Posted on 01/13/2006 8:43:06 AM PST by Froufrou
"World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy. The world's interlinked economies no longer trade to capture a comparative advantage; they compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies. To prevent speculative and manipulative attacks on their currencies, the world's central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation...This phenomenon is known as dollar hegemony, which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil. The recycling of petro-dollars is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973.
"By definition, dollar reserves must be invested in US assets, creating a capital-accounts surplus for the US economy. Even after a year of sharp correction, US stock valuation is still at a 25-year high and trading at a 56 percent premium compared with emerging markets.
". . . The US capital-account surplus in turn finances the US trade deficit. Moreover, any asset, regardless of location, that is denominated in dollars is a US asset in essence. When oil is denominated in dollars through US state action and the dollar is a fiat currency, the US essentially owns the world's oil for free. And the more the US prints greenbacks, the higher the price of US assets will rise. Thus a strong-dollar policy gives the US a double win."
(Excerpt) Read more at ratical.org ...
Good grief. He's a windbag...and mostly wrong.
"When oil is denominated in dollars through US state action and the dollar is a fiat currency, the US essentially owns the world's oil for free."
Is it just me, or do any of you FReepers see how this is the antithesis of 'war for oil?'
Please, enlighten me. I never had the benefit of studying economics...
wow
Admitting you're not one of us are we?
No, any of 'you FReepers besides myself.'
I am no troll, McGruff. I was looking for a way to debunk Liberal rants about 'war for oil.'
I can see how a case can be made for his oversimplifying global economy - and I really disliked a piece I found by a guy named Dixon about the 'globalisation' of the world.
But, I hope what you're saying is that we had no need to go to war for oil because of the dollar being converted to 'fiat currency' [by Nixon circa 1973] -- ???
It's the Bilderburgers. Well, them and the Trilaterial c Commission.
I'm waiting for that to show up at the pump.
Me, too. And I was sick and tired of liberals telling me about Bush's lies.
I don't think you can take economics out of war. Do you?
That website ratical.org is located in San Francisco.
Would be happy to cut this thing to shreds if I had time. But the entire theory that this is a war for oil is ludicous. We could have more easily made Saddam an ally, not spent 100s of billions on the war, and had access (via dollars) to Iraq's reserves. This guy has about 5 conspiracy theories rolled into this piece. And not a single one is true.
Re-read the article and you will note the left leaning bias, despite the attempt to sound scholarly. And I recall no time in the last 30 years where a leftist comes anywhere near the truth.
Yeah, but remember that OPEC still sets the prices.
Oh, not the dreaded zot! I thought this was an honest presentation! Evidently, the truth is not to be had via the blogosphere...?
Someone lead me out of the henhouse, my feathers are gettin' plucked!
Eeek! Not to say the words "Trilateral Commission"! Ack! I just said it!
Sounds exactly like Cindy Sheehan. Think about it.
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