Iraq = Oil and Euro vs the Dollar

[Freak]

For the past half-century, the U.S. dollar has been the international currency of account for nearly all nations, and it is the currency with which all oil-importing nations must pay for their fuel from the Organization of Petroleum Exporting Countries (OPEC).
For U.S. geo-strategists, the prevention of an OPEC switch from dollars to euros must therefore seem paramount. An invasion and occupation of Iraq would effectively give the U.S. a voting seat in OPEC while placing new American bases within hours’ striking distance of Saudi Arabia, Iran, and several other key OPEC countries.
For much of Saddam Hussein's regime, possession of U.S. dollars was a crime punishable by the amputation of a hand. But nowadays the greenback is the hottest item in Baghdad. Since the U.S. led war in Iraq, dollars, either looted from banks or handed out by U.S. administrators, have flooded the currency market. The $100 bill, or the “waraqa,” Arabic for paper, has become the preferred trade tool in the city of 5.5 million. “Iraqis see the military in the streets, and they go to shops where many goods are priced in dollars. They can't help but wonder if the dollar will be the main currency,” said Dr. Yosra al-Samarai, professor of finance at Baghdad University. Their most frequent complaint is the lack of dinars, which haven't been printed since Saddam's fall.
Here is a well-documented and lengthy article that explains the point in great detail. If there is to be a sudden change in world economics, it will happen around the strength of the dollar and oil production.
http://www.rense.com/general34/realre.htm
If the dollar were to cease being the world’s reserve currency, all of that would change overnight. So, in a nutshell, it is not just about oil, but about which currency—the euro or the dollar— is used to buy and sell oil. President Bush did promise to protect the American way of life. This is what he meant. Thank God for him.
From all outward appearences and posturing, we just may well see a reinstatement of the draft (now upgraded to 18-34 and includes women) in the spring along with a show-down with Iran over nuclear proliferation....regardless of costs in money or lives.
I can see many bankers and economists sitting on the edge of their seats watching this all play out. Japan is my canary in the mineshaft country to watch. They are very susceptible to currency fluctuations with regards to oil prices. They could very well start the house of cards falling if oil prices stay up this high for any length of time
The central bankers face a choice: let the dollar sink, or pump up their domestic money supply making credit easier to obtain. But it can have a disastrous effect on homegrown banking systems—as the Asian countries discovered in 1997 and 98. Excessive dollar purchases led to excessive money creation, which led to rampant speculation, asset price bubbles and—eventually—a full-blown financial panic, which in turn led to the tech stock bubble crash in 2000.
The irony of this may have been lost on Americans (most of whom were oblivious anyway) but not on the Asians: In trying to prop up the dollar, they blew up their own banking systems, causing a massive run on their own currencies, forcing them to go hat in hand to the International Monetary Fund (IMF) for emergency loans of, yes, dollars.
"Khaleej Times Online >> News >> BUSINESS
Gulf private wealth estimated at $1.5trillion
BY A STAFF REPORTER
8 September 2004
DUBAI - Private wealth in the Middle East, particularly the Arabian Gulf states, is growing at an unprecedented rate, principally due to higher oil prices, according to a new research.
But there is evidence that the flow of money to the West-particularly the United States -that occurred in the oil shock years of the 1970s is not being repeated this time, raising questions over the attractiveness of US dollar denominated assets."
This is a good sign of the move to the euro I have been watching. While many feel the invasion of Iraq was an offensive move, I believe it was one of a defensive nature to protect the dollar hegemony more so than about oil in of itself. Petro dollars is what our entire America existence is based.
Imagine this: You are deep in debt and have very little money in the bank. But every day you write a check to cover your expenses. Your checks are worthless but they keep buying stuff because those checks you write never reach the bank. You have an agreement with the oil merchants (OPEC) that they will accept only your checks as payment for one thing everyone wants, and must have—oil.
This means everyone must hoard your checks so they can buy the oil they need. Since they have to keep a stock of your checks, they use them to buy other stuff too. You write a check to buy a TV, the TV shop owner swaps your check for oil, that seller buys some vegetables at the fruit shop, the produce man passes it on to buy bread, the baker buys some flour with it, and on it goes, round and round—but never back to the bank where it would bounce. You have generated a huge debt on your books, but so long as your checks never reach the bank, you don't have to pay. In effect, you have received your TV for free!
This is the position the U.S.A. has enjoyed for 30 years—it has been getting a free world trade ride for all that time. It has been receiving a huge subsidy from everyone else in the world. And as our debt grew, we printed more dollars (wrote more checks) to keep trading.
Then one day, one of the oil merchants—let’s say Iraq—says he is going to accept another person's checks—the euro—and a couple of others think that might be a good idea, too—let’s say Iran and North Korea. If this spreads, people are going to stop hoarding your checks and they will come flying home to the bank. Since you don't have enough in the bank to cover all the checks, you are going to be in big trouble! But you are big, tough and very aggressive. You don't scare the other guy (European Union) who can write checks (euros), he's pretty big too, but given a “legitimate” excuse, you can beat the tar out of the oil merchant and scare him and his buddies into taking only your checks again. And that, in a nutshell, is what the U.S.military is doing right now with Iraq. WMD's and Saddam were just a cover to get in. Which is fine by me.
"At 5.1% of U.S. gross domestic product (GDP) and growing, the current account deficit (CAD) is now even bigger than the federal budget deficit. It’s also much larger than it was in the mid-1980s, which was the last time the CAD triggered a big financial crisis. This included a 40% decline in the value of the dollar, a huge spike in U.S. bond yields and the 1987 stock market crash. The problem with running enormous, open-ended CAD’s is the debt that must be incurred to finance those deficits. Eventually, as deficit piles on deficit, the accumulated debt starts to grow more rapidly than the economy. The U.S. has already passed that point. We now owe the rest of the world a lot more than it owes us. During the eight years of the Reagan presidency, the United States moved from being the world's largest international creditor to the largest debtor nation. While Reagan cut taxes, he had to increase borrowing to pay our way. Capisce?
The only thing standing in the way of a repetition of the 1987 fiasco (or worse) is the continued flow of foreign capital into U.S. assets. With the ever increasing value of the European Union’s euro to the dollar, more foreign investors are moving toward investing their money there, rather than in dollars. This trend could well denote great economic turmoil in the financial markets."
Think it's BS.?????
On November 6, 2000, Iraq announced that it would cease to accept dollars for its oil, and would accept instead only euros. At the time, financial analysts suggested that Iraq would lose tens of millions of dollars in value because of this currency switch; in fact, over the following two years, Iraq made millions. If OPEC were to switch to the euro as the standard for oil transactions, it would have serious ramifications for the U.S. economy. Oil-consuming economies would have to flush the dollars out of their central bank holdings and convert them to euros. France and Germany are the EU leaders with the vision of a resurgent, united Europe taking its rightful place in the world and using its euro currency as a world trading reserve currency and thus gaining some of the free ride the United States enjoys now. They are the ones who initiated the euro oil trade with Iraq.
In April 2002, the Bush administration quickly endorsed the military-led coup of President Chávez, an outspoken critic of Bush’s imperialistic policies. Although the coup collapsed after 2 days with Chavez being restored to power, various reports suggest the CIA and a rather embarrassed Bush administration approved, and may have been actively involved with the civilian/military coup plotters. Venezuelan's ambassador Francisco Mieres-Lopez apparently floated the idea of switching to the euro approximately one year before the failed coup attempt.
On July 21, 2004, the Venezuelan government said it may suspend oil shipments to the United States in case of an eventual conflict with the U.S.”: “In case of an aggression, that option would be considered.”
On December 7, 2002, the third member of the “axis of evil,” North Korea, officially dropped the dollar and began using euros for trade.
In May 2004 an additional 10 member nations joined the European Union. The EU now represents an oil consumer 33% larger than the United States. In order to mitigate currency risks, the Europeans will increasingly pressure OPEC to trade in euros, and with the EU at that stage buying over half of OPEC oil production, such a change seems likely.
Any idea what will happen to the U.S. dollar?????? and our way of life?????:2purples:

[napabob]

More information to chew on before the elections.
This is a nice forum.

