McTag wrote:There's a whole lot at stake.
Hi McT, how did you get on with the "joke" last night?
I told it to a fellow MUFC supporter watching Chelsea Barca. He insisted on taking it all very seriously, was wracking his brains all match. Nearly hit me when I said Gerry Daly.
As for there being a whole lot at stake...you're telling me there is!
I wasnt trained as an economist either, but the more I think about it, the more I've come to the conclusion that almost nothing happening on the world stage makes sense without taking oil into consideration.
One example. The US dollar used to be supported by gold. (There was a lot of it in Fort Knox, if my memory of James Bond serves correctly). But now it floats like any other currency...except that its the only currency which is accepted (on the NYMEX exchange and IPE) for oil which all countries need. This puts the US government in the unique and very fortunate position of just printing dollars to pay for imports. One might think the value of the dollar would collapse, but it doesnt. Those countries supplying goods to the US are happy to hold US Treasury Bonds in the knowledge that they can use the dollars to buy oil, and because the dollars they hold maintain their value precisely because its dollars you need to buy the damn stuff. But if you dont need dollars to buy oil, if it actually makes more sense to sell oil for euros (for example because you are dealing with a eurozone country) then it could trigger a move away from the dollar and the usurption of the dollar as the international reserve currency. I think the Americans fear this more than anything else. Hence the first thing they did when they got to Baghdad was revert to selling Iraqi oil in dollars (Saddam switched to euros in Nov 2000...some people say it sealed his fate)...and why they are very nervous about Iran opening an oil bourse which would trade in dollars
and euros. I've been trying to find out more about this oil bourse, it should have started trading already but as I understand it technical problems have delayed it (US sabotage?). I read an article on al Jazeera saying the proposed oil bourse could be the real reason behind any American attack/regime change in Iran.
It also explains why the Americans are so keen to keep Britain out of the eurozone, because if we joined oil would have to be traded in London in euros.
sorry for long post...
