Iran draws line in sand and threatens the US

[flavio]

We went off the gold standard about 2 decades ago Cat. It's not an oil standard now as some would like to hint at.

and there was massive inflation through the 70's.

 

[Winky]

The fact is the American taxpayer\comsumer
IS the backbone of the world economy.

The only thing backing up the world currency
(the American dollar, for those of you in Rio Linda & Flamio)
IS the belief that the Americans will wake up this morning and keep on keeping on.

Oh and the American taxpayer\comsumer\dollar

what 'backs' that up you ask?

 

[chcr]

and there was massive inflation through the 70's.

I was there, flav. Yep, uh-huh, it destroyed the US economy...

Note that after leaving high school in '74 I was never unemployed and never had any trouble paying rent. I did drive by any gas station that was price gouging it at over 50¢ a gallon...

 

[flavio]

I was there, flav. Yep, uh-huh, it destroyed the US economy...

Note that after leaving high school in '74 I was never unemployed and never had any trouble paying rent. I did drive by any gas station that was price gouging it at over 50¢ a gallon...

So another 10 years of inflation on that level would be no big deal?

You don't find it odd in the least that right after the invasion Iraq was switched back to the dollar and all Euro contracts cancelled?

 

[Professur]

Actually, I find it suspicious that Iraq switched to the Euro and had under-the-table deals with countries using which currency??? And the countries that were all against the invasion of Iraq used which currency?

 

[chcr]

So another 10 years of inflation on that level would be no big deal?

You don't find it odd in the least that right after the invasion Iraq was switched back to the dollar and all Euro contracts cancelled?

You find that odd? I found that obvious. And indicative.

Oh, BTW, it didn't last ten years the first time.

 

[flavio]

but I'd still like to know...

I can't exactly figure out which things you're talking about. Let me know and I'll try to help.

So what IS the "story" supposed to be about, or convey Flav?
In 10 words or less.

I posted 3 articles, two of them pretty long. It's hard to imagine a brief explanation that would do it justice ...let alone 10 words.

I'll try though...

The US dollar has been the currency that can be used to buy oil beginning in the Nixon administration. Apparently this is similar to the gold backing situation but possibly far more valuable as we have a monopoly on the standard.

Other countries are forced to hold a certain number of US dollars. If the US prints more money and the dollar depreciates it creates a sort of tax or subsidy as they get less with their dollars. This goes a long way towards financing the US debt and trade deficit.

Iraq started taking Euro for oil, was contained with the Oil For Food program, and then invaded. 2 months later the Oil For Food program was gone and they were switch back to US dollars only.

Iran is slated to open it's Oil Bourse in March which is more dangerous than Iraq because it will allow anyone willing either to buy or to sell oil for Euro to transact on the exchange, thus circumventing the U.S. dollar altogether.

Hope that was brief enough.

I'm not sure that this is really the reason for the Iraq and Iran situation but it is certainly a very plausible theory. Certainly makes more sense than trumped up WMD claims, a "War on Terror" even though neither country supports bin Laden or could possibly be considered the center for terrorism, or nuclear energy programs.


This one alone addresses so many aspects of the situation that

 

[Winky]

Flamio,
tell me
how does one such as yourself get SO confused?

It certainly MUST be intentional as merely denying reality on a daily basis wouldn't be sufficient.

You must work overtime onnit? Right?

 

[flavio]

1. In case you haven't noticed, wikipedia is not an acceptable reference source.

I have noticed Gonz using it and commenting that it seemd to be an acceptable nuetral source for the forums. What have you noticed?

2. The limited understanding of world economics you can pick up from spending a few moments surfing the net probably doesn't qualify you to discuss them at length, but never mind that.

What is your point here and why would you assume all my understanding of economics has come from a few minutes on the net?

When we went off the gold standard, it was going to destroy the US economy. The strength of the deutschmark was going to destroy the US economy. The strength of the yen was going to destroy the US economy. The introduction of the euro was going to destroy the US economy. Iran changing their oil standard from dollars to euros is going to destroy the US economy.

Sense a pattern yet?

I'm sensing you think there isn't a single thing that ever has or ever will effect the US economy. A flat line that never fluctuates.

He's talking about the end of the gold standard? You mean the shit we did back in 1973? That's now supposed to relate to some sort of current threat?

Doesn't seem like you read before posting.

Actually, I find it suspicious that Iraq switched to the Euro and had under-the-table deals with countries using which currency?

I searched for the answer to that one and it looks like an Iraqi American was convicted and indicyments of a South Korean lobbyist, Texas oil tycoon Oscar Wyatt, David Chalmers of Bayoil Inc., Bulgarian oil trader Ludmil Dionissiev and two Swiss executives and their companies.

I'm not sure that they all use the same currency.

And the countries that were all against the invasion of Iraq used which currency?

Well most countries in the world didn't support the invasion...so again different currencies. But I'm sure countries using the Euro wouldn't be too excited about getting involved in an unnecessary war to keep the US dollar as the only petro-dollar.

 

[flavio]

Flamio,
tell me
how does one such as yourself get SO confused?

It certainly MUST be intentional as merely denying reality on a daily basis wouldn't be sufficient.

You must work overtime onnit? Right?

It's weird that this reality of yours that I'm denying is always vague and never supported by any facts whatsoever. Innit? Right?

