Perhaps I'm just a skeptic, but I would not expect a site called "the economic collapse blog" to be the bearer of fair and balanced information. Just the title screams fear mongering click bait stories.
In fact US only imports a small percentage of it's oil from Iraq and instability there isn't that big of a deal in terms of oil supplies to the US. People overblow the oil thing. A lot. I mean, like a whole lot.
no you just mistunderstand it. It has nothing to do with the oil supply The USA has a deal with oil producers to sell oil exclusively in usd. This keeps the dollar strong. And in turn the us military protects these oil producers The reason we went to war over oil in Iraq wasn't because we need oil from them, but because we need to protect the dollar. Iraq Iran and others have been trying to break the status qoa. China and Russia don't want to have to buy oil in dollars. Sent from my LG-E739 using Grasscity Forum mobile app
how does it make the dollar stronger exactly? besides acceptance factor which is already probably only second to the euro, what does it do to maintain or increase its value?
the demand for US dollars along with some other factors are the causes fluctuations in exchange rate. Usually when a a company like that switches currency its because they feel its going to devalue in the future and want to switch to a stronger, appreciable currency.
so would you say this then basically creates inflation directly related to the amount of dollars they stop using? like company x is using 20billion less per year, so now we have an extra 20bil in supply? which then ofc causes direct inflation?
Its basically the equivelent of a gold backed currency except with oil. If the oil stops being traded in dollars, the dollar.loses its value Sent from my LG-E739 using Grasscity Forum mobile app
possibly, but the main problem is the value, which is subjective. Value is determined by what people are willing tto give up for it. If people don't want the dollar. Then it has no value Sent from my LG-E739 using Grasscity Forum mobile app
it will just signal to other investors to sell dollars ans invest foreign, causing further devluation. Like when Goldman Sachs sells gold, everyone follows because they assume sachs knows their shit and has data others don't have to back up their intuition.
The flaw in this argument is the US is going bankrupt on military spending, loses it's AAA credit which makes their dollar even less valuable. So if that truly is the strategy in the Middle East it seems a poorly thought out one. Is it really worth spending trillions to make sure a relatively small amount of oil gets traded by the dollar?
if US bonds drop in rating, the entire notion of a "risk-free" rate of interest changes because bankruptcy risk is added to the fact. There's a multi trillion dollar derivatives market that relies on the movement of a risk free rate. And that's just one investment market that deals with oil....that doesnt include stocks, bonds etc.
The imf are thugs. They start shit with countries that don't use their Mason paper monetary. I'm interested in seeing what kind of new propaganda BS will be thrown at Russia now
Very unlikely! This article is talking about money Russian people (not Russian gov.) took out from U.S. banks is chum change! $13.2 billion dollars is nothing. Already half of Russian reserve is not in U.S. dollar; the other half being approx. $250 billion in U.S. dollars. Now think about this. If they drop the U.S $, they have to sell this bond, but in what market? To whom? How long will it take to change over $250 billion U.S.? The money in play on daily bases on foreign exchange market is approx. $5.5 trillion dollars, which is an estimate based on BBH.com (Brown Brothers Harriman) study. That's over $5 trillion dollars on daily bases, if you can believe it! It's a bad move from Russia to drop their U.S. reserve, they end up losing money.
maybe they know something we don't. ^^ If you had $250 billion dollars today, and knew it was going to be worth less than half that tomorrow... wouldn't you dump it for whatever you could get for it?
The U.S. dollar is going no where. Don't buy into hype. Losing 50% of it's value? not a chance! Do you know what it means if the U.S. dollar lose 50% of it's value? global market crash. $250 billion means nothing to a daily exchange market with a capital of $5 + Trillion U.S. dollars. Saudi Arabia can fart and produce $1 Trillion, rendering the Russian selling $250 billion as if it never happened.
have you seen where the dollar has gone in the last 50 years? It's practically worthless already. The only real value it has is its ability to be reliably manipulated. Let's scale down the example. If you had $25 in your pocket, and you knew it would disintegrate by tomorrow... wouldn't you try to trade it for something else before that happens? Screw the guy who gets the worthless disintegrated money, all you want is the perceived value you thought you owned, before you realized it was going to disintegrate. If i couldn't find anything else in time, i'd buy a $25 apple, just because an apple is better than nothing. When large amounts of a currency are "dropped" by any large organization, it also devalues that currency... potentially significantly, depending on how much "weight" is placed on the dropper's evaluation. If people with dollars trust Russia's evaluation that the dollar is worthless, the remaining dollar owners' dollars will then lose significant amounts of value, which COULD result in a crash, because suddenly, everyone sees the value plummeting and wants to get rid of it before it's worthless, so they can at least buy an apple before tomorrow...
dude, the us dollar is not worthless. its the strongest currency in the world atm despite how you feel about the economy. in reality about 90% of foreign exchange involves the us dollar
technically, it still has perceived worth... but without a gold standard, it's a fiat currency. They keep inflating it to "make more money" out of nothing. Compared to 50 years ago, it has almost completely lost its purchasing power. It's practically monopoly money already. The only real value it has is the value assigned to it by those holding it and trading it... moving it around to make "gains" through interest and market fluctuations. It isn't worth nearly as much as the issuer would have us believe. That's part of why those making minimum wage can't afford to do anything but slowly starve as their inevitable debts spiral out of control. And yeah... you say "about 90% of foreign exchange involves the dollar," but think of what would happen if one of the other economic superpowers decided to pull an economic war strategy and "just drop the dollar." Depending on who, where and why, and the stress levels and outlook of traders on that day... it could potentially cause a crash, rendering many of us broke and helpless. And of course, the power to do such a thing would be quite the bargaining chip for any global adversary. The potential for the U.S. to be manipulated and even compromised by its own currency, is real. If the money traders anticipate this, they will attempt to generate "feel good propaganda" in attempt to preserve the outlook on the perceived "strength" of the dollar, in hopes to counteract a potential dump and runs on banks (which would be impossible to satisfy, since we lack a gold standard for our glorious fiat currency). Things could go wrong. I'm intrigued by these events, and see it as a power play, and a potentially effective one.