Breaking: US $ being replaced as oil currency

[FourScore]

Breaking: US $ being replaced as oil currency (Updated)
by cosmic debris
Mon Oct 05, 2009 at 06:37:41 PM PDT

The story is breaking on Reuters, but it comes originally from Robert Fisk at the UK Independent. TheDemise of the Dollar http://www.independent.co.uk/news/business/news/the-dem...

Apparently several Arab states have been in secret negotiations with Russia, Japan, China and France to replace the US Dollar with a variety of other currencies including the Yuan, Yen, Euro and a new unified currency "planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar..."

As I add info as I find it, please discuss the implications in comments.

From Fisk's article

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

And more on China

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

More sources coming in now:

From Reuters: Gulf in talks on replacing US$ for oil: report http://www.reuters.com/article/newsOne/idUSTRE595076200...

From Bloomberg: Dollar Falls as Paper Says Arab States May Stop Using Greenback http://www.bloomberg.com/apps/news?pid=20601087&sid=awI...

http://www.dailykos.com/story/2009/10/5/790065/-Breakin... -(Updated)

[fascisthunter]

1. Looks like a lot of people will be losing lots of money.

[Canuckistanian]

24. And a very few will cash in

That's how it works.

[fascisthunter]

80. yup

[NMDemDist2]

2. we're done if this goes through

no reason to keep buying our debt should this happen.

crap.

[inna]

5. yep, we'll be in deep shit. MUCH deeper than we are already.

crap is right.

[marshall]

30. Everyone needs to eliminate their individual debt

Pay off everything--mortgage, car, credit cards. And use cash or don't buy it. That's how my grandparents got out of the depression.

[inna]

3. OMG. this is HUGE, if it's true.

i'm going to read the links right now. thanks for posting.

[Ruby the Liberal]

122. I am almost afraid to read them.

Decoupling from USD reserves could likely signal the end of our economy.

[unkachuck]

4. who's going to finance our wars?....n/t

[vincna]

7. That will be the least of our problems - nt

[calimary]

15. Gee, wonder what would happen if we just couldn't afford to wage war anymore?

[Pavulon]

16. What did Japan do? hmm..

not saying we would, but just answering you question

[SergeStorms]

137. We think we're a barbarous country now?

Wait until there's a concerted effort to devalue the American dollar and destroy the American economy. We have a stockpile of weapons that would do a lot of damage to those participating countries, and I dare say we wouldn't hesitate to use them. After all, we've been the only country to ever use nuclear weapons thus far.

I think all hell will break loose, militarily, if this should occur. And the cost of such actions would never be given a single thought. The cost of NOT taking such action would be far greater, at least in the minds of the military and war hawks who seem to love "sticking a boot up someone's ass" at the drop of a hat. World War III, here we come.

[Pavulon]

6. That would be a shotgun blast in the mouth of china

who do you think has massive holdings in the dollar? If it falters they loose as much as we do.

[JackRiddler]

28. Very colorful language, but it's projection: the shotgun is in the mouth of the United States

China would get many pellet wounds from the blast. Also have the head splattered all over it. But it's not China's head.

And it's "lose."

[Javaman]

82. Yeah, I guess that 1 trillion in t-bond they own are going to just go away

[JackRiddler]

89. Which means what?

Are they enslaved to it, forevermore? If they lose a percentage, will this be the first haircut anyone ever took?

What about the next trillion they'll be spending on oil? Maybe they want to get more for that.

Do you think that out of all the costs and benefits of various moves one might calculate, there are no variations where they figure it would be smart to let their currency appreciate -- or where they might take it as assumed that the dollar's dropping anyway?

You could add some additional data to your analysis - like what actual Chinese economists are currently saying about the dollar.


(Never mind - your use of the "eyes" smiley validates your argument.)

[nadinbrzezinski]

104. You might want to 'splain the term haircut

outside of wall street, most main streeters don't get it, why they think the Chinese cannot do this... would be cutting their nose and all that.

So allow me.

Haircut: Measured losses in an investment that are less than would be if the investment was allowed to crash.

In this case the matter at value is the dollar. They seem to be preparing for a controlled fall instead of an outright crash. It will help them, but it can have disastrous effects in the US.

I know, sad, but these terms are not in common circulation, and I'll offer that this is quite on purpose.