[Freak]

This shouldn't influence your vote. I don't believe whom ever will be in office will make much of a difference. It's just my opinion of the goings on per say and how I see the "set to fall" scenario. With a 3 trillion dollar defecate pile and the world changing I don't think there is a way out of a bust. :frown: Which scares me, heres why.
First: With the lowest interest rates in 40 years, huge deficit spending, and a huge tax cut, we are still having a great difficulty finding economic growth pre-peak. M-3 credit card money supply is at a high only seen after the 1987 crash. June alone had a 20% increase in the trade deficit to 55.8 billion dollars. We may not have any real growth from here on out, regardless of oil shortages.
Second: In 2001, a study by then Secretary of the Treasury, Paul O’Neill, projected future “entitlement” expenditures (Social Security, Medicare, Veterans benefits, government retirement, etc) would exceed revenues by $44 trillion dollars. It estimates that closing the gap would require the equivalent of an immediate and permanent 69 percent across-the-board income tax increase, or a 45 percent cut in Social Security and Medicare.
About 82,000 Americans 65 or older filed for bankruptcy in 2001, up 244% from 1991, according to the Consumer Bankruptcy Project, a study done at Harvard. Although there is the perception that many older Americans are affluent, 44% of retirees say Social Security was their primary source of income this year, up from 38% in 2000, according to an annual survey by the Employee Benefit Research Institute. The personal savings rate for Americans has dropped to one of its lowest levels ever—.6 percent.
http://www.economagic.com/em-cgi/data.exe/fedstl/psavert+2
Seventy-seven million baby-boomers are going to start retiring in five years' time. As they do, the number of retirees in America will double. At the same time the workforce supporting them will grow by a mere 15%. Solving this problem will hurt like hell.
Third: At 5.1% of U.S. gross domestic product (GDP) and growing, the current account deficit (CAD) is now even bigger than the federal budget deficit. It’s also much larger than it was in the mid-1980s, which was the last time the CAD triggered a big financial crisis. This included a 40% decline in the value of the dollar, a huge spike in U.S. bond yields and the 1987 stock market crash. The only thing standing in the way of a repetition of the 1987 fiasco (or worse) is the continued flow of foreign capital into U.S. assets. With the ever increasing value of the European Union’s euro to the dollar, more foreign investors are moving toward investing their money there, rather than in dollars. This trend could well denote great economic turmoil in the financial markets.
Fourth: 65% of today’s mortgages are progressive rates—not fixed. As interest rates rise, people are going to lose their homes. For many senior citizens, their only major asset is their home. It becomes a de facto pension. That's a problem if they file for bankruptcy. Although pensions are a protected asset, in most states only a small amount of home equity is protected in bankruptcy. So if the value of the equity exceeds the state exemption, then a person who files for Chapter 7 bankruptcy will lose their home.
Fifth: Water shortages. We are experiencing record droughts in many areas, especially the West. Lake Powell at full pool is 27 million acre feet (MAF) of water. It is now down to a little over 9 million acre feet.
http://www.usbr.gov/uc/water/crsp/crsp_40_gc.html
If it drops much more they will not have enough head pressure to generate electricity. Also, by decree of the Colorado River Compact of 1922, they must release 8.5 MAF each year for the states of CA, AZ, NV, and the treaty agreements with Mexico. The entire economy of the West is tied to this water. And to compound matters, the historical flows have never exceeded 7.5 MAF since the pact was signed in 1922.
Sixth: Major culture shock. We are less than 5% of the world’s population and consume 40-50% of all the resources, while being the most overpopulated country in the world in terms of impact on our environment. We took more than our share and set it up as a standard of living. The three first words out of an American baby’s mouth are, dada, mama, and more.
Couple all this together, and I see the formation of the mother of all storms. Now I know of some other countries that do not want it to happen, such as China. I just dont think it can be stopped.

[Blown 472]

Well, that was refreshing. :(

[eliminatedsprinter]

Freak
If you look at each of the things from the perspective of the worst possible scenario and add in some things that are just plain factually wrong, ie "we are the worlds most overpopulated country in terms of our impact on our environment". I guess you could see things that way, but I'm not quite ready to become a loyal follower of Chicken Little yet. :notam: :wink:
P.S. I've had a shi##y day too. :wink:

[OGShocker]

Any idea what will happen to the U.S. dollar?????? and our way of life?????:2purples:
I hope the dollar FALLS against the euro. A strong dollar kills outbound trade. Ask the Canadians in the sandbar how much their dollar buys in the US. A good edumacation in econmics will set you free.

[sorry dog]

I don't understand how increasing the money supply strengthens the dollars as implied in the first post. :confused:

[Freak]

I'll have to splain later. I put my house on the market yesterday and it sold the first day to the first person that walked in the door. Full price no concessions but they want to close on the 30th of this month. So things just got crazy. Shocked me and my neighbors big time especially since it's on the east coast.

[MagicMtnDan]

I'll have to splain later. I put my house on the market yesterday and it sold the first day to the first person that walked in the door. Full price no concessions but they want to close on the 30th of this month. So things just got crazy. Shocked me and my neighbors big time especially since it's on the east coast.
No offense but based on what you say here YOU (and your broker?) UNDERPRICED YOUR HOUSE! (you left money on the table that could have been in your pocket and I'll bet you lost as much as 10%)

[Freak]

No offense but based on what you say here YOU (and your broker?) UNDERPRICED YOUR HOUSE! (you left money on the table that could have been in your pocket and I'll bet you lost as much as 10%)
Yep, I've been wondering the same thing, but what is done is done. Although I did ask for quite a bit more than the comparibles came in at. So who knows I may have just got lucky.

[Kurtis500]

I see the point of the article. I think it overstates the importance of OPEC as the only viable oil producers and doesnt acknowledge the ability of other areas in the world to produce oil. Even our own. By lending your ear to the article, you are given the impression that OPEC has a monopoly style hold on oil supply and the monies transfered about to pay for it.
If the dollar were to cease being the world’s reserve currency, all of that would change overnight. So, in a nutshell, it is not just about oil, but about which currency—the euro or the dollar— is used to buy and sell oil.
OPEC is not the ones who determine the world currency. There are many other industries than oil, some bigger, i.e General Electric, General Motors, Microsoft and other technologies of trade not linked to the middle east as well as a few giant oil companies themselves with no ties to the middle east. Except for the part of calling the invasion of Iraq an attempt to prop-up the dollar, I dont think the article is inaccurate, I think it 'overempasizes' its position.

[eliminatedsprinter]

, I dont think the article is inaccurate, I think it 'overempasizes' its position.
It does both. There are definate inaccuracies (remember a major exaggeration is a gross inaccuracy). But what is most notable here are the positives that are ommitted. It is a negitive one sided "Chicken Little" article that is of little or no validity or practical usefullness.

[pops1]

Yep, I've been wondering the same thing, but what is done is done. Although I did ask for quite a bit more than the comparibles came in at. So who knows I may have just got lucky.
FREAK, Thank you, that was the best outline of comming I have seen. If you notice our BIG THREE are all International or Largely Owned By Europe, including the last one to go Chrysler. That story alone still eats me up as it was the U.S. people that backed the funding to save it. EU funded the Auro-Industry untill it ran all other Mfg's out of business, IE: North American Aviation, Douglas, Roar, and the list goe's on. Boeing is on the wall and I would assume we will buy our new Fighter Aircraft from the EU in a few years.
Is it any wonder France & Germany thumb there nose @ our current problems
while making large sums of money under the table with Iraq. I have told my kids (40 years old) Europe must become the Power United in the original Roman Base. That has happened, Black Gold will be the cause of the war. Peace will only be agreed upon in the middle east when the leader of the EU signs the treaty between Jerusalem & Palestine and then for only a short period.
It will not be the US or Bush who get the treaty. If Kerry gets in, we will rush to become a play thing of the EU wanting the scraps.
We will finish this war and let happen what will happen over there, bring our troops home put a lid over us & the world will know we have a massive nuke delivery system should we be pushed again.
The New Order will find Russia to become very dangerous again and a giant player in the Black Gold. Russia just got pushed HARD! and it will not play the game the way we do with "Consideration for others" it is a BEAR and will slash and bite and kill.
It seems that the Old Book "got it right again". Think not! 80 percent of your World TV News time has been the Middle East and it will continue to be, like it or not. Its the ALPHA & OMEGA.
GOD BLESS AMERICA is our saving Grace, not J. KERRY or J.F. KERRY or John Kerry or whoever tomorrow he is.
Again thank you, I down loaded and printed it.

