Re: The dollar and oil

Dave B & Dave S:

Another section from below noted:

"The dollar accounts for more than two thirds of all central bank reserves 
worldwide because all international oil transactions have to be in US Dollars. 
This reserve status creates a constant demand for dollars, despite the 
underlying weakness of the U.S. economy. Hence, central banks are willing to 
overlook the massive trade and budget deficits are expanding with on-the-books 
Federal debt at record highs over 9 trillion and a fiscal gap estimated at $72 
trillion. 

But the United States is an economy on life support and nearing default, 
ravaged by agreements like NAFTA, CAFTA, and MFN trade status with China (all 
under the auspices of the WTO). The industrial and machine tools factories in 
America have been eviscerated, with Ford posting a quarterly loss of 

1. 2 billion. GM posted a quarterly loss of $325 million and both companies had 
their bonds cut to junk status back in 2005. 

Ravaged by capital flight, mired in debt, and borrowing $2 billion a day just 
to stay afloat, the U.S. economy is increasingly reliant on this petrodollar 
reserve status. The vast size of U.S. liabilities means that any threat to the 
dollar hegemony could result in a rapid currency collapse, sinking the world 
into recession. Hence the dire threat of the Iranian Oil Bourse, which may put 
an end to the fiat currency charade that began after the US defaulted on its 
gold payments in 1971."

 
Even though the religious crazies might desire the collapse of the U.S. economy 
by thwarting the dollar it might occur to them that when the U.S. dollar and 
economy collapses theirs will too.  This might be one reason that Iran has 
postponed the Iranian oil bourse for at least two months--pondering a possible 
desperate U.S. nuclear strike if the bourse opens.

Byron

  ----- Original Message ----- 
  From: balmer_dave 
  To: WSM_Forum@xxxxxxxxxxxxxxx 
  Sent: Monday, July 31, 2006 1:08 PM
  Subject: [WSM_Forum] The dollar and oil


  From an amazingly candid quote from a bush neocon;

  "Taking on the Bush administration with a possible nuclear threat to 
  Israel is a seriously dangerous policy whose end-game may well end 
  up in war. If Iran wants also to seriously threaten the dollar's 
  position as a dominant foreign reserve currency, a war becomes 
  almost certain. The Iranian oil bourse may never be mentioned by 
  U.S. policymakers as a official reason the United States decides to 
  go to war with Iran, but it may end up being the straw that broke 
  the camel's back."

  Jerome R. Corsi received a Ph.D. from Harvard University in 
  political science in 1972 and has written many books and articles, 
  including co-authoring with John O'Neill the No. 1 New York Times 
  best-seller, "Unfit for Command: Swift Boat Veterans Speak Out 
  Against John Kerry.

  also of some interest recently found in connection;