[Javaman]

110. LOL a controlled devestment of 1 trillion dollars! LOL

fine, run with that. LOL

[nadinbrzezinski]

112. That my dear is what you are watching

by the way... Spaniards laughed, so did the Dutch, of course the French and the British did as well. Care to tell me where their Empires are right now?

The law of history Americans never want to learn, but will nevertheless... Empires rise, and chiefly FALL.

I should add, there are far more empires in the dustbins of history that Americans care to imagine, or even think.

As I am fond of saying, pick up a book and learn.

[Javaman]

114. I'm laughing at the belief that they will actually be able to control the

divestment of 1 trillion dollars. My dear.

I honestly don't think that it will go as smoothly as they think it will.

As soon as the rest of the world notices that china is divesting "slowly" the others who have much more to lose and also have large investments in the dollar will be soon to quickly divest.

I see what might be a run on the back in a reverse sort of way.

One thing I have learned in my life, when money is concerned, or the loss of it, very rarely do cool heads prevail.

[Joe Chi Minh]

124. Do they actually have it or is it debt? If the latter - what you never had

you don't miss. Or do you think its going to break their economy?

[wolfgangmo]

144. OK - look at it this way.

Even if you assume that they would lose ALL OF THEIR INVESTMENT OF 1Trillion (not likely) that would still only be the loss of $1 per person for the country. So if they add $1 to everyones taxes for one year, they could afford to walk away from the loss.

Call me crazy but I think they can afford to do this if it will mean a long term gain for them, which a switch of oil transactions to the Yuan would be. A huge long term gain. The fact that all international oil transactions have been done in US dollars since 1972 has propped up our currency since then. If it gets switched, that means that the only reason for buying reserves of US currency will disappear and the Yuan and China will get all the benefits of the worlds economy fighting over (and propping up) their currency.


If the US dollar is no longer used for oil transactions then our money will devaluate by huge percentages; we are talking a wheelbarrow to buy a loaf of bread devaluation.

On the bright side manufactoring will move back to the US. Why we will be the next sweatshop destination. You should run home now and practice your sewing skills - you, or your kids, will be putting together a lot of t-shirts for Chinese to wear.

[louis-t]

151. I officially question your math.

When did China get a trillion people?

[wolfgangmo]

143. No they won't

What you don't seem to understand is that T- notes are basically loans. They will end up owning a significant portion of our country at fire sale rates.

If this goes through, then you will need a wheelbarrow to buy a loaf of bread. This is another step toward America as a fascist state.

[louis-t]

150. It's 'l-o-s-e'.

Sorry, pet peeve.

[Phoebe Loosinhouse]

8. I thought this was one of the major reasons the US rained on Saadam.

That he threatened to deal in Euros.

[Number_Six]

136. You are correct!

Saddam was looking at Euro's as "being more stable", and at that time, the Euro represented better value.

[Pavulon]

After a brief read, this is just a stinky fart..

"Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq."

recycled shit. not news.

[wolfgangmo]

145. There is a difference

Rather than one rogue crank in OPEC deciding unilaterally to switch their oil purchases to the Euro (which didn't really happen except that it was one more line item in an oil contract) it had no effect on the worldwide purchasing habits of oil buyers.

What is being discussed here is another kettle of fish. If all oil purchases turn to another currency then the effects on our economy and our communities will be devastating - run away inflation and currency devaluation, loss of jobs and company headquarters, radically bad shit overall.

I just got off the phone with a buddy of mine in London who is a lawyer whose only job is writing contracts for oil sales and he told me that this is going to be devestating to the US economy. He suggested moving before all our worth is flushed down the toilet. He did mention that Canada, being a net exporter of oil, gas, etc. will be in great shape.

[Barack_America]

9. So our country did not survive Bush after all.

[Joe Chi Minh]

125. Did you think it would?

[Pavulon]

10. OMG we will be eating our lolcats

this is the end of the world. Oh wait, nothing changed. China is flat fucked if we stop buying their plastic trash.

[TheMadMonk]

135. Don't bet on it mate.

In my lifetime I have watched Japan rise from a marginally acceptable supplier of cheap and nasty goods in the seventies to a manufacturing powerhouse, pass that batton on to Hong Kong, Singapore, Taiwan, even Korea and Indonesia. Each becoming a significant consumer market in their own right.

And all in a position to pay CA$H. China and SE Asia in general have enough dollar holdings between them that they can probably hold its price wherever they damned well please simply by selling to each other's consumer markets.