[Freak]

America doesn't have a trade deficit because of our failure to export, but because Americans have a propensity to spend today, rather than save for tomorrow. Because Americans don’t save nearly enough to pay for all the things they want, we have to borrow money from the foreigners. But, since we can’t eat, wear or make computers out of money, we have to use the borrowed money to buy stuff from the foreigners. In so doing, we create the trade deficit. OPEC does not control the money, they accept the dollar for their product. It's the transition from a petro dollar to a euro that would cause the problems. Its not what currrency the price of oil is quoted in, but what currency you must pay for it in. With the fluctuations of currency, if you converted your yen to dollars every time you bought oil you would be gambling. You would be devaluing your currency against the market. The US dollar is not called the petro dollar for nothing. Countries banks therefore hold large US dollar reserves to buy oil. They don't just stack them in the vaults, they purchase US security assets and fund our debt. Every single dollar created in the US in circulation is debt money backed by nothing but our promise to pay. If we all paid our debts there would be no money in circulation. for example, when you take out a $100,000 loan to buy a house, the money to repay the interest on the loan is not created, only the principal which in turn, is based only on a 10% reserve requirement. the $90,000 is created out of thin air and only becomes a ledger entry that they reduce each time you make a payment. Our economy is a consumer driven economy, not one of industrial production. Just what would we export like crazy besides our technology? Weapons of war? If the US dollar stopped being the reserve currency, we could not attract investment to service our debt. Dollars would be dumped, flooding the market. The Fed would increase the money supply to support the dollar bringing on rampant inflation.

[eliminatedsprinter]

America doesn't have a trade deficit because of our failure to export, but because Americans have a propensity to spend today, rather than save for tomorrow. Because Americans don’t save nearly enough to pay for all the things they want, we have to borrow money from the foreigners. But, since we can’t eat, wear or make computers out of money, we have to use the borrowed money to buy stuff from the foreigners. In so doing, we create the trade deficit. OPEC does not control the money, they accept the dollar for their product. It's the transition from a petro dollar to a euro that would cause the problems. Every single dollar created in the US in circulation is debt money backed by nothing but our promise to pay. If we all paid our debts there would be no money in circulation. for example, when you take out a $100,000 loan to buy a house, the money to repay the interest on the loan is not created, only the principal which in turn, is based only on a 10% reserve requirement. the $90,000 is created out of thin air and only becomes a ledger entry that they reduce each time you make a payment.
Yea, what he said! You hear that folks, all your money's worthless. So send it all to me and I'll be happy to dispose of it for you. :D :D :rolleyes: ;)

[Freak]

Lol....

[Freak]

The New Order will find Russia to become very dangerous again and a giant player in the Black Gold. Russia just got pushed HARD! and it will not play the game the way we do with "Consideration for others" it is a BEAR and will slash and bite and kill.
I agree. Russia with its massive Oil and Gas reserves will be a major player soon. I read last week where Russia expanded it military budget by 37% before they got pushed and your right they do not negotiate.

[Freak]

It does both. There are definate inaccuracies (remember a major exaggeration is a gross inaccuracy). But what is most notable here are the positives that are ommitted. It is a negitive one sided "Chicken Little" article that is of little or no validity or practical usefullness.
ES is that a looper on that boat in that avitar? Also give me some of those missing positives.

[Freak]

Yea, what he said! You hear that folks, all your money's worthless. So send it all to me and I'll be happy to dispose of it for you. :D :D :rolleyes: ;)
Not worthless but debt. Money is actually debt, and how particularly debt-based money relates to economic growth requirements. The following is an explanation from what I have found in reading about it from a number of sources. It is long but when people start to understand the interconnectedness of debt and the economy most find it very interesting. This should get you going ES. :D So here goes:
All nations currently have a money system based upon the creation of money being made through the issuing of loans.
If you go to Superb Bank Plc and take out a $5,000 personal loan, Superb Bank Plc needs roughly 10% of that loan amount in deposits in their bank in order to issue you that loan. So, assuming a $500 deposit in the bank that has not been used as 10% deposit on another loan, that means Superb Bank Plc can then create $5,000 via the signing of a bank manager's pen. The bank charges you, let's say, 12% APR interest.
Before we go on to how that relates to the economy, let's explain what can happen then and how this relates to further money creation.
You now go and splash out on a second hand car, previously owned by Bob. Bob, through the sale of that car, then goes to Brilliant Bank Plc and deposits that $5,000 into his account. It's his current account, so whilst Superb Bank Plc are charging you 12% interest, Brilliant Bank Plc are only giving Bob on his current account around 0.5% interest on that same $5,000.
Here's the crux though; the banking system then does not distinguish between unpaid debt and debt that has been paid back. In fact, under this money system, both are hard to define. So, Brilliant Bank Plc, with Bob's new $5,000 deposit created by the manager's pen at Superb Bank Plc, can then create a further $50,000 on this just-created money.
Whilst they are giving Bob 0.5% interest on his $5,000 deposit, they will charge let's say 12% interest on that $50,000 created money. They can make prospectively $6,000 in the first year (before compounding takes place if you do not repay) on that $50,000, create by the manager's pen, whilst Bob only gets $25 in the first year from his $5,000 deposit. Also, you are also being charged 12% on your $5,000 loan as well by Superb Bank Plc.
You get compound growth with your savings, hence the reason why banks only give very small interest on your savings - if they didn't, over time, 12% growth per year in interest on your savings would grow to very large amounts over a relatively small number of years. Over 10 years, with no repayments, with a $50,000 loan at 12% interest you would owe the bank $155,000. On Bob's savings of $5,000 - from which that money was created - at 0.5% interest, after the same amount of years his savings deposit would be worth $5,250. A net difference of $150,000.
Why Do Some Banks Offer 6% Interest On A Savings Account, If Only For A Short Period?
You will find this often in new bank startups. Many internet banks have offered such interest rates due to lower overheads than highstreet banks. However, most of the time they then (without reporting to you directly) reduce that interest rate down to a more modest level. Why do they do this? They need deposits first in order to make loans. By inticing people to move money to their accounts via high interest, and it is notoriously difficult to get people to change banks for any reason, they may then make more and more loans. After that, their profits grow.
Now we see how and why the banks make such large amounts of profits, whilst actually producing very little, and also why it is better for them if you don't actually pay back your loan.
The darker side to this is also, that commercial banks actually decide the direction of the economy by issuing or refusing loans.
Given that created money can then be used in another bank to make more created money, it is easy to see how this process can end up generating huge amounts of debt very quickly. In fact, besides paper money, it is estimated that 97% of money in circulation is now debt. Meanwhile, the only work the bank has to do is issue enough loans in order to cover all interest payments on deposits - which in most accounts are devaluing with inflation anyway. Statistically, all that requires is well-designed marketing campaigns targetted at the general public - it is virtually guaranteed that given a marketing exposure to the population, a certain percentage will then take out a loan providing that the potential benefits are communicated well.
So how does this relate to economic growth requirements? The problem that arises with the system is this: where does the money come from to pay back the interest on loans?.
Ultimately, this money must come from the issuing of new loans somewhere else within the financial system. Otherwise, somewhere along the line, someone will be finding it impossible to pay back interest on their existing loans, and bankruptcy will follow. Also notice, for interest's sake, that many people give their labour to receive money created by the pen of bank managers, who then profit out of that loan issue without doing any work for it. Now we know why owning a bank is such a great thing in this soceity - it is almost wealth without work.
Overall, then, this means that for debt to be constantly repaid, new industries and new markets must constantly be found and consumption of goods and services must therefore also rise, otherwise those new markets and industries would not be successful at generating sales. This is why our current economy requires growth and therefore growing consumption of products to remain coherent.
Why Does Inflation Occur?
This is fairly simple. If money is being created through loans at a rate faster than goods, products and services are being consumed, then the value, or purchasing power, of money decreases. This is bad for lenders, because this decreases the value of the money with which they are being paid back. It's also bad for consumers, because they can consume less with the money they have as prices of goods and products rise.
Why Does Deflation Occur?
The opposite case. If money created through loans is at a rate slower than the consumption of goods and services, then the value or purchasing power of money increases. This is good for the lenders, because this increases the value of the money with which they are being paid back. This is also good for consumers, because they can consume more with the money they have as prices of goods and products decrease (in theory).
Why Don't We Want Deflation Then?
Well, that would mean the economy wouldn't grow, wouldn't it? If less and less money were being created via the issuing of loans (causing deflation), we would hit the same problem as described before: at somewhere along the line, someone would find it impossible to pay back the interest on their existing loan, and bankruptcy would follow. In extreme cases, this can cause economies to go into financial cannibalism with a cascade of bankruptcies, if the economy doesn't recover to resupply the issuing of new loans.
How Is Growth Regulated?
Obviously, this system can easily exponentially cascade out of control. Therefore, in the US the Federal Reserve, in the UK the Bank of England, and in Canada the Bank of Canada control the base rate of interest. All commercial banks add their own level of interest onto this base rate, and therefore an increase in base rate means usually an increase in commercial bank interest rates will follow. I believe an increase in base rate also generally means an increase in interest rate on savings deposits. It also means mortgages and other forms of debt will also become more expensive.
Therefore, if the regulating bank increases base rate, a decrease in consumption generally ensues because consumers have less spare cash with which to pay for consumables, leading to a decline in economic growth as businesses get less sales. However, this cannot go on forever, as if growth in goods and services does not continue (i.e. consumption), at some stage, someone will be finding it impossible to pay back interest on their existing loans, and therefore bankruptcy will follow. It would also increase the percentage of the population who are unemployed because businesses receive decreased cashflows. Therefore, interest rate increases can only exist for a certain period of time and must be lowered in order for continued growth to occur and the paying back of loans. This is why after raising interest rates incrementally the regulating banks generally decrement interest rates afterward in some degree to provide a 'swingback' effect.
The regulating banks are also responsible for increasing money supply - through printing it in accordance with economic growth (demand for money). This means there is enough cash to supply the demand by the consuming population and commerce can continue unhindered - and therefore economic growth.
How Is This Related To Energy Supplies?
It is obvious that goods and services take energy to create and supply. A person supplying accountancy services requires a minimum amount of food per day. A machine creating a product requires a fuel/electricity supply. Therefore, unless efficiency of production increases at the same rate as growth in production, the economy requires increasing supplies of energy to function (i.e. to fuel ever increasing consumption of goods and products) - otherwise production will have to slow, which means a slow in growth of products or services supply, which means someone, somewhere will be finding it impossible to pay back interest on loans and bankruptcy will follow.
Notice two key points:
(i) In theory, this system can allow the creation of infinite wealth.
(ii) Accordingly, this would require infinite matter and energy in order to sustain infinite consumption.
Obviously, over the long term, this system is unsustainable, no matter what the energy considerations.
Therefore, the balance of this system is a constant balance between the supply of energy and efficiency of production. If energy supplies cannot increase with growth, or efficiency of production cannot increase with growth, or a complimentary combination of the two, with increasing consumption of goods and services, someone somewhere along the line will be finding it impossible to pay back interest on their existing loans and bankcruptcy will follow. It is easy to see if some major disruption to energy supplies, or efficiency increases (the first case is more practically likely) occurs then this will therefore lead to increasing bankruptcies. If a long-term interruption to energy supplies or efficiency ensues, this leads to increasing bankruptcies, a decrease in the supply therefore of goods and services, a decrease accordingly in consumption, and an increase in unemployment coupled with a decreased or negative economic growth.
Why Was This System Created?
The system was designed by humans and created to place greater pressure on society to grow in wealth, leading in theory to greater quality of life through the general increasing supply of money to society whilst the value of the currency remained the same (no inflation/deflation). It has assumed that if an individual is able to purchase more products and services to consume, that the individual's quality of life will be greater. It also, incidently, means ever increasing profits for banks which increase with economic growth.
The price has arguably been greater stress on society. It also means there is, unless productive output per population can increase, that increasing population numbers are required to fuel increasing production and consumption, coupled with the requirement for ever increasing supplies of energy assuming that efficiency does not increase with every increase in production and growth in the economy.
What Could This Mean For Stockmarket-Tracker Pensions?
Over time, the value of the stock market tends to increase with growth in the economy. This makes sense, as the number of companies increases or current companies grow in size with the increase in money supply - this is in fact a requirement, as unless companies become more efficient, growth in size/numbers must increase with increasing production and consumption. Therefore, a breakdown of the economy of compound growth (dicatated by compound interest payable on debt) will directly correlate with what is called a 'stockmarket crash'. If the growth in the economy does not happen, compound growth in pensions that are tied to the stock market (which many pension schemes now are, with the dissolvement of most final salary pension schemes in large or small companies) cannot occur and therefore pension funds cannot compoundly increase in value over a long period of time.
In fact, the dissolvement of final salary pension schemes may have been caused directly by the fact that this money system started up in 1971. Therefore, whilst many baby boomers started their careers before this money system was created, their final salary pension schemes are more or less an artifact of the previous money system. Of course, even with a final salary scheme, compound growth in a company's size is roughly required in order to satisfy it. Therefore, an ending of final salary pension schemes may suggest the lack of confidence in continuing economic growth into the future.