  http://www.niburu.nl/index.php?showarticle.php?articleID=13918

  --- In WSM_Forum@xxxxxxxxxxxxxxx, "bddanel" <bddanel@...> wrote:
  >
  > David S:
  > 
  > I didn't mean to imply that the oil/dollar connection was a 
  conspiracy. It is fully out in the open, it just isn't much 
  publicized. As for a definitive conclusive set of facts about this 
  connection, I doubt if anybody can come up with anything that 
  encompassing. This still doesn't mean that there isn't some truth 
  in the dollar/oil connection. 
  > 
  > I didn't mean to imply that my two references were carved-in-
  granite fact, but they at least seem plausible, even if not 
  exhaustive. After all, most of our arguments for socialism would 
  seem to be plausible, but not exhaustive. We just happen to have a 
  long laundry list of reasons why capitalism doesn't seem sensible. 
  The judgment by the populace as to when capitalism must be 
  jettisoned is just that--a judgment call.
  > 
  > Byron
  > ----- Original Message ----- 
  > From: David Searles 
  > To: WSM_Forum@xxxxxxxxxxxxxxx 
  > Sent: Monday, July 31, 2006 6:51 AM
  > Subject: [WSM_Forum] Re: (unknown)
  > 
  > 
  > Not being totally wrong is not reason to adopt the rationale for 
  > their conclusions. A single member of Congress talking in the 
  > middle of the night to a C-span camera, as if there is any 
  > credibility to that whatsoever and then the second guy quoting 
  it. 
  > What the hell are we looking under the beds for these 
  conspiracies 
  > for, as if we are in the select know who really knows what is 
  going 
  > on. 
  > 
  > Further, what is the basis for the conclusion that "this money 
  was 
  > only used to purchase oil the U.S. treasury only has to 'print' 
  > (i.e., issue credit in dollars) more." 
  > 
  > Don't the oil suppliers get to spend the money, doesn't it go 
  into 
  > circulation? 
  > 
  > Unsupported suppositions can support anything at all. I ask you 
  > what do we need them for. Even if it had a grain of truth true 
  why 
  > would we even give a wit about the "tremendous financial 
  advantage" 
  > to the US of oil being priced in $ US. If OPEC required payment 
  in 
  > Euros as opposed to preferring $ US, would it sell more oil? I 
  > think that the OPEC members have pretty much settled on that 
  they 
  > can sell more by choosing to receive $ US - after all it's the 
  > currency of their largest customer. 
  > 
  > It has yet to be demonstrated that this is a "tremendous 
  financial 
  > advantage" at all. In my previous post I cited the article where 
  > both the German and Japanese governments were opposed to the use 
  of 
  > their own currency for oil purchases. Why is that? Couldn't they 
  > see the tremendous financial advantage?
  > 
  > Discsussion is fine but we need to get serious about what we put 
  out 
  > there as fact. We should know what we are talking about or shut 
  > up. And of course that applies especially to me.
  > 
  > dave searles
  > 
  > 
  > --- In WSM_Forum@xxxxxxxxxxxxxxx, "bddanel" <bddanel@> wrote:
  > >
  > > Dave S:
  > > 
  > > Since this money was only used to purchase oil the U.S. 
  treasury 
  > only has to "print" (i.e., issue credit in dollars) more. I 
  don't 
  > think that the authors of the two sites cited can be totally 
  wrong.
  > > 
  > > Byron
  > > ----- Original Message ----- 
  > > From: David Searles 
  > > To: WSM_Forum@xxxxxxxxxxxxxxx 
  > > Sent: Sunday, July 30, 2006 9:31 PM
  > > Subject: [WSM_Forum] Re: (unknown)
  > > 
  > > 
  > > In 1973 OPEC crude sold for about $2.50 per barrel 
  > > http://www.wtrg.com/oil_graphs/crudeoilprice7381.gif 30 years 
  > later 
  > > the price is about $68.
  > > 
  > > In 1973 OPEC was selling about 30 Gb per year (thousand 
  million 
  > > barrels per year. Now it sells about the same. 
  > > 
  > > During the 1973 OPEC was taking in about $75 thousand million 
  a 
  > > year ($2.5 x 30 thousand million) now it takes in about $2040 
  > > thousand million ($68 x 30 thousand million) 
  > > 
  > > From 1973 to the mid 00s OPEC is taking in 2720 % more $ US 
  per 
  > year
  > > 
  > > But the US currency (bills, coins, traveler's checks, demand 
  > > deposits and other checkable deposits) during that same time 
