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 ...
Hmmm. I've always thought the war in Iraq was to depose an extremely dangerous despot and complete the encirclement of Iran.
This article sounds like it was written by a 7th grader.
No, supply and demand sets the prices in a free market.
If we could drill in alaska, the arabs would be fighting with each other to sell us oil cheaper.
Assuming it's true, what is the harm in a US dollar hegemony?
Unless you are a traitor liberal?
GET YOUR CHANTS STRAIGHT!
It is "Blood for Oil" not "War for Oil"!
I am only kidding...personally, I admit that I can't take the time to comment intelligently on the substance of this article, since I have never even taken an economics course.
On the other hand, when I see a phrase like "...US essentially owns the world's oil for free..." it makes me think the person who wrote it is using a lot of words to cover up the fact that THEY know nothing about it either!
Huh? When the government prints more money it is a weak-dollar policy. More dollar bills = each one worth less in real terms = weak dollar.
"If we could drill in alaska, the arabs would be fighting with each other to sell us oil cheaper."
Makes sense to me!
I'll bite -- what's WRONG with going to war for oil? Modern civilization can't exist without it, and if its market supply were to be abruptly disturbed or curtailed, tens or even hundreds of millions would starve to death.
Sorry, no refund.
What's wrong with not being pc?
And, just for the record, I'm not him
What did you think of 'your' piece?
I guess in my haste to disspell rumors of 'war for oil' I completely overlooked that.
I have seen some horrible stories about Saddam's prisons yet the media are still burbling about Abu Ghraib.
This website links to
http://www.ratical.org/rat_haus.html
Which posts an article by Ward Churchill
Oh no, not that maggot!
BS
I'm not picking on you, I alway trace links to see where they lead.
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