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I bet this would put a lot of urgency in FIA's quest to replace oil somehow.
If you wish to understand why, in my humble opinion, this seems important, here is a rather old article on the subject, that I believe is one of the more or less balanced I've read. At least is hard to accuse the american Navy of harboring wacko conspiration theories (or perhaps it isn't?). Anyway, it gives some hints on the impact this news could have. I quote:
"A switch to euros for oil trading will not happen in my lifetime...governments can make any statements they want, but that's commerce."
Bruce Misamore, Chief Financial Officer, Yukos
Russia has hinted several times that is considering the same move as the iranians. I am sure that USA have to retaliate somehow, given the current political scenario.
Time might be ticking: stability in Saudi Arabia is becoming more and more important and everybody knows that... As Fark says, EVERYBODY PANIC!
Merry Christmas, happy Hanukkah and tranquil Dhul-Hijjah to all of you.
Oil of course is the most valuable commodity on earth. The American Dollar is the most important currency. If the Euro is used as a new measurement of value for oil - it is very likely to produce a long term decrease in the value of the US Dollar.
the fear is that oil money has been propping up the US economy for years and a change to the euro will result in a world wide rush to ditch the $ and embrace the €
Things are getting urgent: sub-prime market goes down. I wish I had dollars to change them for gold. I doubted if this should go in the politics thread, but it seemed insolent... I pray fervently to be mistaken or naive.
You people are like the religious folk who knock on my door each and every Sunday to tell me the world is going to end each and every following Monday . . .
Sorry, Aero. I take the blame. I know this doesn't belong in this forum, unless you count the interest that the "Politics" thread awakened. Far from me to claim "End of the world"! It's that some people in my country is worried about dollar strength: our very lives depend on it.
I've been mystified for decades, as many economists, by the ability of the dollar to thrive in conditions that have ruined many less respectable economies. I'm no expert, but I cannot avoid to feel that the american "dollar economic bubble" is similar to the russian "one party power bubble".
Of course you're right. I posted a rather old article on this, mainly to show that your position is correct: it's been said for ages by many people.
However, no one foresaw russian collapse. I don't claim I've foresaw dollar vallue: I've already told I am one of the many that depend on its strength. I'm just curious if someone in the forum (which on the other hand is like 200 continuous posters and no economic think tank) have some thoughts on the issue, given the amount of smart people around.
Anyway, thanks for your comment, at least someone has an opinion on the matter. So far is one vote for dollar collapsing some time in the future, one against and two (if I can count nae and Carlos) undecided!
Last edited by Ciro Pabón on 20 Mar 2007, 15:13, edited 2 times in total.
Ciro, how about writing a letter to the Jews who own the US federal reserve and every other financial institute in the US Did you see that documentry posted on that Politics thread by one of the guys here. It is all about different businesses converting to the Euro and pissing US off big time lol...
No, miqui, I did not read it. Thanks, I will. Anyway, I share the skepticism of Aero about "big conspirations".
Simply put, USA is the largest consumer market in the world and this attracts a lot of investors. For decades, that has sufficed to balance the huge imbalance of payments the country has: the people that is eager to invest there brings in more money that the money americans spend and don't produce. This is a dangerous position: if the inflow of capitals dry, the economy is doomed, or at least (to take in account Aero observation) headed towards a large correction. The size of the "derivatives" market is so huge that is worrying, that's all what the articles I posted say, in essence.
I don't think anyone in the world has the power or the money to change that balance USA has mantained for a long time. THAT is what worries me: if there is a run on the dollar, nor the Federal Reserve nor the "Jews" that someone claimed own american stock market can do sh*t. Anyway, thanks again, I will read it and post something.
Failure of the sub-prime mortgage sector is of limited importance. The wealth and stability of the world economy depends on foreign investment in the US economy. For the last 60 years - many countries in the world have massively invested in the US. No matter what sector of the US economy fails, these countries cannot withdraw their capital investments from the US - if they did - the world economy would retreat to the stonage overnight - it's a circular problem. Country A>Z invests in US so their money is safe. Country A>Z cannot withdraw their money without the financial world coming to an end. A perpetuating economic balance. Foreign governments often support the US Dollar in times of crisis, by investing thier own money and their accumulated US dollars - which are the result of successfully trading with the US - this includes such a problem as an oil crisis. This international support of the US usually extends for considerable periods - such as a 2>8 year collapse in the US consumer sector or even a long term US recession. It's all a matter of smoke and mirrors. Level upon level of financial devices and international self interest.Oddly - the US does not support the world economy. The world economy supports the US.
This is a generalization and a simplification.
The reason countries invest in the US economy is because of it's success. It has been the largest and most developed for, perhpas the last 200 years.
Petrodollars are the fuel for most of the most profitable "activities": illegal weapon commerce, terrorist financing and general illegal activities. As long as it remains so, the currency will be sustained, even if the sustainability of american national investments is doubtful.
That's what makes even grayer the "war on terror": if that was really the purpose of the american policy, they would be shooting their own foot.
And the USA are no longer the largest market in the world: the EU is.
I bet this would put a lot of urgency in FIA's quest to replace oil somehow.
If you wish to understand why, in my humble opinion, this seems important, here is a rather old article on the subject, that I believe is one of the more or less balanced I've read. At least is hard to accuse the american Navy of harboring wacko conspiration theories (or perhaps it isn't?). Anyway, it gives some hints on the impact this news could have. I quote:
"A switch to euros for oil trading will not happen in my lifetime...governments can make any statements they want, but that's commerce."
