Open Question
I wathced an interesting presentation by Kevin Phillips, author of "Bad MOney:
reckless Finanace, Failed Politics, and Global Crisis for American Capitalism"
on CSPAN2's BookTV this morning...he really went far into detailing just how
deep the financial mess this country is in...but one of the most interesting
topics he discussed was the dollar and the price of oil...to keep it short, his
basic premise was that oil producers in the gulf supported our dollar and kept
oil prices low in doing so, as their faith in the dollar began to diminish, it
weakened, causing oil prices to go up. The cycle continues to spiral as oil
producers begin to hold fewer and fewer dollars. (He claims the oil producers
in the Middle East began this program in earnest after the invasion of Iraq,
which they saw as an attempt to break the control of OPEC on the oil
markets...the Bush Administration forecasted that they could increase Iraqi
output from 3 million to 6-7 million barrels a day, thus increasing supply and
keeping the price of oil artificially low. No need to explain what happened,
but they were wrong!)
Anyway, Phillips also stated that there is an "agreement" between Japan, Taiwan,
S. Korea and others to support the dollar in return for America basically
providing their defense for them. China of course has its own reason for
holding dollars (one being that if the US consumer economy collapses, theirs
would go along with it)...
Pre-invasion Iraq stopped accepting payment for its oil in dollars, preferring
Euros or yen...Iran and Venezuela has done the same...This has simply
intensified the dollar's weakness...
OK...the main point I want to make (sorry it took so long)...but Phillips went
on to question what will happen when the oil producers or east asian countries
decide to start dumping dollars? He speculated that one country will start a
cascade of selling by reckoning that it will be better to be first out of the
dollar than to be caught with their pants down and be seventh...instead of
watching the slow spiral downward one of these countries will sell off the
dollar, weakening it and causing a rush to sell off dollars in order to save
what is left of their national savings....
When it happens...who knows...
What is means...probably oil at 200-250 easy, Gold well over a thousand...US
inflation 10% -15% atleast, and basically economic collapse in the USA and
across the world...
The scenario might sound crazy, but if you are one of those countries holding
dollars and you see the value of your holdings start to rapidly deteriorate, you
would sell out in a hurry no matter what the global economic situation to would
result in...nobody wants to be the last one still at the dollar party, because
that will be a high bill...
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Bushs' father was demanding electric cars over 17 years ago !
Don't make me drag out my videos !
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...Obama may sound good, but I believe that the when the Republican spin machine
gets going...he will be done. Does anyone really think paranoid middle america
will put national security in the hands of a guys with the middle name of
Hussain? I like him..but I think our tax breaks are safe.
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Xaviar - Take a deep breath and go to your happy place...it's called sarcasm, if
you read the WHOLE post, not just the first couple of lines, I think it would be
painfully obvious. I was responding to DBT's answer.
BTW - Kurt stay outta this!! LOL LOL LOL
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The gas tax break does NOTHING. It might save you $50 a year? Listen, at least
Obama makes sense when he criticizes something.
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Drew: your an idot, This is not just the Presidents fault
Congress took house in 2006 and until then things were fine. The Dems also voted
the war as well. It was Dam Saudi Arabia that backed out of their promise that
if we went in Iraq and helped protect them from Saddam, they promised that they
would keep oil low, The Saudi's lied-
The Democrates are no better and If Obama were to get in things are really going
down hill because all he wants to do is raise taxes. Obama says no to Nuclear,
No to Off Shore drilling, No to Solar, No fuel Cells HE SAYS NO TO
EVERYTHING..........Obama even Opposed a tax holiday on Gas, MAybe its not much
but at . 18 cents per gallon of tax would help some
What the frick does he plan on doing
McCain wants to give Corporations big breaks and bring them back to America,
give more tax payers big tax credits like doubling the child tax credit from
3500 to over 7,000.
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That damn president of ours...he made us dependent on oil and then created a
supply problem so we would have to pay $4 a gallon at the pump. But before
that, he set up 9/11, sent us into recession, and then kept interest rates
artificially low for so long, that we over leveraged ourselves. Hell, he even
put a gun to our heads, making us buy houses we couldn't afford. And then he
made the investment banks package these mortgage bonds (you know the ones backed
by the mortgages that we wouldn't be able to afford once they reset) in weird
obtuse investment vehicles to be sold to investment firms. On top of that he
made Ambak and other bond insurers, insure these soon to be worthless investment
vehicles thereby insuring a near collapse of our credit system. So, yes,
President Bush is responsible for the situation we are in. Hey, wait a minute,
I think HE was the second gunman on the grassy knoll.
Let he, who is without sin, cast the first stone...
Bottom line...suck it up, quit bitching, do something about it, or get the hell
out of the way!
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sounds like they might be shorting this market. Lets hope this is not the case.
I would like to believe our great nation is not on the verge of this type of
calamity. I put the blame on Bush I think he has just ruined our nation
financially. I would bet the high price oil is paying for the slaughter of our
troops in Iraq too! Great nation bad leadership! Now left with nothing for the
future either. I guess it is getting worse.
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Interesting take on it....makes for good hyperbole. I do think the grimy
terrorists would like to (and probably are) engaged in economic terrosrism. The
Saudis are probably the worst..they just do it behind our backs. The most
probable scenario is that alternative energy takes hold and the demand for oil
drops gradually...which is what needs to happen.
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I find Peter's scenario far more plausible as well. Currencies from major
nations never get too far out of balance due to globalization.
It's simply not in the best interest to let one country go because it would hurt
everyone else. Also remember the flipside of a cheap currency is a renewed
manufacturing base that would increase the country's competitiveness and inflate
the dollar.
Crazy scenarios like the one you have here are not uncommon. Take a quick look
through SeekingAlpha, the stories and comments are full of them.
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This wasn't really a question...i was just relaying this author's ideas...I
found them very interesting and just wanted to share them with the pickrs...I am
going to check out those forums right now...
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