Posted on 12/06/2004 11:03:23 PM PST by ETERNAL WARMING
OPEC Dumps the Dollar NewsMax Wires Tuesday, Dec. 7, 2004 Quietly but with malice, OPEC cartel nations have been dumping the U.S. dollar over the past three years, according to the Bank for International Settlements (BIS).
The dollar has been falling dramatically in recent years -- reaching new lows against the Euro and other currencies. Story Continues Below
One key culprit may be OPEC states who have traditionally denominated their transactions in U.S. dollars -- but are now moving to the Euro in what the BIS says is a "subtle but noticeable" shift.
OPEC's actions may have been precipated by Sept. 11 and the Bush administation's "war on terrror" -- a war hotly opposed by almost all OPEC nations.
BIS data reveals that OPEC states have reduced their dollar deposits from 75 per cent in the third quarter of 2001 to 61.5 per cent today -- a fall of of some 13 percentage points.
"Since the third quarter of 2001, oil revenue seems to have been channeled increasingly into euro and other currency deposits," the bank said. "This shift out of U.S. dollars probably reflected to some extent the relative change in interest rates in the United States and the euro area since 1998."
The Financial Times also reported Monday that OPEC nations are also moving away from pricing oil in dollars.
The move away from the dollar could prove catastrophic for U.S. economic interests and bring to an end to more than a half century of dollar supremacy around the globe.
The FT suggested the shift by OPEC was due to "private Middle East investors" who are "worried about the prospect of US-held assets being frozen as part of the war on terror, leading to accelerated dollar-selling after the re-election of President George W. Bush."
Hans Redeker, global head of foreign exchange strategy at the French bank BNP Paribas, blamed the U.S. Patriot Act.
"If you trade with what the US regards as a 'dodgy' bank, you are at risk of your assets in the US being frozen," he said. "After the re-election of George Bush, the Middle East started to sell dollars like crazy due to the fears of assets being frozen."
The effect of the move away from the dollar has left the U.S. financial interests with a black eye.
Critics of the European Union have suggested that the introduction of the common currency known as the Euro was an effort to weaken the dollar's supremacy and to steal the OPEC account from the U.S. dollar.
These claims may be justified with the latest data from the Bank for International Settlements.
what effects? higher prices for euro goods? who cares. higher oil prices? they have been falling. our interest rates were going up anyway.
if we can break the yuan peg, this euro/dollar thing will level off.
the treasury knows who's buying and selling what, when, and through whom.
He obviously isn't a history Prof.
"He obviously isn't a history Prof."
He sure isn't.
Bump
Great idea!! What rate were you thinking? 60%? 70%?
I think the rate should be raised until the top 10% of taxpayers pay 66% of all taxes. Tax 'em till they squeal.
None of you really get it - do you.
In a "major crisis" Europe will surrender. I would like to ask the professor just how they are more advanced....probably in multi-cultural diversification.
Just more madness from academia..."
Wow -- I'll say it's "madness."
Aside from the delusional premise of your prof, the ignoramus is actually ROOTING for the U.S. to die every which way.
ping
He talked about their standard of living, morals (HA!)health care, and educational systems.
The first three are a joke.
I do see points about education...we don't put enough disciplined effort into our educational system overall...lowering of standards...etc...
Although their systems stink overall, they still treat education seriously. Would like to see some more emphasis on training for those that don't go on to college (vocational).
And yes, they would likely surrender...I agree.
This is from someone who went from an 8MPG Beast (Hooked up 85 Monte Carlo) and recently upraded to a more practical 15 MPG vehicle (ESCALADE!).
Gas prices aint high.
Cutting off most foreign aid would probably save a bundle, too.
Cutting of the UN's funding will go a long ways. Same with removing any aid sent to EURABIA and selling more weapons and wares to Taiwan, Israel, Japan, and South Korea.
And cut off non-essential government stuff, NEA and other socialistic agencies especially.
I see this as one more sign that the EU is on it's way to becoming the dominant world power.
Florida's Gulf coast is another good place to drill that the environmentalists have managed to keep off limits.
And I agree wholeheartedly with the suggestions to take an axe to the budget -- we could eliminate so much wasteful spending so quickly, and with majorities in the House and Senate, now is the time to strike. In addition to all of the good suggestions about eliminating a number of departments (and in particular, I like the idea of eliminating the Department of Education first), I would like to see the recent drug "benefit" rescinded.
Even if we didn't get out of the red in the first go-round, just getting the budget deficit down a bit would be great. Seeing the weight of a few unneeded departments also removed would be a gift to our posterity, contrary to the heavy burden of debt that we are presently laying on them.
Some scary economic figures you have posted there on your Home Page...
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