  > only 
  > > rose from $288.4 thousand million to 1382.2 thousand million 
  or 
  > a 
  > > rise of 479 %.
  > > 
  > > So how can it be that US currency is backed by oil? And if the 
  > > purchase of all of that oil takes US money out of circulation 
  > how is 
  > > it that the world can buy in dollar amounts 27 times in oil in 
  > 2006 
  > > than it did in 1973 with less than 5 times as much US currency?
  > > 
  > > I think that our model of currency is wrong or at least 
  outdated 
  > > when we think in terms of it being "backed" by anything. It 
  > ain't.
  > > 
  > > dave searles
  > > 
  > > --- In WSM_Forum@xxxxxxxxxxxxxxx, "bddanel" <bddanel@> wrote:
  > > >
  > > > Dave S:
  > > > 
  > > > The volume oil transactions forces dollars to be taken out 
  of 
  > > circulation and put into dollar denominated accounts for the 
  > sole 
  > > purpose of oil purchases. When these countries started to use 
  > the 
  > > Euro they exchanged their dollars (from their oil accounts) 
  for 
  > > Euros which increased the dollar supply in the U.S. with 
  > expectant 
  > > results. See the latter two sites I referred to:
  > > > 
  > > > http://www.trinicenter.com/oops/iraqeuro.html and
  > > > 
  > > > 
  > > > 
  > > > 
  > http://www.newsmax.com/archives/articles/2004/12/6/211118.shtml 
  > > > 
  > > > 
  > > > 
  > > > And while I'm at it don't forget the great and humorous 
  > account 
  > > that Robert Newman gives at: 
  > > http://www.indybay.org/uploads/history_of_oil.ram 
  > > > 
  > > > 
  > > > 
  > > > Byron
  > > > 
  > > > ----- Original Message ----- 
  > > > From: David Searles 
  > > > To: WSM_Forum@xxxxxxxxxxxxxxx 
  > > > Sent: Sunday, July 30, 2006 3:04 PM
  > > > Subject: [WSM_Forum] (unknown)
  > > > 
  > > > 
  > > > Oh yes, I did forget to add the non-US OPEC purchases into 
  my 
  > > > calualtions. My bad. I'll have to re-do them. However the 
  > > > assumption seems to be that money spent on oil is out of 
  > > > circulation. I don't see that.
  > > > 
  > > > I haven't been able to get to a library on this, but it does 
  > > seem 
  > > > that my inital hunch that OPEC did not require payments in 
  the 
  > > US $, 
  > > > just that the pricing was to be in US $. An interesting 
  > article 
  > > at:
  > > > 
  > > > http://www.mees.com/postedarticles/oped/a47n01d02.htm
  > > > 
  > > > talks about when the value of the dollar fell that some 
  > > purchasers 
  > > > contracted in the German Mark and the Japaneese Yen - 
  opposed 
  > by 
  > > the 
  > > > German and Japaneese Govts. Why do you suppose that they 
  > opposed 
  > > > this? Didn't they want their currencies to be backed by oil? 
  > > When 
  > > > the dollar rose again this was dropped and they went back to 
  > > > contracting in US $. Any country can require payment in any 
  > > > currency that they want. But what do they ask for? And why? 
  Oh 
  > > > that's right, they ask for the dollar becuase as the current 
  > > chicken 
  > > > littles cry that Geopge Bush will invade them just like he 
  > > invaded 
  > > > Iraq becuase Sadam wanted to be paid in Euros, as if he 
  > wouldn't 
  > > > have snatched up any dollar that he could have gotten his 
  > hands 
  > > on.
  > > > 
  > > > Bucketless in Vermont
  > > > dave searles
  > > > 
  > > > --- In WSM_Forum@xxxxxxxxxxxxxxx, "balmer_dave" 
  <balmer_dave@> 
  > > > wrote:
  > > > >
  > > > > Thats was absolutely fantastic Byron, a must watch.
  > > > > 
  > > > > 
  > > > > --- In WSM_Forum@xxxxxxxxxxxxxxx, "bddanel" <bddanel@> 
  wrote:
  > > > > >
  > > > > > Dave S:
  > > > > > 
  > > > > > Even though the U.S. purchase of Arab oil is only $100 
  > > billion, 
  > > > > other OPEC transactions are also done in dollars as per 
  > > > agreement. 
  > > > > This puts far more than $100 billion out of circulation--
  > akin 
  > > to 
  > > > > Salvadore Dali's magic checkbook as portrayed in Robert 
  > > > > Newman's "History of Oil." One can view this at: 
  > > > > 
  > > > > http://www.indybay.org/uploads/history_of_oil.ram 
  > > > > > 
  > > > > > Byron
  > > > > > ----- Original Message ----- 
  > > > > > From: David Searles 
  > > > > > To: WSM_Forum@xxxxxxxxxxxxxxx 
  > > > > > Sent: Saturday, July 29, 2006 5:33 PM
