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The value of oil can go up or down, but the currency used by buyers to pay for it is not material. Currencies are interchangeable and vary in value according to the relative scope and reliability of the GDP that lies behind them. So long as the US continues to produce some 22% or so of global GDP, we will be able to buy oil with dollars or to buy whatever other currency sellers wish to be paid in today.
Aside from "dollar" currency, the US has "arms" currency either through force or just selling the weapons/vehicles/etc. So people who won't take dollars will take munitions instead
The arms currency is part of why the US gets looked down on around the world to me :S. We don't like someone, we supply arms to the opposition, or take them out directly like the current Iraq. Not saying other countries don't sell/trade arms but the US is the biggest/most visible of them.
IE we don't like china building their islands? We build "bases" all over Europe as part of Nato... then around China we have naval bases too.
basically, the US is strong through more than it's GDP for the near term future, so the economy will be good. Even the OP's domestic issues pail in comparison to military spending.
The value of oil can go up or down, but the currency used by buyers to pay for it is not material. Currencies are interchangeable and vary in value according to the relative scope and reliability of the GDP that lies behind them. So long as the US continues to produce some 22% or so of global GDP, we will be able to buy oil with dollars or to buy whatever other currency sellers wish to be paid in today.
The currency used to pay for it is absolutely material.
An oil price ceiling is a dollar price floor. When the price of oil goes up from a weakening U.S dollar, there is increased demand for dollars. This "cycle" provides the dollar strength and prevents it from ever growing too weak despite high balance of payments deficits and budget deficits.
Who the hell needs a gold standard? All modern economies need oil.
I agree that the United State's percentage of GDP in the world is hugely relevant. But make no mistake. The influence of the dollar is what allows this percentage to persist.
If the USA is threatened it can use the power of the USD against any enemy without invading. So Iran. If Iran was friendly enough the USA would have little reason to squelch their national economy. If they want to deal in oil in more normal times using another currency the USA and oil companies might not like the competition, but that is about as far as that goes and not the point.
If you physically threaten the USA, you might get invaded. The currency used is very far down the line of worry or reason on the part of the USA.
It has been widely known that the U.s dollar is the most powerful weapon that the U.s can wield in the world today. Even more so than nuclear weapons since they cannot be used.
Threatening the dollar is a physical threat to the United States. Never forget that REAL wars are fought over living standards. Any attack on the U.s dollar is a direct threat to the strength to the United States economy and its military.
There will never be "normal" times with Iran. The United States funded both sides of the Iraq/Iran war to make sure both sides were weakened. The United States overthrew the government of Iran. It's not about competition. It's about the control.
We don't want direct control of your resources. The British taught us how messy this can be. We merely want to be able to purchase your nation's real wealth with paper dollars.
Aside from "dollar" currency, the US has "arms" currency either through force or just selling the weapons/vehicles/etc. So people who won't take dollars will take munitions instead
And we have more black helicopters than anyone else too.
Back in the real world, the US dollar is backed by the real goods and services output within the US economy. Dollars abroad are simply claims on that output. Thanks to the immense size and diversity of that output and the ease of access to it through broad-ranging trade channels, those claims are the most useful of all such claims to have.
Quote:
Originally Posted by eyeb
basically, the US is strong through more than it's GDP for the near term future, so the economy will be good. Even the OP's domestic issues pail in comparison to military spending.
The US has by far the largest and most capable military in the world. Believing that military power is economic power is somewhat silly however. Read some Soviet history if you doubt that.
When the price of oil goes up from a weakening U.S dollar, there is increased demand for dollars. This "cycle" provides the dollar strength and prevents it from ever growing too weak despite high balance of payments deficits and budget deficits.
This benefits who "own" the country, and our trading partners, and is detrimental to US citizens.
The currency used to pay for it is absolutely material.
No, it doesn't matter at all. Oil has its own ever-varying value, which is what buyers are purchasing no matter what currency they use to accomplish the deal. As all major currencies are freely and easily convertible into each of the others, the only value that has any actual meaning is the value of oil.
Quote:
Originally Posted by Thatsright19
Who the hell needs a gold standard? All modern economies need oil.
They need food and water as well. Oil is just another commodity. Like soy beans or sow bellies.
Quote:
Originally Posted by Thatsright19
I agree that the United State's percentage of GDP in the world is hugely relevant. But make no mistake. The influence of the dollar is what allows this percentage to persist.
Although I'm sure it is not what you are referring to, there is considerable inertia in international trade norms and mechanisms built up from the fact that the US dollar has been the world's dominant currency for so long. Other major currencies have niches of their own, but none compares yet to the dollar. This institutionalization of the dollar will make its global status sticky, but it will take a major comet impact wiping out significant portions of our productive capacity while leaving that of other nations intact to cause any sort of shift in the international position of the US.
We don't want direct control of your resources. The British taught us how messy this can be. We merely want to be able to purchase your nation's real wealth with paper dollars.
Are those the same "paper dollars" you get up and go to work for each morning? Is it the fact that you can go anywhere at all and exchange those "paper dollars" for any sort of real good or service that you would like that keeps you going back for more?
The biggest threat to both the economy and our very security is the proliferation of various entities within society that are morally diminishing our efforts to survive Gods wrath. Rather than blame God as the biggest threat I choose His disobedient kids . God will crush this nation like a walnutnut few get that nor believe it .....wait ...wait for it.......wait for it.
From a secular (God a bad man view) the biggest threat is our "real debt" the 19 trillion is merely cash debt you can anti an additional 100 trillion ( entitlements amortinized) , foreign monetary collapse, natural disasters, and a feds led scammed , artificial, illusioned market investment fools money dump.
Last edited by openmike; 07-02-2015 at 02:22 PM..
Reason: formating issues
'Twas brillig, and the slithy toves did gyre and gimble in the wabe.
All mimsy were the borogoves, and the mome raths outgrabe.
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