[wolfgangmo]

146. Yah - and YankeeVille is the only country to buy stuff from China

Another right wing talking point just like these ones.

America is number 1 - best medical care, best universities, best education system, best place to live.

And these - if the US gets public health care then medical research WORLD WIDE will stop and everyone will die - if the banks aren't bailed out then everyone will lose their houses.

Honestly, do you have any other opinions by ElRushbo that you want to parrot?

[nadinbrzezinski]

11. And that which you hear is the American Empire CRASHING

by the way... this is actually moving faster than I expected... and any happy talk of green shoots, can them...

Hyperinflation comes to mind, only reason we can print so much money is... we are the reserve currency.

[Pavulon]

14. Does anybody have a recipe for house cats and dirt

What we will do after the nation falls apart.

[nadinbrzezinski]

18. Well you could google for game meat

[Pavulon]

19. I think we will be ok, and my couch killers will not be on the menu

this article is quite reactionary, devoid of value, and not really news.

[nadinbrzezinski]

23. "xept there have been rumblings of this happening for a while now

as to your couch killers... old cat is like old parrot, tough...

[wolfgangmo]

147. Given enough time and enough BBQ sauce any meat is tender

Even Republican.

[ChimpersMcSmirkers]

49. And not moving as fast as you probably hoped.

Really, what's our inflation rate right now? Oh yeah, it's negative.

http://www.usinflationcalculator.com/inflation/current-...

[SoCalDem]

76. Whatever it is (officially) , it's FAKE

EVERYTHING is going UP UP UP.. well except for plastic flipflops from China and clothing knock-offs made by Indonesian 9 yr old captive girls.

Gasoline here is still over $3.00 a gallon, people cannot afford to take a day off work, for fear their boss will realize they could do without them, cars take 7 years to pay off, houses end up worth less than you paid, in just a few months, 401-ks are now 001-ks...and in real dollars, people are making less than they did in 1980..

[itsrobert]

12. Not going to happen.

Sorry chicken littles.

[Nikki Stone1]

20. Why not?

Do you have some news?

[JackRiddler]

29. Because history ended, don't you know?

[nadinbrzezinski]

31. Jack did Mr. Fukuyama take over you?

That was WAY TOO EASY... and I hope you do not mind I get some fun out of this.

[Nikki Stone1]

37. And I still don't know why this isn't happening.

[nadinbrzezinski]

40. The End of History

by Francis Fukuyama, once a big time neo con.

Since history came to an end after the US became the single power (yes no shitting you that was his premise) all would remain as it was.

We both know how that worked...

For the record Francis has denounced his erstwhile allies. They had a fall out, a serious one, over Iraq.

[Nikki Stone1]

41. AH. Thanks. Are you as worried as I am?

I fear this means certain war.

[nadinbrzezinski]

42. We don't have the troops

it means the end of empire... and could be just as bad.

[Nikki Stone1]

43. Any guesses on what happens then?

?

[nadinbrzezinski]

46. Hyper inflation, we need to start printing the M-3 again

the us will fall from being an empire to just one more country, if we are lucky in the second world.

It took the UK longer to recover from WW II because they stopped being the reserve coin than the rest of Europe.

Very worst case... war, civil war. I don't think we really have the troops for any more foreign interventions, but this will trigger, could trigger, something ugly in the US. Perhaps, like the USSR, the fall of the American Empire will be followed by dissolution.

Regardless a return to provincialism is in the cards.

[Nikki Stone1]

53. Southern California might become its own state.

[nadinbrzezinski]

55. That is scary... Issa as President

now that one IS SCARY...

[Nikki Stone1]

57. He could fund his own recall

[nadinbrzezinski]

60. Been readying the nine nations of Norht America

dated, but still useful. Hard to find, but worth the search. (Actually at Amazon you can)

[amandabeech]

95. Perhaps, but the Pacific Fleet is headquartered in San Diego.

For that reason only, it might be very, very difficult for Southern California to pull out.

Then there's the example of the Civil War.

[cherokeeprogressive]

45. Can you be specific about why you think we'd need troops in the first place? Educate me.

I'm more than a little confused. I see you writing melodramatic posts with no substance.

Please tell me what specifically what you predict would be the outcome and why?

[nadinbrzezinski]

47. Short of a draft do you honestly think we have the troops to invade Iran

Saudi Arabia, perhaps China?