[eliminatedsprinter]

ES is that a looper on that boat in that avitar? Also give me some of those missing positives.
It's an XP 150 V6 crossflow. When it ran right I loved it.

[eliminatedsprinter]

Also give me some of those missing positives.
Let's see how about some quick positives. I guess one on the environment might be nice ie, aside from, Austrailia, Canada, and Greenland we have about the lowest ratio of developed vs undeveloped land of any country on earth. Even the Africian nations like Kenya etc, that people associate with wild wilderness have more than twice the percentage of their land developed and less than half the wilderness (in relationship to their size) than the U.S. and it can be argued the we are the major industrialized nation that has the least impact on it's environment. We are definatly not the nation that has the most impact on it's environment, not even close.
Yes we are the worlds largst consumer of goods. So what? The wealthy folks on the other side of my neighborhood consume more than my family does. We buy the most stuff because we have the strongest economy. The countries in the EU have around twice the unemployment rate and about half the per capita income of the U.S. Plus they have way less open space and wilderness than we do. The last I heard (about a year 1/2 ago) the average U.S. family living at poverty level had about the same or higher quality of life, in terms of living standard (housing, material goods, etc..) as the average middle class family in the EU nations. :D

[Freak]

It's an XP 150 V6 crossflow. When it ran right I loved it.
Shhh... Don't tell anyone but I have been a fan of those "fishing" motors for years. :D

[Freak]

We are definatly not the nation that has the most impact on it's environment, not even close. :D
I agree. China has the biggest impact. They are building something like 2 coal fired power plants a week. There is a book out about this called something like Black River. China is more responsible for acid rain and poluted rivers over there combined.
Yes we are the worlds largst consumer of goods. So what? The wealthy folks on the other side of my neighborhood consume more than my family does. We buy the most stuff because we have the strongest economy. The countries in the EU have around twice the unemployment rate and about half the per capita income of the U.S. Plus they have way less open space and wilderness than we do. The last I heard (about a year 1/2 ago) the average U.S. family living at poverty level had about the same or higher quality of life, in terms of living standard (housing, material goods, etc..) as the average middle class family in the EU nations.
Ah, but you see ES, we can't afford to buy the stuff now. We are borrowing to do it, and we will continue to do so. Because Americans don’t save nearly enough to pay for all the things they want, we have to borrow money from the foreigners. The big problem with debt based money is that no money is created to pay the interest except more debt based money. Its a spiral. In so doing, we create the trade deficit. This is what I am watching, as our economy improves, the trade deficit grows. China is the wild card, they are growing too fast 8.7% growth in GDP. The Chinese people are getting their firs cars and refrigerators...gonna be hard to shut that down. 40% in the world's increase in oil demand last year came from China alone.
I think we are basicallly on the same page. :D

[eliminatedsprinter]

Freak
Your above posts seem very detailed and thought out. Are you an economist by profession? I ask this because, you answer with the detail of one. However, the only time I have ever heard or read a professional economist mention the trade deficit was when they were debunking it as meaningless. The economists I have heard speak of it are quick to say that it is nothing more than a political consruct that politicians and agenda drivin pundits use for the purpose of demagoguery. They say #1. It is, at best, a very gross estimate that has never been accuratly measured and #2. it is not a valid indicator of anything, least of all problems.
P.S. I agree with you about China. They are a gross poluter and their growth will increase the demand for oil and raw materials and may result in ^ prices. Of course, those ^ prices may slow their growth, so the free market may correct itself, if the politicians don't step in and screw things up.

[Freak]

No my father is/was one, retired now. So he drilled all this complicated crap in my head since I was child :hammerhea because he thought I should know what money really is. Most of the time I wish I was oblivious like most of the world. I took a slight hiatus as a teenager and twenties. You know the ages when you "knew it all" Your right anything can happen at anytime that will change everything. It’s all just speculation and so fun to talk about :sleeping:
I had a tunnel with a Monty 300gt and that thing was a torque monster! I miss that boat.

