InyaAzz Posted October 7, 2009 Report Share Posted October 7, 2009 Well you should have diversified your bonds n1gga! Quote Link to comment Share on other sites More sharing options...
shittygsxr Posted October 7, 2009 Report Share Posted October 7, 2009 Well you should have diversified your bonds n1gga!You should know that i am diversified when China takes over I am going own half that biatch Quote Link to comment Share on other sites More sharing options...
Todd#43 Posted October 7, 2009 Report Share Posted October 7, 2009 It NEVER should have been based on the dollar to begin with!^------ +1So, we've discussed where our oil comes from, why ethanol isn't a great alternative, and the mexico song, but I still haven't seen an answer from either of you as to why purchasing oil should NEVER have been based on the dollar to begin with.Seriously, do either of you have an answer? Quote Link to comment Share on other sites More sharing options...
InyaAzz Posted October 7, 2009 Report Share Posted October 7, 2009 You should know that i am diversified when China takes over I am going own half that biatchJust remember your good buddy when it happens. Quote Link to comment Share on other sites More sharing options...
shittygsxr Posted October 7, 2009 Report Share Posted October 7, 2009 So, we've discussed where our oil comes from, why ethanol isn't a great alternative, and the mexico song, but I still haven't seen an answer from either of you as to why purchasing oil should NEVER have been based on the dollar to begin with.Seriously, do either of you have an answer?Oil (variable) = Dollar (variable) <= The value of everything is variable to some extent, but some assets are more reliable than others. For a long time the dollar was about the most stable asset available, so it was easier to deal with. Now when the price of oil goes from $70 a barrel to $75 a barrel you have to figure out if demand for oil went up or if the US Govt pissed away a trillion dollars and the value of the dollar just dropped. Quote Link to comment Share on other sites More sharing options...
Disclaimer Posted October 7, 2009 Report Share Posted October 7, 2009 (edited) So, we've discussed where our oil comes from, why ethanol isn't a great alternative, and the mexico song, but I still haven't seen an answer from either of you as to why purchasing oil should NEVER have been based on the dollar to begin with.Seriously, do either of you have an answer?Why should it be based on the dollar over any other currency?Shitty pretty much noted the important parts. There is no "standard" asset at which our currency is tied to, and the some of the variations on the value of the dollar are influenced purely on speculation.Here - I found an article. Yes, it's from a "blog", but the links are the background information:What if oil weren't priced in dollars?http://curiouscapitalist.blogs.time.com/2009/10/06/what-if-oil-werent-priced-in-dollars/Robert Fisk's report in the Independent that the Persian Gulf countries are planning to stop pricing oil in dollars by 2018 and start using a basket of currencies instead has caused quite the big stir today. Gold hit a new record of $1,043 an ounce as investors worried about the future of the dollar, and the Internets were aflame with the news (especially the right-wing Internets, apparently.) Saudi and Kuwaiti officials immediately said there's no such move in the offing, but it's obviously something they've been thinking about. Just under two years ago there was a big flurry of discussion on the subject, including an OPEC vote to study switching to a currency basket. If the Gulf countries stopped pricing oil in dollars, they would also presumably stop pegging their currencies to the dollar, a more significant development. And of course Chinese officials have been making noise for several years about the need to move away from a dollar-dominated world. The problem that both China and the oil exporters have is that they're holding gigantic stashes of dollars that would suddenly be worth a lot less if they started trying to sell them off. So we've got this impasse, where lots of people complain about the dollar's supremacy but nobody seems willing to do anything about it. In fact, a succession of U.S. Treasury Secretaries has trooped to Beijing trying to persuade the Chinese to do something about the dollar's supremacy by letting the yuan float or at least rise sharply against the dollar, and met with strong resistance. It's the sense that this can't go on forever that keeps putting downward pressure on the dollar. And this shouldn't go on forever. The U.S. economy's share of global economic output has been declining and will almost certainly continue to decline as formerly poor countries get richer. With that, the dollar's role will need to change. Such a change wouldn't be unmitigated bad news for Americans. As I've written before, having the dollar as the world's currency has been a mixed blessing. The dollar's global role inflates its value, for example, which makes imports cheaper for consumers here but also makes U.S products less competitive globally. Dollar supremacy also allows the U.S. government (and until recently the private sector) to get away with wildly unbalanced budgets without paying an immediate penalty in higher interest rates, which can be nice for a while but tends to end in trouble. The global capital-flow imbalances that many economists now say were at the root of the financial crisis are in significant part a product of the dollar's outsized role. All of this means that it may well be in the long-run best interest of the U.S. to push for an orderly transition away from the current dollar-based global monetary system and toward one built around currency baskets, the International Monetary Fund's special drawing rights, the bancor, gold or whatever other measure of value we can all agree on. In other words, it's not the worst news in the world that the Persian Gulf countries are talking about moving away from the dollar. Even if they say they aren't. Update: As jomiku notes in the comments, Fisk has something of an agenda. He is also a hardworking reporter, and this particular article strikes me as mostly credible, even if his follow-up column in Wednesday's paper is mostly incomprehensible. Any change being planned for 2018 is going to be awfully tentative, though, and the part in Fisk's original article about the dollar not being part of the currency basket in which oil will be priced is probably nonsense. Edited October 7, 2009 by JRMMiii Quote Link to comment Share on other sites More sharing options...
jporter12 Posted October 7, 2009 Report Share Posted October 7, 2009 What is the US dollar backed by? TRUST. Nothing tangible. As that trust weakens, so does the dollar that is based on it. As the Fed prints more money, and the US gets further into debt, that trust is diminished. Nobody wants to trust that person that's always looking to borrow a buck, do they? Quote Link to comment Share on other sites More sharing options...
jporter12 Posted October 7, 2009 Report Share Posted October 7, 2009 +1. (sad face)Will you loan me a few $$$ for lunch? Quote Link to comment Share on other sites More sharing options...