If it was real it would seem like you'd at the very least mention what you thought I was confused about.

 

[Winky]

But I'm sure countries using the Euro
wouldn't be too excited about getting involved in an unnecessary war
to keep the US dollar as the only petro-dollar.

Why the Hell not?!?

 

[Winky]

It's weird that this reality of yours that I'm denying is always vague and never supported by any facts whatsoever. Innit? Right?

If it was real it would seem like you'd at the very least mention what you thought I was confused about.

and then I'd be talkin' to a Krazy person
trying to discuss reality and that would make me a Krazy person then the Krazy person would try to talk
to me about reality and the Krazy person would be the sane one and I'd be the Krazy person, then...

 

[chcr]

What is your point here and why would you assume all my understanding of economics has come from a few minutes on the net?

Because of the subsequent lack thereof. Switching off the gold standard contributed in a minor way to the inflation of the late seventies. There were other factors that contributed much more. This whole economic discussion has started to bore me though. I lived through it, you're cherry picking information that supports the point you wish to make. You've made it, I disagree. I could wish you didn't find it so offensive to be disagreed with, it makes the discussions less interesting.

One other point though, whether you believe it or not, everybody lives in their own little reality. Even me.

 

[Winky]

But cheeky I certainly hope you'd agree
that reality exists 'outside' and 'independently'
of those little dreamstate realities of which you spake?

 

[chcr]

But cheeky I certainly hope you'd agree
that reality exists 'outside' and 'independently'
of those little dreamstate realities of which you spake?

Sure it does, wink. You're just so wrapped up in your perceived one that you miss a lot of stuff that's really going on in the real one. Of course, none of that applies to me.

 

[Winky]

of course not!

 

[catocom]

I can't exactly which things you're talking about. Let me know and I'll try to help.

never mind man.

 

[Gonz]

But I'm sure countries using the Euro
wouldn't be too excited about getting involved in an unnecessary war
to keep the US dollar as the only petro-dollar.

Using that logic in 1919, Germany would have overthrown Europe.

Using that logic in 1938, Germany would have overthrown Europe.

We had no dog in either fight. We were not threatened. We could have built defenses & sat back & watched. Many many people thought that isolationism was in our best interest. Perhaps it would have been. I doubt it though. Sometimes ya just gotta stand up & fight, even if you don't wanna.

 

[flavio]

Because of the subsequent lack thereof.

Where's the lack of understanding? Remember I'm just trying to discuss theories here, not claiming absolutes.

Switching off the gold standard contributed in a minor way to the inflation of the late seventies. There were other factors that contributed much more.

It's hard to say what factors contributed the most. Certainly the sudden rise in oil prices was a big one.

The petro dollar has a lot of similarities to gold backed currency but also some major differences. For one the US has a monopoly where many countries have used a gold standard simultaneously.

I could wish you didn't find it so offensive to be disagreed with, it makes the discussions less interesting.

I don't find it offensive at all to be disagreed with. You started off with an insulting tone and I replied in the same way.

1st post:
"It will no doubt come as a surprise to you..."

2nd post:
"In case you haven't noticed..."

"The limited understanding of world economics you can pick up from spending a few moments surfing the net probably doesn't qualify you to discuss them at length..."

I agree it would be more interesting if we weren't doing that.

you're cherry picking information that supports the point you wish to make. You've made it, I disagree.

It's fine that you disagree but I'm not sure that you've made it clear why. You've said you don't see it having an effect and pointed out other things that haven't destroyed the economy.

Here's part of an article by someone who also disagrees...

The American government could simply be striving to maintain an evenness to its fiscal and monetary policies, while keeping deficit spending at home, by ensuring that the world continues its high demand for America's fiat dollars. Cheney and his puppet, Bush, could be engaging in strategic bullying in the mid-East in part to maintain the continuation of The American Way of Government. That is, of big government, fiat currency, deficit spending, and the like. Why they would prefer to spend trillions of dollars and go into increased debt merely to maintain certain terms in an oil bourse seems a bit weird. Could it be that they merely want to postpone a day of reckoning, have hyperinflation occur on a later administration's watch?* I see this theory as simply a variant of the Trade Deficit macro-worry obsession.

Within a context of a gold standard, the equilibration process to deal with trade deficits is not really much of a problem. That's why Austrians argue against trade deficit worries. Makes sense.

But in a fiat currency context, the equilibration process is made more cumbersome, allowing for a less even and more catastrophic reactions. All those American fiat dollars, and accounts denominated in dollars, if liquidated, would come home to America, and could cause quite a ruckus. Hyperinflation. And it would be pretty hard for the Fed to control it, because it can only control growth through the manipulation of certain interest rates, in collusion with the U.S. government. Even if it stop the printing presses (which is just a figurative way of describing what it actually does; in actuality the Fed's power to create money is not in the U.S. Treasury's printing office), the dollars returning home would be devaluing all dollars held at a fast clip.

 

[flavio]

Using that logic in 1919, Germany would have overthrown Europe.

Using that logic in 1938, Germany would have overthrown Europe.

I don't think the quote you used of mine relates to your Germany examples. The point of that quote was that a war to protect the US dollar as the oil standard wouldn't be in the interest of most Europen countries and might explain why they were reluctant to join a coalition. It would be better for them to be able to trade in Euros.