling contracts in Gold the dollar would immediately collapse.
Quote from trefoil:
More of this stupidity?
Whether oil is settled in dollars, euros, or freakin' chicken feathers makes no diff to whether or not the dollar is the reserve currency.
We rank first in both FDI to other countries and FDI into the US, we're number 4 on the export list and number one on the import list. There are no restrictions on trading dollars. In terms of political stability, we're at the top.
All of which means whether or not some underdeveloped country that only exports oil and is completely dependent on that for their livelihood decides tomorrow to settle their accounts in euros makes no difference at all to whether or not the USD remains as the reserve currency of the world. As if some pimple on the ass of the world economy is going to decide this kind of thing.
Honestly. Where do you guys learn your economics? From the side of a box of cereal?
Quote from achilles28:
You've got some obvious anger issues you need to deal with. You come off as an arrogant prick with an axe to grind.
As far as your assertion on oil pricing, it's wrong. The US negotiated dollar-based commodity pricing after WW2 for a reason. Even if the world only transacts 70% of crude purchases in dollars, 1 month of oil purchases equals 1 year of FDI into the US. Exports is clearly the largest dollar driver (@110 billion, a month), but even still, is eclipsed by crude purchases at 190 Billion a month. And that's just crude oil! That doesn't include natural gas, agriculturals, metals, softs etc.
Political stability, convertibility, exports, productivity are huge metrics, but they're also shared by non-reserve Countries, mostly in the EU: Britain, Germany, France, Japan. To wit, BRIC countries are moving away from dollar-based crude transactions, as are middle eastern despots. This all plays a role. The ballooning deficits aren't sustainable and won't be tolerated by foreign investors. So besides the obvious, the real crux of reserve status is: Treasuries, USD-priced commodities, and military superiority. 1 is under attack, now (commodity pricing). A second will weaken in the near future (Treasury demand). Military is undeniable. All that to say, i think you suffer from it can't happen here syndrome. The writing is on the wall. Even US dignitaries, Treasury and Fed officials are calling for the end of reserve status. That should tell you something.
Quote from trefoil:
Oh please.
US CDS's are priced at around 55% of the price of German CDS's. That should tell you something.
As for the rest, reread my post. Common sense: if the USD is the most used currency in trade, there are no exchange controls, and the country is politically stable, it will be the reserve currency. Why? Because those are the things that count.