Bruce Misamore, Chief Financial Officer, Yukos
Russia has hinted several times that is considering the same move as the iranians. I am sure that USA have to retaliate somehow, given the current political scenario.
Time might be ticking: stability in Saudi Arabia is becoming more and more important and everybody knows that... As Fark says, EVERYBODY PANIC!
Merry Christmas, happy Hanukkah and tranquil Dhul-Hijjah to all of you.
My friend... why do you think the Americans are in Iraq?
In the autumn of 2000 Saddam Hussein converted the oil currency in Iraq from US dollars to Euros... and netted good profits in the process as the dollar slid badly versus the euro (not a coincidence either).
Anyway, after the invasion... when oil was ready to be sold...
The tender, for which bids are due by June 10, switches the transaction back to dollars - the international currency of oil sales - despite the greenback's recent fall in value. Saddam Hussein in 2000 insisted Iraq's oil be sold for euros, a political move, but one that improved Iraq's recent earnings thanks to the rise in the value of the euro against the dollar.
Yeap... I guess we know who is running the Iraqi oil operation... it certainly ain't the Iraqis anyway.
Here's an interesting tidbit, projected production. http://dieoff.org/42Countries/42Countries.htm
Just check out Iraq, someone (guess who?) is going to pump that country dry. Then we should finally see the withdrawl of US troops around 2040.
It's actually scary to imagine what will happen around 2040 when the international oil supply becomes to wind down.
You are right Dave, Iraq's graph looks healthier compared to other countries and has potential to be worked on! Saudi Arabia looks similar but thats already under wraps and same with the UAE!
What are your comments on the Corn, Oil and Wine thing shown in that documentry
discuss politics and such here, but thought I'd give an abridgement of what my thoughts on a couple of themes here have evolved into thus far. Perhaps some perspectives that haven't been touched upon yet among them.
As for conspiracies and conspiratorial behaviour, I think some of the main forces driving those, considering what a potential instigator/perpetrator/participant of such an activity engages in, are laziness and a lack of imagination, even more so than destructive selfishness and cynicism. Covert activity and its social spheres can appear as an "energy efficient" means to various individually profitable and beneficial ends, whomever might suffer in the process. In reality, as I believe history invariably shows, secret military accords, cartels and such have invariably ended in unpredictable and eventually costly outcomes - especially compared to other approaches.
I'm not in any way suggesting that, from time to time, conspiracies wouldn't shape events. And sometimes people have apparent common interests that don't need to be uttered to be acted in unison upon. My view is just that logically there's nothing that makes the effort of operating in this World overtly and positively in any way disadvantaged to the forces of willfully and unfairly privileged actions, the latter with or without ulterior motives. On the contrary. In short, I just find conspiracies boring. (Applies to F1, too, btw.) I believe we can work for societies, though, that by nature are far more resistant and less conducive to conspiracies and conspiratorialism by default, without concerning ourselves overly by what the individual acts of conspiracy might be at any one time. Now, there's a challenge.
As what comes to the "pumping Iraq dry scenario", look beyond the noise of religious extremism, ideologies and nationalism. Oversimplify a bit and consider economical prowess and wealth generation as the sole motivators behind recent actions, for all involved. Consider Iranian, Saudi, Venezuelan, Russian, Turkmenistani, US etc. political and business leaders, the companies, families and individuals that share stakes in all these countries and what they might be willing to pay in return for the priviledge of financing national leaders that are, let's call it, "willing to be financed" and empowered. At least in the short to medium term, oil production in Iraq has waned and a persisting instability about supply routes for the eastern Middle East and Caucasus has been instilled throughout the region. It is well documented that the so called "neocons" in the US and their international friends have had designs for Iraq for far longer than what the present administration spans.
A certain level of crude oil prices has been achieved, mostly as a result of the upheavals and tragedies that have befallen Iraq. Oil comes in many different compositions. The best wells by far, when it comes to the cost of refining, are located in the Middle East area and the North Sea. Nevertheless, even the most sulphur rich and viscous sludges there and elsewhere are generally included in the total reserves stated. As the best and most accessible fields start to peak, there are less profits to be made out of the remaining unutilized stocks. Unless something that drives prices up, before the fact, makes up for the coming investments and keeps the margins at comfortable levels to maintain the status quo otherwise.
Limiting the access (edit: I first wrote "supply", which didn't convey the idea correctly) to the best wells has, raising the prices over $50 a barrel, made developing inferior fields and more complicated supply routes and refining operations in Siberia, Africa, Caucasus, the rest of the Mideast and Central America economically viable. And the Saudi operations' profits absolutely stellar. Maybe turning off a tab or two has been considered more advantageous for now, among other considerations about military action in the area (which I won't go into here, since I'm supposed to be doing something more mundane with my life than going on about this anyway). Less is more.
All this with a finite resource we can't rely on anyway since we really can't afford changing the atmospheric composition anyway. Oil has never been a free market commodity, despite being "openly traded" - if it was, it propably wouldn't have stood this far as the dominant energy source against more decentralized ways of developing, producing, distributing and using other commodities in the energy chain. The trouble for many powers that be remains that being more efficient, sustainable and logical instead of these pyramidical structures will deprave them of their muscle, perks and status.
Which comes back to my point of unpredictable and costly outcomes of certain actions.
I pray fervently to be mistaken or naive. 