Unless of course you want to release some nukes.

Melodramatic is in the eye of the beholder. And yes Virginia the US Military is stretched to the breaking point.

[cherokeeprogressive]

51. I guess maybe you missed my point, which would be the question of why would we consider

invading ANYONE? To what end?

I've been looking at the import/exports of Japan, China, and Russia since I saw this OP. Let's say the dollar plunges to next to nothing...

Who's going to buy all those Japanese cars? Right now we buy nearly 30% of the cars they build.

Who's going to buy all those Japanese computers and electronics? We buy nearly 22% of the electronics they build.

We buy 30% of everything China exports. Who would make that up when we can't afford their goods?

Over 50% of what we import from Russia is petroleum. Someone is going to take our place when we can't afford their oil any longer?

Again I ask, invade another country because of this development, to what end?

And if you think for a moment that I'd advocate dropping a nuke on ANYONE short of having one dropped on US soil first, you're barking up the wrong tree.

Be civil. Educate me. I say that with all due respect.

[nadinbrzezinski]

54. We did, or have you forgotten Iraq

also I was answering a question, regarding war.

I know Americans have the historic memory of a gnatt, but we did... in the last eight years.

[cherokeeprogressive]

56. Your answer doesn't address my questions at all. It's like we're speaking two different languages.

Please do me the favor of answering WHY you think we'd invade another country over this?

WHY. It's a simple question, it really is.

Question: Why would the United States invade another country over a situation where the dollar was no longer the international standard for oil trading?

[nadinbrzezinski]

59. RESERVE CURRENCY....

google it up.

[cherokeeprogressive]

62. lol

[nadinbrzezinski]

65. In other words we really do not understand how the world works

for real.

Okie dokie, welcome to my ignore list.

[Subdivisions]

61. The dying throes of a failed empire, perhaps? n/t

[northernlights]

141. in the case of Iraq

it was so we could get control of their oil. Remember how their oil was going to pay for the war?

And we've all seen how well that worked out, lol.

[wolfgangmo]

149. You guys are speaking different languages.

You are asking for rational reasons and he is saying that they US doesn't have much of a history, at least recently, or rational reasons for invading or attacking or subverting another country.

You are right - we don't have rational reasons. He is right - we don't tend to use rational reasons.

[JackRiddler]

68. To summarize what you're saying: Who is going to buy buy buy buy buy buy?

The answer has always been, the ones who make make make make make make. The US now makes less than it did, both relative to the world and even in absolute terms.

Other outlets for production will be found, as they always have been. Economies will develop. The point to these countries is that the US has peaked and begun to decline as a buyer. The answer to your question, who will buy all this production, can no longer be the US. It has been a buyer on credit and it has reached the limits of that credit and can no longer sustain the levels of buying you are talking about. So they will take their chances, stop exchanging so much of their production in exchange for air-dollars, and seek growth markets elsewhere.

[Subdivisions]

71. All because we don't have enough of our own oil. n/t

[Uncle Joe]

88. And other than averting global warming climate change, that's an excellent argument

for rapidly converting to renewable energy sources.

We should be leading the world and exporting green technology and not need to be dragged kicking and screaming in to the 21st century, wasting our blood and treasure clinging to finite and ever diminishing energy sources.

[northernlights]

140. Russia will be fine

China wants their petroleum. There is no shortage of petroleum buyers around the world.

Other than that, I suspect you are correct. They need our consumerism as much as we need their loans.

I also think that if they were seriously planning to drop the dollar, they wouldn't go announcing it to the world. They'd make their plans and quietly pull the rug out from under us.

They may well do this. But I think it's too soon to say it's imminent. Just saber rattling to get Obama to do whatever it is they want him to do...maybe raise interest rates so they get a better return on their loans?

[wolfgangmo]

148. 10 years ago - no one in power was talking about this.

7 years ago it was mentioned for the first time in an OPEC conference but was voted down overwhelmingly. 3 years ago in was voted on again by OPEC and it got 3 solid votes.

Now it is also being talked about by G20 members. If they are talking about it then they are thinking about it. And they would only be thinking about it if they thought that it might be a viable idea.

But hey, O' great Swami, I'm sure that your vision of the future is the right one and everyone, including the G20 is wrong about this.