[pops1]

[QUOTE=Freak]
I do know as long as this nation is Military Strong we have a way out. If we falter thy will come to pick our scraps (Europe) and insure we never return to the dominate table again.
I watched a great debate on going back to the moon.This was or is part of Bush's plan to re-direct our own nations development and goals. This plan wanted to bring minerals and deposits back for commercial applications. It would use a program much like Apollo as its basis. The program would provide us with some exceptional mineral bases to be used in the next generation of Micro Chip enhancement property's next generation materials and a whole host of future applications.
The task team (some of our best)condemmed NASA for its political redirection in space purpose. The outlined plan was good, it again went to the tech development we incurred with the first Apollo, which is the basis of our nations product development & marketing over these past 30 years.
It would require some 3.5 million jobs across all ranges of industry and put us on a new path for the future. "Its Intent".
The PRESS POo POoed it. Yet is this not the direction we need to go. I worked on Apollo and Saturn & I seen the new development every day. Bonding agents, Honeycomb, Fiberglass, New Alloy's, Micro Circuits we could not use because we could not burn them in quick enough to meet the proven safety factors of Apollo. I only hope CSPAN re-runs this so a lot more people can see, listen and think there are ways out of our doldrums.
It was the best direction of new or old thinking this nation has had since JFK put us on that path, Its been close to 40 years now.
No Nation has yet come close to landing on the moon & no other nation has the ability to make it happen except us. China will in 15/20 years and so stated it will do it. Yet the reason is the development that falls out to the people in such a endevor like this.

[Freak]

Pops your right R&D from projects like that are indispensable and I bet you have some interesting stuff to tell from working on those previous projects.

[eliminatedsprinter]

One of the stats that I find a bit troublesome is that, as of about 3 years ago, the number of members of congress who were economists by profession, was 1.

[eliminatedsprinter]

No my father is/was one, retired now. So he drilled all this complicated crap in my head since I was child :hammerhea because he thought I should know what money really is. Most of the time I wish I was oblivious like most of the world. I took a slight hiatus as a teenager and twenties. You know the ages when you "knew it all" Your right anything can happen at anytime that will change everything. It’s all just speculation and so fun to talk about :sleeping:
I had a tunnel with a Monty 300gt and that thing was a torque monster! I miss that boat.
I miss mine as well, even though mine is not nearly as fast as your's was. I had to get a re-built powerhead back in jan and it has not run right since. Right now it has been in the shop since mid july. It broke a piston and it had to have a cylinder sleaved and it still isn't together yet.

[SB]

While I don't put much stock in the story at the beginning of this thread, it does point out that there is a danger to a system that benefits us in the US. Our lovely situation:
We pay for oil and other imported hard goods with paper. They send us tvs, radios, etc. We pay with paper. The foreigners have to invest the money, so they buy stocks here (more paper), and, hee hee here's the kicker, some of the fuc*ing stocks are worthless.

[Freak]

I miss mine as well, even though mine is not nearly as fast as your's was. I had to get a re-built powerhead back in jan and it has not run right since. Right now it has been in the shop since mid july. It broke a piston and it had to have a cylinder sleaved and it still isn't together yet.
My neighbors 115 went away and he purchased a rebuilt unit. It too has never been correct. Of course it could have been the people that installed it. Him and I. LOL...

[eliminatedsprinter]

My neighbors 115 went away and he purchased a rebuilt unit. It too has never been correct. Of course it could have been the people that installed it. Him and I. LOL...
I don't think you could have done worse than my supposedly professional mechanic has done. I also bet the cost was a lot less. :eat:

[Freak]

The movement begins.
Russia ends de facto dollar peg and moves to align rouble with euro
By Steve Johnson in London
Published: February 5 2005 02:00 | Last updated: February 5 2005 02:00
Russia said yesterday it had abandoned efforts to tie the rouble's movement closely to the dollar and switched to shadowing both the euro and the US currency.
The move heightened expectations that other countries operating de facto dollar pegs, such as China, could follow suit.
With 81 per cent of Russia's oil exports currently sold to Europe, the move also provoked fresh speculation that Russia could decide to denominate its oil in euros. Russia is the world's second-largest oil exporter, behind Saudi Arabia.
"Russia has talked about the idea of pricing its oil in euros. If it is starting to put more weight on the euro in terms of its forex regime and reserves, then that speculation will be re-ignited," said Ian Stannard, currency strategist at BNP Paribas.
Russia had announced its intention to introduce a basket arrangement last April but did not set a firm date for the change. The Bank of Russia, the central bank, has been building its euro reserves in readiness, with some 30 per cent of its reserves now estimated to be in euros, against just 5 per cent in 2000. Traders said it appeared Russia had begun to loosen its peg to the dollar in October, when the rouble began to strengthen against the dollar while the US currency fell strongly against the euro.
The bank yesterday indicated that its efforts to keep the rouble closely pegged to the dollar had caused the Russian currency to suffer against the strengthening euro, rendering the old policy "inexpedient".
The rouble has fallen by 30 per cent against the euro since January 2002, fuelling inflation in a country that conducts about 65 per cent of its trade with the eurozone.
"The rouble's performance has been highly correlated with the dollar. Now it will be more aligned with the euro," said Paul Timmons, economist at Moscow Narodny Bank.
He added that the new policy would help Russia move towards a free float of its currency in 2006, a target set by President Vladimir Putin.
This euro weighting will be increased in future to "a level that corresponds to [the] tasks of the exchange rate policy", leading some to conclude that the euro could ultimately account for 65 per cent of the basket, prompting a further re-balancing of Moscow's $128bn (€99bn, £68bn) of gold and forex reserves.
Julia Tsepliaeva of ING Financial Markets said that with inflation currently running at 11.7 per cent, Russia had been forced to stem rouble weakness in order to meet its 2005 inflation target of 8.5 per cent.
Moscow's move illustrates the growing global importance of the euro at a time when a number of central banks have been shifting reserves out of the dollar into the shared European currency.
"It is symptomatic of a global trend and reflects the growing international role of the euro," said Ralph Sueppel, head of emerging Europe strategy at Merrill Lynch.
"It is beginning to take its place in portfolios."
The Bank of Russia said it has been using a basket consisting of 0.1 euro and 0.9 dollars to target exchange rate policy since February 1. With the euro trading near $1.30, this currently gives the euro a 13 per cent weighting in the basket.

[Blown 472]

The movement begins.
Russia ends de facto dollar peg and moves to align rouble with euro
By Steve Johnson in London
Published: February 5 2005 02:00 | Last updated: February 5 2005 02:00
Russia said yesterday it had abandoned efforts to tie the rouble's movement closely to the dollar and switched to shadowing both the euro and the US currency.
The move heightened expectations that other countries operating de facto dollar pegs, such as China, could follow suit.
With 81 per cent of Russia's oil exports currently sold to Europe, the move also provoked fresh speculation that Russia could decide to denominate its oil in euros. Russia is the world's second-largest oil exporter, behind Saudi Arabia.
"Russia has talked about the idea of pricing its oil in euros. If it is starting to put more weight on the euro in terms of its forex regime and reserves, then that speculation will be re-ignited," said Ian Stannard, currency strategist at BNP Paribas.
Russia had announced its intention to introduce a basket arrangement last April but did not set a firm date for the change. The Bank of Russia, the central bank, has been building its euro reserves in readiness, with some 30 per cent of its reserves now estimated to be in euros, against just 5 per cent in 2000. Traders said it appeared Russia had begun to loosen its peg to the dollar in October, when the rouble began to strengthen against the dollar while the US currency fell strongly against the euro.
The bank yesterday indicated that its efforts to keep the rouble closely pegged to the dollar had caused the Russian currency to suffer against the strengthening euro, rendering the old policy "inexpedient".
The rouble has fallen by 30 per cent against the euro since January 2002, fuelling inflation in a country that conducts about 65 per cent of its trade with the eurozone.
"The rouble's performance has been highly correlated with the dollar. Now it will be more aligned with the euro," said Paul Timmons, economist at Moscow Narodny Bank.
He added that the new policy would help Russia move towards a free float of its currency in 2006, a target set by President Vladimir Putin.
This euro weighting will be increased in future to "a level that corresponds to [the] tasks of the exchange rate policy", leading some to conclude that the euro could ultimately account for 65 per cent of the basket, prompting a further re-balancing of Moscow's $128bn (€99bn, £68bn) of gold and forex reserves.
Julia Tsepliaeva of ING Financial Markets said that with inflation currently running at 11.7 per cent, Russia had been forced to stem rouble weakness in order to meet its 2005 inflation target of 8.5 per cent.
Moscow's move illustrates the growing global importance of the euro at a time when a number of central banks have been shifting reserves out of the dollar into the shared European currency.
"It is symptomatic of a global trend and reflects the growing international role of the euro," said Ralph Sueppel, head of emerging Europe strategy at Merrill Lynch.
"It is beginning to take its place in portfolios."
The Bank of Russia said it has been using a basket consisting of 0.1 euro and 0.9 dollars to target exchange rate policy since February 1. With the euro trading near $1.30, this currently gives the euro a 13 per cent weighting in the basket.
Interesting, I read on the bbc the other day about gap tooth threating russia. :notam:

