I find interesting to hear the conspiracy theorists say that when the godman ENTIRE administration AND congress wants a weaker dollar, having oil priced in euros would surely help on that. Why on earth would they want to go to war to support some kind of dollar 'hegemony' when they love to see the dollar tank?In fact the argument could be they went to war to pile on debt and make the currency weaker not stronger
"The US went to war because iraq wanted oil priced in euros"
- Thread starter Daal
- Start date
Good question. I'm not good at this stuff, but when oil is priced in EUR and the US$ collapses, which some expect it to do whe the Asian economies witdraw their investments, oil will become unpayable for the US. The whole country would collapse; that's worth a war, don't you think? Albeit one of the last ones from a crumbling empire.
Ursa..
Daal
As Ursa said above, the US may want a weaker $ but will wage war to avoid a worthless $. Moreover, the inflationary impact of all those $$$'s now outside the US heading back home will economically devastate the US. Just look at 1920's Germany for a taste of what can happen under an insane inflationist administration.
As Ursa said above, the US may want a weaker $ but will wage war to avoid a worthless $. Moreover, the inflationary impact of all those $$$'s now outside the US heading back home will economically devastate the US. Just look at 1920's Germany for a taste of what can happen under an insane inflationist administration.
Don't agree with that.
Euro$ returning to the USA will buy inflated assets (in real USD terms) which are cheap relative to currency fluctuations. That serves to provide a willing buyer when no willing domestic buyer exists. Much like how the Japanese overpaid for rockefeller center, but maybe this time its securities, etc... It provides either momentum to fuel the fire or an exit point for the 'smart money', depending on your perspective. The reality is that the total dollarized holdings of the USA are so great that even returning eurodollars will get swallowed up by - whatever.
Then, once foreigners are the bag holders, and their domestic markets yield profits, the price of those assets relative either to intrinsic value or currency exchange value can fall.
Rinse & Repeat.
BTW, and I will eventually post about this in some more detail after doing some intensive research, all this talk about hyperinflation & weimar germany is missing one important fact: the world has decoupled from the gold standard. It is a world of competitive devaluations which will probably prevent a real hyperinflation in the major currencies (EUR, JPY, USD) barring some sort of catastrophic sea-change in one of those countries/regions (like china invading japan, or the french sneak attacking germany, or a Jericho-like scenario here in the states). Hyperinflation is reserved for the silly banana republics that decide to do stupid things with their economies and are beholden to the IMF, world bank, whomever.
Have the inflationists also considered that commodities can also suffer from competitive devaluation, in the form of either reduced demand through economic slowdown, or increased supply through increased production? You're not safe in gold either, sorry. Interestingly, equities might be your best bet, despite it being a 'dumb money' move.
In such a setting, if you lived in afflicted country, the value of your bank accounts would be the least of your worries.
I think I am beginning to understand.
Excellent Commentary as Usual..........
The statements that you are making about competing currencies...obviously one would include interest rates to create increasing or decreasing valuations...which in turn are pushed by both local politics and overall economics....
It is amazing how forceful politics can be which can impose further future havoc with respect to the currency in question...
One does need to view the total comparable valuations after the interest rates are taken into consideration...This can change the surfacial view of the lone currency...quite dramatically...
The ending total comparative value is the real comparable...not the items on the surface...
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Also one may note that a country can be viewed much like a stock in terms of valuations...ie...if legal largesse....labor...taxes...monetary policy...corruption....etc...when combined represent a much more costly way to produce the same products...then obviously there should be some significant discounting....and premium additions where efficiency exists...
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Good commentary.....
And needless to say....Venezuela is killing itself as we speak...in terms of valuation devastation...Big farmers are wishing they were somewhere else etc....telecom...oil...pharmacy...steel...etc....etc....
The statements that you are making about competing currencies...obviously one would include interest rates to create increasing or decreasing valuations...which in turn are pushed by both local politics and overall economics....
It is amazing how forceful politics can be which can impose further future havoc with respect to the currency in question...
One does need to view the total comparable valuations after the interest rates are taken into consideration...This can change the surfacial view of the lone currency...quite dramatically...
The ending total comparative value is the real comparable...not the items on the surface...
......................................................................................................
Also one may note that a country can be viewed much like a stock in terms of valuations...ie...if legal largesse....labor...taxes...monetary policy...corruption....etc...when combined represent a much more costly way to produce the same products...then obviously there should be some significant discounting....and premium additions where efficiency exists...
......................................................................................................
Good commentary.....
And needless to say....Venezuela is killing itself as we speak...in terms of valuation devastation...Big farmers are wishing they were somewhere else etc....telecom...oil...pharmacy...steel...etc....etc....
Its a race to the bottom with all the currencies printing paper and debt at accelerated rates in order to maintain export competitiveness and trying to save some of what decent jobs are left.
There is only so much oil that can easily be pumped, and now that we've been so STUPID as to run deficit on deficit, and comsume like gluttons, those who now hold those dollars can outbid us for oil with them, regardless of which debased paper currency you measure in.
I think we went to war to prop up our economy with defense and security jobs, and put people to work. Afganistan at the time didn't look like it was going to do the job in that regard. Maybe there was also the hope that a freed Iraq would become our friends, and allow our oil companies in to pump oil for export to here. I wonder if the Freedom of Information Act will reveal that 20 yrs from now.
There is only so much oil that can easily be pumped, and now that we've been so STUPID as to run deficit on deficit, and comsume like gluttons, those who now hold those dollars can outbid us for oil with them, regardless of which debased paper currency you measure in.
I think we went to war to prop up our economy with defense and security jobs, and put people to work. Afganistan at the time didn't look like it was going to do the job in that regard. Maybe there was also the hope that a freed Iraq would become our friends, and allow our oil companies in to pump oil for export to here. I wonder if the Freedom of Information Act will reveal that 20 yrs from now.
I wonder how many of the surviving relatives of the 650,000 innocent civilians (aka collateral damage) who have died so far would be so blasé and understanding.
Impeach, then indict.