[sea four]

13. We need to fix our fu**ing addiction to oil

like, NOW. Or more like forty years ago, after the oil shocks in the 70s. If this is true, it's VERY big, and gas prices are probably going to go crazy, which means the economy is going to get worse than it already is. It also means there won't be any more of these trillion plus dollar deficits. This is not good news at all, I hope it's not true...

[mmonk]

78. When we set up this system with our currency tied to oil,

it was so we could control a lot of the world. It became a sort of tax on the world for our geopolitical interests and a way to finance it.

[amandabeech]

117. We need to stop our addiction to imports generally.

If we start to have problems with China, Wal Mart, Target and Best Buy will be empty.

No more clothes and no more electronic stuff.

No bicycles.

No car parts.

No nothing.

It would be just as bad as no Middle Eastern oil.

[Kaleva]

17. value of the dollor drops, actual value of our debt to China plunges.

[Nikki Stone1]

48. Hmm

..

[amandabeech]

119. The Chinese don't move unless they have their behinds covered.

Methinks that they're prepared to write down their U.S. investments.

They must think that the investments will go down eventually anyway, so they're acting in their best interests.

My guess is that the Chinese will move to take over other markets that have consumers with a few coins jiggling in their pockets.

My guess is that they'll go after the European and Latin American consumer with everything they have.

[Bozita]

21. Precious metals up today

http://goldprice.org/silver-and-gold-prices /

Gold Price Close Today : 1016.70
Change: 13.50 or 1.3%

Silver Price Close Today : 16.513
Change: 30.1 or 1.9%

Platinum Price Close Today: 1,295.30
Change: 12.00 or 0.9%

Palladium Price Close Today: 301.85
Change: 6.00 or 2.0%

[Nikki Stone1]

26. I'll bet.

Kick

[tucsonlib]

128. And One Day Later......

Gold Price Close: $1039.70

At that price, I'd be tempted to sell my gold coins.

If I had any.....

[Dyedinthewoolliberal]

22. This is thought

by some to be the real reason Bush invaded Iraq. If the US controls the oil, they have to use US money

[Subdivisions]

25. Anyone that's been paying attention has expected this for months. No surprise. n/t

[Nikki Stone1]

27. Then a dollar dump...then what?

New currency? Death of our nation?

[Kaleva]

32. value of dollar plunges, value of national debt plunges, imports cost much more..

exports are more competitive and so on.

[Nikki Stone1]

38. We don't make anything anymore

Everything will go up.

[many a good man]

66. Exports will go up; we're still the top mfg nation

[Nikki Stone1]

83. OK

..

[Statistical]

81. We don't make ANYTHING? lol.

Sound bites are fun but almost always inaccurate.

Our economy is $14.4 trillion. We import just $2.1 trillion of that. Where do you the think the balance ($13T+) comes from? Magic.

We also export $1.28 trillion worth of goods around the world. We are the third largest exporter in the world.

1 Germany $ 1,530,000,000,000 2008 est.
2 China $ 1,465,000,000,000 2008 est.
3 United States $ 1,377,000,000,000 2008 est.
4 Japan $ 776,800,000,000 2008 est.
5 France $ 761,000,000,000 2008 est.
6 Italy $ 566,100,000,000 2008 est.
7 Netherlands $ 537,500,000,000 2008 est.
8 Russia $ 476,000,000,000 2008 est.
9 United Kingdom $ 468,700,000,000 2008 est.
10 Canada $ 461,800,000,000 2008 est.

If the value of dollar falls that domestically produced goods stay flat while goods produced in other countries rise. This makes American producers more competitive. Take autos for example. Honda Accord competes with say Ford Taurus. They are equally priced. If dollar falls 10% Honda needs to raise price of car 10% because they get less Yen for each dollar (and their bills are in Yen). So Honda raises prices and the Taurus is more competitive.

The advantage is even greater on exports. We can sell goods for cheaper in Euros for example and receive more dollars per Euro. Take a widget company. They build widgets for $10 plus $1 for shipping to Europe. Currently they are selling them in Europe for 9E. The widget company gets 9E = $13.23 So the companies gross margins is $2.23. The market won't support higher prices in euros. The dollar falls 10%. They still sell the widget for 9E but now 9E is worth $14.53 for gross margins of $3.53. Gross margins rise 58% for a 10% move in dollar. The US widget maker has lots of good options now. They could save the extra profit to build more efficient plant (lowering their cost), they could lower price and squeeze out competitors = more market share = more product = more labor.