[Freak]

50% is critical mass right now we are around 60% people
China Reduces Dollars in Reserves, Increases Euros, Lehman Says
March 11 (Bloomberg) -- China's central bank cut the share of its currency reserves held in dollars and raised its holdings of euros, according to an estimate by Lehman Brothers Holdings Inc.
Seventy-six percent of China's reserves, the world's second- largest, were in dollars last year, down from 82 percent in 2003, Lehman said in an analysis yesterday of figures published by the People's Bank of China. Lehman is the fifth-largest U.S. securities firm. The rest are in euros, Lehman said.
...
China spent 1.6 trillion yuan ($193 billion) buying foreign currency in 2004 to maintain the yuan's fixed exchange rate at about 8.3 per dollar, 41 percent higher than 2003, the central bank said on Feb. 28. Foreign reserves rose to a record $610 billion, according to People's Bank of China figures.
Lehman predicts China will allow the yuan to fluctuate by the end of June.
Accumulating Treasuries
Chinese investors, including the central bank, are the second- largest foreign holders of Treasuries, with $194 billion in December, according to the U.S. Treasury Department. Holdings of Treasuries almost doubled from $118.4 billion at the end of 2002. Japanese investors are the biggest with $712 billion.
China doesn't provide details of the composition of its reserves. Sood said she based her study on the increase in both reserves and foreign currency purchases conducted by the central bank as well as movements in exchange rates between 1996 and the end of last year.
Lehman's currency strategy team was the most accurate forecaster of exchange rates in the third quarter of 2004, based on a Bloomberg survey of 50 companies. The firm was ousted last quarter by FxMax, a currency forecasting company based in Sydney.
Dollars accounted for 63.8 percent of the world's currency reserves at the end of 2003, down from 66.9 percent two years earlier, according to International Monetary Fund figures released in April last year. ...

[pops1]

Is this saying that the EURO Stock is the future for the Invester.

[Freak]

I think so. Here is my take.
As you probably know by now Warren buffet and bill gates are both short on the dollar. Every time the dollar raises a bit large investment institutes buy euros like crazy.
Most of the major investment houses are betting against the dollar. Why? Because the US is in a catch 22 right now. Attack Iran and the dollars drops, and economy crashes (due to oil going through the roof). Don’t and the petrodollar slowly withers away. Then the economy Crashes.
This is how it plays out if you have euros. Attack Iran and your euros go up right now. Don’t attack Iran and the bourse comes online then the euro goes up. Win win if you hold euros.
Puts a shiver down my spine.

[Freak]

Pops if your not familiar in the Bourse
Iran is selling its oil in euros, which was one of the major reasons way Iraq was invaded. This is way many exerts believe the dollar can’t seem to mount a real rally against the euro. Iran is going a step further it is working on a Bourse to sell its oil in euro, if this bourse ever comes on line the Dollar will easily fall 20 cents. If other countries join in, then it is the end of the dollar as we know it. The only thing the US has going for it is the petrodollar, if that is gone then expect an economic crisis. This will be the end of the American super power. No one will lend the US any money, for the average American that means no more borrow and spend lifestyle and for the Govt. it means no more defect spending. That means no more dollar aircraft carriers, no more nuclear subs, in short no more American Hegemony. America will be just another regular country. U.S. cannot let that happen. If we cannot convince Iran, my bet is we attack mid 06.

[Blown 472]

Pops if your not familiar in the Bourse
Iran is selling its oil in euros, which was one of the major reasons way Iraq was invaded. This is way many exerts believe the dollar can’t seem to mount a real rally against the euro. Iran is going a step further it is working on a Bourse to sell its oil in euro, if this bourse ever comes on line the Dollar will easily fall 20 cents. If other countries join in, then it is the end of the dollar as we know it. The only thing the US has going for it is the petrodollar, if that is gone then expect an economic crisis. This will be the end of the American super power. No one will lend the US any money, for the average American that means no more borrow and spend lifestyle and for the Govt. it means no more defect spending. That means no more dollar aircraft carriers, no more nuclear subs, in short no more American Hegemony. America will be just another regular country. U.S. cannot let that happen. If we cannot convince Iran, my bet is we attack mid 06.
If they wait that long.

[Kurtis500]

I wouldn't cry 'chicken little' yet. The oil price has drastic effects on international economies. Many European countries are more fragile to the rise in oil prices and the subsequent rise in imports that are affected by these increases. The US has far more leverage to offset the differences with our own resources i.e manufacturing, domestic oil drilling and etc. When the dependancy on other countries imports is strained by the cost, the tendancy is to switch back to domestic manufacturers for the countries supplies. With an increase in oil drilling from-and only-for, domestic sales, the price per barrel can be decreased for the US. I personally have an example of this. I manufactur carbon fiber parts and I was contacted by an overseas supplier to make components for various vehicles. The parts would be sold ONLY in Europe since the euro is so high against the dollar. The opportunity for this to take place is only because the dollar/euro ratio is where its at right now. So essentially, I can manufactur parts here, ship to Europe, and make a profit. And so can a middle man. It has been the other way around for too long. I'm not going to praise one President over another on this, but dumping the 'strong dollar' policy has started to renew small business manufacturing in a time where many large companies are sending jobs elsewhere. And with a strong dollar policy, doing domestic manufacturing and sales has cost soo much many large companies are still falling with the dominoe effect from years before. Not the same, but similar, is the effects of manufacturing in California. Where are they going to? other states.
Also, keep in mind, more than half of the imports into this country are by American companies, paying for the manufacturing offshore, and selling back to Americans. The tax and profit of the sales are largely withheld in the states through sales tax, import taxes, transportation and etc.
The Euro and thier respective countries are not praising the rise of the currency like you think. They are well aware of thier venerable position when being influenced from foriegn currencies. They are VERY concerned over the current Bush administrations DELIBERATE/ALLOWED fall of the dollar. They know where they stand to lose if we keep dropping and they keep rising. Just because people will want to dump thier money into euro's doesn't mean everyone gets the money in Europe. With the constriction on thier manufacturing and exports from the inflated value, thier domestic problems like unemployment an inflation will surface and could topple administrations. Thier infrastructure is not near that of the US...
Lastly, this country was born to its superpower status WHEN THE DOLLAR WASN"T EVEN THE TOP CURRENCY.. the Sterling was.
As for invading Iran, I think its too late. They should have done it when thier sponsored Hezbollah attacked the Marines in Beirut.

