Another Explanation for the Iraq and Iran conflicts

[kingbill]

I read an interesting opinion piece in a local newspaper here that incinuated the real reason for the invasion of Iraq and the the sabre rattling with Iran is because of those countries decisions to sell Oil using the Euro instead of the US Dollar. Petro-Euros Vs Petro-dollars
The writers reasoning is that if the rest of the OPEC nations followed suit the US Dollar would Crash causing hyperinflation and destroy the rest of the US economy. It makes a lot more sense to me to say the US is protecting the value of their Dollar, than to say the US is over there protecting Oil or fighting Terrorism.
I would be interested in your thoughts on this topic.

 

[docmercer--banned]

http://www.masternewmedia.org/news/2006/01/23/the_iranian_oil_exchange_proposal.htm


Hussein tried that stunt in I believe early 2002 .... Iran is running behind the curve and I think they are about to open this month ... if I recall purchases thru their Oil Burse (???) is a 25% discount if purchased with the Euro vs the Dollar

I posted that and OF COURSE the Righties jumped my ass ... hell, yeah, take a bow ... Iran and Iraq has nothing to do with "WMD's"

The EU is the coming force in the world marketplace and if the Neo-Cons think not they need to put down the bong and start inhaling Oxygen

Good post!!

 

[bblight]

I would be interested in your thoughts on this topic.

 

[kingbill]

Picture of Man Pooping for lack of real thought on the subject

Intersting response, I would have expected some opinion either way on topic.

 

[Coldweather]

We went in to get the WMD and we achieved that objective. They aint there anymore and this be good. Thank you George W. you did a good job.

 

[eek.]

Europe isn't that powerful really, and definitely nowhere near as cohesive as the USA.
It's definitely a good trading zone, but a political pygmy with a lot of squabbling members.

This petrodollars/petroeuros theory is definitely interesting.

The rest of us buy oil and have to use purchased dollars to buy that oil.

On the other hand you guys just print dollar bills to pay for your oil...
...but...if you print too many dollars the dollar devalues against other currencies and the $$ price of oil will go up anyway, which means you guys lose out anyway.
We borrow/buy dollars as a reserve currency, but again this would get cheaper if your $$ value decreases against our currencies, and the value of the return from loans would decrease (this would also devalue the loan capital -true value- repayable by your government at your end).
The trade/money system tends to be self balancing and I just cant see it being a serious issue.

I have doubts about petrodollars underpinning the value of the dollar, the number of f-16s and your monsterous military spend is what backs the mighty dollar in my opinion.
If I remember right, the US is about 25% of the world economy.

Definitely still a superpower.

I think that if you start to get dollar value problems then your interest rates will increase pretty quickly to stabilise things in the trade markets.

I tend to decouple trading from military might, and IMO the f-16 makes the dollar as good as gold while your trade and industry determines the relative convertability of your cash.

The US tends to do some good trade when the $$ weakens, America still rocks.

 

[bblight]

Intersting response, I would have expected some opinion either way on topic.

KB - that was my opinion - a picture is worth a thousand words

If you had said "yuan" you may have gotten a response, but Eurodollars aren't that strong, comparatively speaking!

 

[kingbill]

KB - that was my opinion - a picture is worth a thousand words

If you had said "yuan" you may have gotten a response, but Eurodollars aren't that strong, comparatively speaking!

Thanks that's what I was hoping for, I don't know enough about the Currency markets that is why I wanted others opinions.

 

[dinojs]

KB - that was my opinion - a picture is worth a thousand words

If you had said "yuan" you may have gotten a response, but Eurodollars aren't that strong, comparatively speaking!

I have been reading about that for a while. Surely the point is not whether Eurodollars are strong or not. It doesn't matter whether it is Yuan, Pounds, Rubels, Bolivars or sea-shells. I thought the point is that it is not dollars. If the world currency moves off the dollar, and oil is a large part of that determinant, then the huge dollar reserves that governments hold will no longer be the favored currency. And there are trillions of them out there that they might want to get rid of. I am not sure of the effect on the US economy when the dollar devalues, and probably not many people are. Imports become more expensive, exports cheaper, so the US should produce more and that is good for it's deficit. But it still has to import goods, as it has no capacity to suddenly replace all those Samsung DVDS. And of course it has to import oil, as ever the problem. With a ever weakening dollar, energy gets yet more expensive, which could cripple industries.

I think that's why this moving from the dollar to anything else in oil markets has been likened to a financial nuclear strike.

Just the opinion of a non-economist after minimum research.