The idea the US makes nothing is simplistic at best

We are the worlds largest producer of grains & feedstock, auto parts, aircraft, weapons sytems and production machinery. We are major exporter of autos, beverages, food, software, and semiconductors. The largest markets for our goods are Canada, Mexico, China, Japan, Germany and UK.

[northernlights]

142. so this could actually be good news

if we start buying more of our own shit, then local biz will do better, hire more, etc. Works for me.

[Joe Chi Minh]

126. Maybe you and we in the UK will start making more for ourselves again,

employing our own workforce. It surely wouldn't be on any historic, "consumerist society" scale, but it will be for the better. Our movers and shakers, less able to move and shake us, will allow us all to relearn some basic human values. It's getting to that point that's the worry, isn't it?

[Subdivisions]

35. Probably the biggest war this planet has ever seen. n/t

[Nikki Stone1]

39. That's what I am afraid of.

[Holly_Hobby]

33. Anything to do with this? Medvedev pulled it out of his pocket

at the G8 earlier this summer...





http://www.telegraph.co.uk/finance/currency/5796892/Rus...

[nadinbrzezinski]

34. It could... and this is bad news for the US

as I said above, this is the American Empire crashing all around us... All those duck and cover drills may be useful right about now.

[mdmc]

101. kick for the pic of one world currency

[Ozymanithrax]

36. Saddam did this, and was invaded...

Who the hell do we invade this time?

We ae stretched to thin to fight a war with China. But a major mideast war would throw a monkeywrench in the works.

Anyone know a country in the middle east willing to start World War III and save the empire? Is there a country out there to win one for the Gipper.

One hopes, that President Obama will be willing to shephard the US into a Post Imperial Age rather than try to hold on to the shards of power.

[Subdivisions]

50. Think about it. We're over-extended in war. We're over-extended in what we owe

to China. We're over-extended on national debt. We've completely worn out our welcome on the world stage. NOW is the prime opportunity for a bloc of states to move against the U.S. empire.

[cherokeeprogressive]

52. Move against us as in invade our mainland?

[Subdivisions]

64. You really have no idea about any of this, do you? Of course not invade our

mainland! Sheesh! Are you serious? When I say move against us, it doesn't necessarily mean by military means. There are more ways to fell an empire than by military offensive, means which are apparently espoused by many other nations - contrasted with our brutal techniques of taking what we want by force.

You really should do some catching up.

[twitomy]

152. Kinda straying off topic, but

When you talk about countries making "moves against us" it reminds me of EMP. 1 nuke detonated
at high altitude over the mainland and we are thrown into the 19th century as all electronics would be toast. No cars working, no electricity, backup generators wont work, all electronic communication toast, all electronic medical equipment toast, transformers toast... Like David killing Goliath with one small stone....

[Ozymanithrax]

70. No nation can project power through an invasion force across...

two oceans in the face of a nuclear armed state. But they can filet our economy like a fish on a sushi board. Because we are the reserve currancy, the US is able to print far more money than our economy warrants. When we are no longer the reserve currancy, we will be unable to maintain the largest and most expensive military in the world. Once that military is gone, the military industrial complex goes next. Several million people find themselves unemployed. With the dollar worth half or less than what it is now, any recovery of the economy will fail. Military force is the clumsiest way of breaking an empire.

[Ozymanithrax]

67. Which is what is happening...

Our economy is based on the dollar being the reserve currancy. This is an agressive move to end the dollar hegemony. At this time, there doesn't seem to be anything the US can do as far as I can see (which isn't too far). I merely suggested that Bush's solution to the problem is open if somebody else will start the whole thing.

Personally, I think we are long overdue to the empire to end. President Bush should begin the reindustrialization of the US. We should withdraw from free trade deals. That, of coruse, won't happen.

[Subdivisions]

69. Our entire Dollar supremacy could only continue to stand as long as

the rest of the world was willing to play along. Now they aren't.

[nadinbrzezinski]

72. You mean Obama but yes

I know it is late...

[A HERETIC I AM]

73. "President Bush should begin the reindustrialization of the US."

Um, your Freudian slip is showing.

[nadinbrzezinski]

74. Nah it is late... take my word on that

[Ozymanithrax]

79. Sorry. wrote the wrong name.

And I never cross dress.

[invictus]

87. +1

[Horse with no Name]

133. No wonder they sat back and watched us expend our blood and treasure

They were tiring us out before the main event.