[Freak]

I wouldn't cry 'chicken little' yet. The oil price has drastic effects on international economies. Many European countries are more fragile to the rise in oil prices and the subsequent rise in imports that are affected by these increases. The US has far more leverage to offset the differences with our own resources i.e manufacturing, domestic oil drilling and etc. When the dependancy on other countries imports is strained by the cost, the tendancy is to switch back to domestic manufacturers for the countries supplies. With an increase in oil drilling from-and only-for, domestic sales, the price per barrel can be decreased for the US. I personally have an example of this. I manufactur carbon fiber parts and I was contacted by an overseas supplier to make components for various vehicles. The parts would be sold ONLY in Europe since the euro is so high against the dollar. The opportunity for this to take place is only because the dollar/euro ratio is where its at right now. So essentially, I can manufactur parts here, ship to Europe, and make a profit. And so can a middle man. It has been the other way around for too long. I'm not going to praise one President over another on this, but dumping the 'strong dollar' policy has started to renew small business manufacturing in a time where many large companies are sending jobs elsewhere. And with a strong dollar policy, doing domestic manufacturing and sales has cost soo much many large companies are still falling with the dominoe effect from years before. Not the same, but similar, is the effects of manufacturing in California. Where are they going to? other states.
Also, keep in mind, more than half of the imports into this country are by American companies, paying for the manufacturing offshore, and selling back to Americans. The tax and profit of the sales are largely withheld in the states through sales tax, import taxes, transportation and etc.
The Euro and thier respective countries are not praising the rise of the currency like you think. They are well aware of thier venerable position when being influenced from foriegn currencies. They are VERY concerned over the current Bush administrations DELIBERATE/ALLOWED fall of the dollar. They know where they stand to lose if we keep dropping and they keep rising. Just because people will want to dump thier money into euro's doesn't mean everyone gets the money in Europe. With the constriction on thier manufacturing and exports from the inflated value, thier domestic problems like unemployment an inflation will surface and could topple administrations. Thier infrastructure is not near that of the US...
Lastly, this country was born to its superpower status WHEN THE DOLLAR WASN"T EVEN THE TOP CURRENCY.. the Sterling was.
As for invading Iran, I think its too late. They should have done it when thier sponsored Hezbollah attacked the Marines in Beirut.
Damn Kurtis I like talking to you. I wish you would pipe up more often. :)
Since we are discussing many things and it's monday. I'll break it up.
The US has far more leverage to offset the differences with our own resources i.e manufacturing, domestic oil drilling and etc. When the dependancy on other countries imports is strained by the cost, the tendancy is to switch back to domestic manufacturers for the countries supplies. With an increase in oil drilling from-and only-for, domestic sales, the price per barrel can be decreased for the US.
You can forget about domestic drilling and keeping the current level of growth/consumption going. (US Production capacity, about 8 million barrels per day, is accomplished with about 533,000 oil wells, averaging less than 17 barrels per well per day. Saudi capacity, similar at about 8-9 million barrels per day, is from 750 wells — averaging more than 12,000 barrels per well per day. The best well in the onshore 48 states is in Grant Canyon Field, Nevada, producing about 4000 barrels per day from sucrosic Devonian dolomites in a small fault block. UPDATE: 1997 discoveries in the Williston Basin are producing up to 6,000 barrels per day from Mississippian Lodgepole carbonate mounds. These are the best wells in the onshore 48 states in decades -- but the Gulf of Mexico is the US hot spot for current exploration and production.)
Currently the U.S. uses over 11million barrels a day.
The Energy Information Administration
has estimated tapping ANWR would lower oil prices by a whopping 50 cents per barrel and if the U.S. ran strictly on ANWR at the current consumption level it would only last 6mths.
Manufacturing infrastructure in the U.S. on a large level would take years to get back online because it was withered away to nothing and it still would not compete with China. Where they are taking conveyer belts off the line cause it is cheaper the pay a guy $5 a day to haul the product by dolly.

[Freak]

Lastly, this country was born to its superpower status WHEN THE DOLLAR WASN"T EVEN THE TOP CURRENCY.. the Sterling was.
Correct but what lead the U.S. on the 30+yr boom is the sales of all oil to all countries in dollars. Which is the only thing that gives dollars value since gold was removed. We would not be living like we are today if this did not happen.

[Freak]

Wow my brain is stuck in 2nd gear this morning. I'll take a stab at the rest and when I'm not fuzzy. I need coffe of something.

[Freak]

OK let's go.
It might surprise you, but if you add all the oil production of the individual European countries, you'll find that Europe is a larger oil producer than the US. The economic fragility as you call it is determined by the amount of oil you need to import. Europe produces more oil and consumes less oil than the US and is therefore is less dependent on imports.
Both Europe and the US are in terminal decline, so both cannot increase domestic production by more drilling. They already need huge investments to keep their production from declining more rapidly.
As for transportation infrastructure. All over Europe you will find train networks, bus networks not comparable to anything in the US. We have built a society that primailary depends on the auto. In Europe the streets might be narrower as in the US - but are regulary in good shape compared with the US network.
Your comments are on American companies overseas are partly correct. It is true that when a company moves overseas, part of the revenues come flowing back. However when you buy a product you pay for a number of things; you pay for the material costs, the R&D costs, the manufacturing costs and finally the profit. When a company moves its manufacturing and R&D overseas, the costs associated with these activities will stay there. Only a fraction of the money you pay for a product will make its way back. The rest ends up in the pockets of the overseas employers.
As for your question of the superiority of the US. I think that resources are the key to power. The powershift from Europe to the US came at a time that Europe had depleted most of its resources and the US discovered that it had a lot of resources.
The US is in now a similar position as Europe was 100 years ago. They have depleted most of their resources such as oil, gold, silver, copper, molybdenum etc.
That means that it increasingly becomes more dependent on other countries. In that respect China is rapidly becoming more important. China has a tremendous amount of wealth hidden under its soil and is not afraid to use them to their advantage.
To give an example of how resources affect the global equation. In order to make steel you need molybdenum. Molybdenum production in the US and Europe are in decline. China still has large quantities of molybdenum. What China has done in recent years is to cut back on the exports of molybdenum. This gives the Chinese steel industry a tremendous advantage. The Chinese steel makers are paying $2 for their molybdenum while the US and European steel makers are paying $28. The Chinese steel industry is killing the global competition.
Dependency and dominance don't go well together. The increasing dependency on foreign imports is slowly eroding the dominance and the superpower status of the US.

[pops1]

Pops if your not familiar in the Bourse
U.S. cannot let that happen. If we cannot convince Iran, my bet is we attack mid 06.
Freak, Doctrine Jerusalem Israel evolution
I do follow all this. My basis is I study Revelations both Old Testament and New. The course I am seeing right now has accelerated at an un-believable pace.
Not to try to bank you with religion, However, Europe is the world leader in the end times. It must reform to the Original Roman Empire of 10, done deal!
Then others will be added and then withdrawal. Russia will form up with Iran to lead a march on the Jew’s only to be stopped by what is described as nuked.
The Temple must be rebuilt- the actual site has now been established (Solomon’s) falling 5 meters short of the Dome of the Rock. Which I always thought some crazy would blow the Dome up. Now that is not needed. The Sanhedrin was just announced- which has not been heard of in 2000 years.
The Sanhedrin is the appointed & responsible for the Temple, and stated last week it will lead 10,000 of its people to the mount. I know all Temple Utinsels and Garments have been made for years waiting.
Russia (Gog Magog) has been the key to timing and I have never seen such a quick reversal. Last week a poll was taken in Russia and 47% of those polled stated Russia should return to the Stalin Doctrine. Remember this wipe out is not the big one- the big one is when China enters at another time.
There are several schools of thought on the U.S. regarding this. One has to do with what some people call the crazy gun nuts. That is to say something will happen within the U.S. to cause us to be invaded for our own safety by Europe. This will lead into a civil war and last 10 months, before we overcome. Another is that we are the Eagle in the West that comes to the rescue of the Jews, or both. I have always bought the Fig Tree timing- Christ condemned the fig tree to never bear fruit again until the end time.
The fig being the Jew, and upon the re-birth of the fig tree-(Israel) United Nations acceptance as a nation 1949- that not a generation shall pass until the end of the worlds current domination as we know it today. Some say 70+ years is a generation today. What I do know is 8000 prophecy's fulfilled and no failures yet- So the Man is not a lair. I also believe that evolution was only 1 page of Creation. Science is coming to prove that more and more with DNA as an example.