Todd#43 Posted October 7, 2009 Report Share Posted October 7, 2009 Why should it be based on the dollar over any other currency?Shitty pretty much noted the important parts. There is no "standard" asset at which our currency is tied to, and the some of the variations on the value of the dollar are influenced purely on speculation.As Shitty also pointed out, the dollar was the most stable currency for a number of years, and the US was the largest economy in the world, hence the "world economy" was based on the dollar.To my knowledge no other currencies are based on anything tangible either. As such, you're not eliminating the "problem" (of a currency based on nothing tangible) by going to something else.Here - I found an article. Yes, it's from a "blog", but the links are the background information:What if oil weren't priced in dollars?http://curiouscapitalist.blogs.time.com/2009/10/06/what-if-oil-werent-priced-in-dollars/Well, at least it wasn't from KOS, Justin Actually, the author makes some good points but asks just as many questions as he answers. To change the currency that oil is traded in would certainly devalue the dollar even further. As we all know this is terrible for consumers in the US as our buying power for oil (and other imported goods) is further reduced. The move would also artificially "inflate" whatever "currency" or "blend of currencies" they ultimately go to. This also has the potential to further reduce the dollar's value in the international market, and will also increase costs to the consumer.Further into the article the author seems to advocate a "global currency" or world money. I find this to be problematic on many issues that go beyond economic implications.Finally, many countries that we buy from are sitting on large sums of dollars that would also be severely devalued if they progress to another currency for commodity purchases. I can't see them being too happy about it. Is this going to happen? Who knows. I mean we're still 10+ years away from it happening. However, if we start to see Saudi Arabia, China, and other large holders of dollars have a wholesale sell-off of US currency it would be a pretty good indicator of what lies ahead.What is the US dollar backed by? TRUST. Nothing tangible. As that trust weakens, so does the dollar that is based on it. As the Fed prints more money, and the US gets further into debt, that trust is diminished. Nobody wants to trust that person that's always looking to borrow a buck, do they?Again, the dollar is like other currencies in that respect, and its nothing new. The bigger issue is the fact that our (US) output continues to shrink as a portion of the world's production. As other emerging countries continue to develop (China, India), and as the US continues to make it more difficult to do business here our role on the world stage will continue to diminish. When you combine this with the increase in the National Debt its not too hard to see why we are losing our dominance.Good answers from both of you in terms of "why" these countries may be looking to base the price on something besides the dollar now, but I still fail to see why oil should never have been traded in Dollars in the first place. Quote Link to comment Share on other sites More sharing options...
Kahooli Posted October 7, 2009 Report Share Posted October 7, 2009 I would trade my dollars for oil right now. All of my dollars. At least oil is tangible and has value.Buy guns. Guns never lose their inherent value ^.^ (the value of protecting yourself, or rebelling against an oppressive government) Quote Link to comment Share on other sites More sharing options...
InyaAzz Posted October 7, 2009 Report Share Posted October 7, 2009 The discussion is educational..but again..another story based on rumors, with no validity to it( so far).This is what happens when it gets cold outside. Quote Link to comment Share on other sites More sharing options...
Todd#43 Posted October 7, 2009 Report Share Posted October 7, 2009 The discussion is educational..but again..another story based on rumors, with no validity to it( so far).This is what happens when it gets cold outside.Many discussions involve "speculation" and "what if's". That's how people decide WHAT to do and WHEN to do it.Closing the barn door AFTER the horse runs away is kind of pointless, no? Quote Link to comment Share on other sites More sharing options...
Disclaimer Posted October 7, 2009 Report Share Posted October 7, 2009 How sure are you that what ran out of the barn was a horse? Or you even had a horse there to begin with? Quote Link to comment Share on other sites More sharing options...
shittygsxr Posted October 7, 2009 Report Share Posted October 7, 2009 Even if China becomes the worlds super power it does not mean that there gov't is stable. Switzerland is a small country but they are very stable so their banks hold very large fortunes. Our dollar was held up by many foreign investors too scared to invest in their own markets. So if you want to look at this from a "half-full" perspective the rest of the world is stabilizing Quote Link to comment Share on other sites More sharing options...
Todd#43 Posted October 7, 2009 Report Share Posted October 7, 2009 How sure are you that what ran out of the barn was a horse? Or you even had a horse there to begin with?It was a metaphor, jack ass Quote Link to comment Share on other sites More sharing options...
InyaAzz Posted October 7, 2009 Report Share Posted October 7, 2009 Many discussions involve "speculation" and "what if's". That's how people decide WHAT to do and WHEN to do it.Closing the barn door AFTER the horse runs away is kind of pointless, no?I'm not debating this. I simply stated a fact. Nothing to see here. Quote Link to comment Share on other sites More sharing options...
Disclaimer Posted October 7, 2009 Report Share Posted October 7, 2009 WHAT HAPPENED TO THE HORSE!? I must know.... Quote Link to comment Share on other sites More sharing options...
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