[G_j]

44. wow nt

[theophilus]

58. Run for the hills!!!!!1 We're dumed!!!!!1 n/t (too scurred)

[TheCoxwain]

84. You mean 'doomed'?

[earth mom]

63. Time for the New World Order and/or the North American Union.

[Echo In Light]

85. Coming soon to a theater near YOU!

Yikes

[TheKentuckian]

75. I hear a carrier group makes a fine pirate fleet (nt)

[tjwash]

77. Wow. You mean that there's a rest of the world that uses resouces too?

The real problem with this is that it fucks up the scam the US has been running for decades. The US pays for oil in US-dollars but then the dollar inflates and is worth less than before.

It's not that the US will really have a shortage of oil, but the real problem for us is, that we'll have to *gasp* pay full price.

[amandabeech]

99. Oil may be priced in dollars, but the price of oil in dollars goes up

when the dollar goes down and has been for a year or so at least.

Pricing to a basket will accelerate a trend that has already begun.

[undeterred]

86. We're screwn.

[The2ndWheel]

90. I wouldn't worry too much about it

http://www.youtube.com/watch?v=3BVqIjKyJh0

This guy has things under control.

[Arugula Latte]

91. Just speculating here, but ...

wouldn't it be interesting if the U.S. suddenly "discovered" a cheap, alternative source of fuel, "coincidentally" pulling it out of its ass at the last minute?

[mdmc]

105. solar car

wouldn't suprise me in the least.

make it only for the usa = the rest of the world would need to pay through the nose for gas.
we ...

[RUMMYisFROSTED]

139. Um, we found this 500 mpg carburetor lying around...

[Deja Q]

92. Here are a few more articles on the issue:

http://news.google.com/news?q=dollar+oil+replaced

[JackRiddler]

93. NYT top headline, right now: "Stocks and Gold Gain as Investors Shun the Dollar"

By JACK HEALY 37 minutes ago

"Shares rose ahead of the start of earnings season, and the value of the dollar skidded as investors fretted over a report that crude oil could one day be priced in other currencies."

Don't these people know that it will "never happen" and that Beijing would never go along with it because Chinese children eat dollars for breakfast? (now they're cheaper than Cheerios)

[nadinbrzezinski]

97. Hey they DO have fiber in them

that special linen paper they use... to print it.



Don't scoff, we may...

[JackRiddler]

100. That's right, dollars are made of cotton, not wood!

Therefore they cannot sink in water. (I don't need to test that hypothesis, it's an axiom of physics.)

[Strelnikov_]

98. "If something cannot go on forever, it will stop"

The current accounts imbalance will end in some manner, either with a wimper as a result of a proactive controlled descent, or with a bang as a result of ignoring the problem because 'they just have to continue to buy our debt'.

[AllentownJake]

103. The argument the Chinese have to keep supporting us because they have to

Always makes me laugh.

Eventually people wise up and take their losses. It is like saying I lost 20,000 at the black jack table and my wife will kill me that I lost it so I need to spend another 20,000 to win it back.

Eventually you either run out of money to keep playing the game, or you stop playing black jack and face your wife.

[nadinbrzezinski]

106. My question is, will she meet you wiht a rolling pin or without it?

[AllentownJake]

107. In the case of the Chinese

Tiamen square will look like a modest protest. The way they've been able to pacify their people the past 20 years is with increase in lifestyle.

Same way our population has been pacified the past 30 years.

[nadinbrzezinski]

108. 'cept we have hit that wall now

and it is unsustainable. I wonder what else our guv'ment will use to keep us pacified?

[AllentownJake]

109. Right now it is unemployment payments

and some re-educational benefits. Once those expire, or become to expensive to maintain there is going to be some serious social unrest unless they move to foodstamps and direct rent payments.

President Obama better start thinking like FDR with national works programs or he is going to be facing 30 million out of work desperate Americans with time on their hands.

Part of FDR's reasoning for doing what he did was his own political survival.

[JackRiddler]

115. Except in this case the wife is China

And when the gambler returns having shot it all at the tables, she's found another lover. A whole set of them!

(Sorry, I'm killing the metaphor, I know.)

[AllentownJake]

116. The rest of the world has begun discussions of moving on

Bush/Cheney was a bat shit crazy asshole. I really don't care how nice Barack Obama is. The world has come to the realization that a batshit crazy person can become our President and as such is making plans to weaken us.