[Kurtis500]

OK let's go.
It might surprise you, but if you add all the oil production of the individual European countries, you'll find that Europe is a larger oil producer than the US. The economic fragility as you call it is determined by the amount of oil you need to import. Europe produces more oil and consumes less oil than the US and is therefore is less dependent on imports.
Barely true. Europe is not one country. All the countries are independant of one another and do not have a united stance in the financial banking arena as does the US. They are light years behind us in banking communications through language and foriegn country laws. Remember, each European country consideres the other foreign. It is not the US. This is not new. My cousing knows this well, he is an executive at the largest bank in Frankfurt and holds a doctorate in economics.
As for oil, these INDEPENDAN countries do not share freely amongst each other. Obviously you are including the Caucuses in your math of oil production from Europe. Germany, the most dominant ecomony in Europe (by far) is the most venerable to oil prices and the falling dollar. Thier manufacturing depends far more on FORIEGN oil than the US and are going to get the pinch first. Sort of the path the Japanese took prior to WWII when they were squeezed away from natural resources they relied on but could not produce domestically.
Both Europe and the US are in terminal decline, so both cannot increase domestic production by more drilling. They already need huge investments to keep their production from declining more rapidly.
Really? how. Explain exactly what area is terminal and cannot be reversed.
As for transportation infrastructure. All over Europe you will find train networks, bus networks not comparable to anything in the US. We have built a society that primailary depends on the auto. In Europe the streets might be narrower as in the US - but are regulary in good shape compared with the US network.
The US is vastly more organized and MUCH larger than Europe land wise. For our size, there is no cokmparison in the infrastructure here. If the US was the size of Germany, things would be different but its not.
Your comments are on American companies overseas are partly correct. It is true that when a company moves overseas, part of the revenues come flowing back. However when you buy a product you pay for a number of things; you pay for the material costs, the R&D costs, the manufacturing costs and finally the profit. When a company moves its manufacturing and R&D overseas, the costs associated with these activities will stay there. Only a fraction of the money you pay for a product will make its way back. The rest ends up in the pockets of the overseas employers.
Not partially correct, but accurate. You have stated nothing any different than I did. No money is thrown away oversees that can be brought back here. Strictly operating costs is the only money sent to oversees manufacturing to sustain its operation. A fraction of the money? You make blanket statements. You need to be more specific on what you are talking about. My friend has a product manufactured in China and reduced his cost by 60% at the time and returned MORE money to the US and paid more in income taxes. Now how does that mean less, or a fraction is coming here? He PAID MORE IN US TAXES to manufacture oversees and still made more money after. Looks like WE ALL got more money, eh?
As for your question of the superiority of the US. I think that resources are the key to power. The powershift from Europe to the US came at a time that Europe had depleted most of its resources and the US discovered that it had a lot of resources.
No, the power shift came when we emerged with nuclear weapons, a second to none military and had FOR OVER 50 YEARS ALREADY the biggest manufacturing capacity in the world.
The US is in now a similar position as Europe was 100 years ago. They have depleted most of their resources such as oil, gold, silver, copper, molybdenum etc.
Europe 100 years ago and the US today are nothing to compare. Not even close. The economies are so different, even drawing parralels is dangerous to back-up.
That means that it increasingly becomes more dependent on other countries. In that respect China is rapidly becoming more important. China has a tremendous amount of wealth hidden under its soil and is not afraid to use them to their advantage.
I think the problem is, you percieve the US has nothing left. I need you to come up with some concrete facts about this. Your statements are becomining more generalized and harder to see the sources from.
To give an example of how resources affect the global equation. In order to make steel you need molybdenum. Molybdenum production in the US and Europe are in decline. China still has large quantities of molybdenum. What China has done in recent years is to cut back on the exports of molybdenum. This gives the Chinese steel industry a tremendous advantage. The Chinese steel makers are paying $2 for their molybdenum while the US and European steel makers are paying $28. The Chinese steel industry is killing the global competition.
As an example of my earlier statement, are you saying we've mined the US and dont have any more molybdenum? We cant produce it, now were on the 'terminal decline'. Or have we decided to import this product based on the HIGH US DOLLAR at the time and the cheap import from other countries?
Dependency and dominance don't go well together. The increasing dependency on foreign imports is slowly eroding the dominance and the superpower status of the US.
I dont mean to offe3nd Freak, but I sense a little 'black helicopter' syndrome in your comments. Staking the entire US ecomony on the petrodollar is narrowly focused. The oil and dollar are tied very closely together and can have a big effect on our economy if if falls, no doubt. But getting panicked isn't the way to appraoch this.

[Kurtis500]

You can forget about domestic drilling and keeping the current level of growth/consumption going. (US Production capacity, about 8 million barrels per day, is accomplished with about 533,000 oil wells, averaging less than 17 barrels per well per day. Saudi capacity, similar at about 8-9 million barrels per day, is from 750 wells — averaging more than 12,000 barrels per well per day. The best well in the onshore 48 states is in Grant Canyon Field, Nevada, producing about 4000 barrels per day from sucrosic Devonian dolomites in a small fault block. UPDATE: 1997 discoveries in the Williston Basin are producing up to 6,000 barrels per day from Mississippian Lodgepole carbonate mounds. These are the best wells in the onshore 48 states in decades -- but the Gulf of Mexico is the US hot spot for current exploration and production.)
Currently the U.S. uses over 11million barrels a day.
You need to do something here. The US has capped off the majority of its oil resources in favor of foriegn imports. Your stats dont include what is there that is not being used. The Texas oil fields as we speak are starting to repopulate after oil has risen to such heights. Why would we do that if there is no oil there? Your stats are showing current uses, NOT CAPABILITIES.
The Energy Information Administration
has estimated tapping ANWR would lower oil prices by a whopping 50 cents per barrel and if the U.S. ran strictly on ANWR at the current consumption level it would only last 6mths.
ANWR's capacities are not known to us and full research of the underground resources is not known. Could be something bigger than Saudi Arabia spread around up there. You shouldn't take the latest figure and use it as an absolute, it is very misleading.
Manufacturing infrastructure in the U.S. on a large level would take years to get back online because it was withered away to nothing and it still would not compete with China. Where they are taking conveyer belts off the line cause it is cheaper the pay a guy $5 a day to haul the product by dolly.
US manufacturing is not withered to nothing!! Cheap, easy labor is the only reason people have gone overseas. Technology is an export of this nation and not a reason we go abroad.
Freak, I think your intentions are well meaning and rooted in some facts and figures, but your conclusions drawn from them are generalized. Your argument was very similar to those in the 80's during the Reagan era. 20 years later..??? we are still here.

[Kurtis500]

One last thing.. Please keep the replies as short as possible. This took me all morning to do! :D

[Freak]

One last thing.. Please keep the replies as short as possible. This took me all morning to do! :D
LOL.. I'll try but the issue we are discussing is huge. Anyway I'm at home sick so I get back later. Oh and I dont see black helecopters just a change in the standard of living. No wack job here. LOL...

[Kurtis500]

LOL.. I'll try but the issue we are discussing is huge. Anyway I'm at home sick so I get back later. Oh and I dont see black helecopters just a change in the standard of living. No wack job here. LOL...
Good luck, I just got over my fever. Seems like everyone got it this week! What a bummer.

[pops1]

LOL.. I'll try but the issue we are discussing is huge. Anyway I'm at home sick so I get back later. Oh and I dont see black helecopters just a change in the standard of living. No wack job here. LOL...
Just this morning, it was announced that China will have in 2006 over 600 of the new Russian Sat or Sac Planes, which was stated as being far superior to any we now have in production or on the boards. It further stated China has been spending some 60 Billion per year on subs, Missiles & State of the art Satellites. also it will increase its budget again this year. Its stated intent was to dominate the oceans and sea to protect its "Oil Passage Right" WOW. We cannot even get our congress to get it out of the ground in Alaska, While China see's a need to dominate its passage right.

[Freak]

hey pops
Interesting place...China. Where the gov says the people will suffer so we can do what we deem appropriate. A lot of posturing going on. It will be interesting to see how it plays out. I'd like to see the gov here say anything like that....

[Steve 1]

I kind of liked it better when they only made rubber alligators then the bribed Sink emperor Clinton decided to give them keys to the vault and forced Chinas MFN status on us .
we are funding Via purchasing of their junk a Chinese Military buildup that is going to bite us in the A$$ Time to stop being their #1 customer has long passed.

[pops1]

hey pops
Interesting place...China. Where the gov says the people will suffer so we can do what we deem appropriate. A lot of posturing going on. It will be interesting to see how it plays out. I'd like to see the gov here say anything like that....
I understand E.U. just gave a guy by the name Solana massive power to counter Czar Putin's new power. China - Russia friends again and poor us stuck with a Senate and Congress that thinks we can all survive as a service nation. What every American always wanted "TO be A Stock Boy"
D. Fienstine (Ca. Senator) stated our only problem with our economy, is the new JOBs were not paying like our old jobs. -Now that’s understanding!
Maybe we can be taxed on our new box boy jobs to allow government to assist us with Benefits.
You know what- our trees are cleaner as we starve and let the world make contamination. I am sure they will let us back on the board, as we took such good care of getting rid of all the bad stuff we were generating. After all- We still are the only ones to go to the MOON. or was that also a sketch- I KNOW NOT!