  > > > > > Subject: [WSM_Forum] Re: Tremendous Financial Benefits 
  for 
  > > the 
  > > > > United States
  > > > > > 
  > > > > > 
  > > > > > dave b. don't belive everything you read: Any member of 
  > the 
  > > US 
  > > > > > Congress can insert anything they want into the 
  > > Congressional 
  > > > > > Record, and as more and more people who watch C-span 
  > realize 
  > > > > there 
  > > > > > actually are scarce few debates or speeches given in the 
  > US 
  > > > > House 
  > > > > > except to an empty chamber with a televsion camera and 
  the 
  > > > > single 
  > > > > > member speaking. (Under the rules of Congress the camera 
  > is 
  > > > > > forbidden to scan the chamber becuase poeple would 
  realize 
  > > > that 
  > > > > the 
  > > > > > person speaking isn't talking to anyone except the 
  > camera.) 
  > > > > There 
  > > > > > is simply no credibility to anything that a member of 
  > > Congress 
  > > > > has 
  > > > > > inserted into the Congressional record.
  > > > > > 
  > > > > > Also, how does expressing the price of oil in US dollars 
  > in 
  > > > > anyway 
  > > > > > back up the dollar with oil? The notion doesn't make 
  much 
  > > > sense 
  > > > > at 
  > > > > > all. You could see the dollar having a little more 
  demand 
  > if 
  > > > all 
  > > > > > oil had to be paid for in US dollars, but that simply is 
  > not 
  > > > the 
  > > > > > case. The entire yearly OPEC price tag for the US in 
  2005 
  > > was 
  > > > > about 
  > > > > > $ 100 billion (thousand million). 2 trillion (million 
  > > million) 
  > > > > > gallons at about $50 per barrel
  > > > > > 
  > > > > > 
  > > > > 
  > > > 
  > > 
  > 
  http://tonto.eia.doe.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbb
  > > > > > l_a.htm
  > > > > > 
  > > > > > compare that to the amount of the US M3 money supply of 
  $9 
  > > > > trillion
  > > > > > 
  > > > > > 
  > > http://www.frbsf.org/education/activities/drecon/2004/0404.html
  > > > > > 
  > > > > > and also given the fact that oil is paid for on a daily 
  > not 
  > > > > yearly 
  > > > > > basis. Any possible effect of expressing the price of 
  oil 
  > in 
  > > > US 
  > > > > $ 
  > > > > > seems nil. It seems a certainty that there would no 
  > > tremedous 
  > > > > > advantage to anyone by this arrangement.
  > > > > > 
  > > > > > As to an agreement to protect the OPEC counties from 
  > having 
  > > > > their 
  > > > > > regimes brought down, I guess that the US did do so hot 
  of 
  > a 
  > > > job 
  > > > > > with Venezuala or Iraq. Maybe there ws some agreement 
  > > > somewhere 
  > > > > I 
  > > > > > haven't been able to find it, have you? 
  > > > > > 
  > > > > > --- In WSM_Forum@xxxxxxxxxxxxxxx, "balmer_dave" 
  > > <balmer_dave@> 
  > > > > > wrote:
  > > > > > >
  > > > > > > Materialistic determinism, follow the money.
  > > > > > > 
  > > > > > > "elite money managers, with especially strong support 
  > from 
  > > > > U.S. 
  > > > > > > authorities, struck an agreement with OPEC to price 
  oil 
  > in 
  > > > > U.S. 
  > > > > > > dollars exclusively for all worldwide transactions. 
  This 
  > > > gave 
  > > > > the 
  > > > > > > dollar a special place among world currencies and in 
  > > > > > > essence "backed" the dollar with oil. In return, the 
  > U.S. 
  > > > > promised 
  > > > > > > to protect the various oil-rich kingdoms in the 
  Persian 
  > > Gulf 
  > > > > > against 
  > > > > > > threat of invasion or domestic coup. This arrangement 
  > > helped 
  > > > > > ignite 
  > > > > > > the radical Islamic movement among those who resented 
  > our 
  > > > > > influence 
  > > > > > > in the region. The arrangement gave the dollar 
  > artificial 
  > > > > > strength, 
  > > > > > > with tremendous financial benefits for the United 
  > States."
  > > > > > > 
  > > > > > > by Hon. Ron Paul of Texas, Republican Congressman 
  > > > > > > 
  > > > > > > http://www.energybulletin.net/12987.html
  > > > > > > 
  > > > > > > and also
  > > > > > > 
  > > > > > > 
  http://www.informationclearinghouse.info/article12346.htm
  > > > > > >
  > > > > > 
  > > > > > 
  > > > > > 
  > > > > > 
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