Australian Politics Forum - 3rd largest current account deficit?

AUShole

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Re: 3rd largest current account deficit?
Reply #30 - Apr 1^st, 2007 at 4:30pm

Quote:

They will be using euros and apparently if this happens and Iran starts trading oil with euros - this will cause the fragile US economy to collapse.

Do you really believe that?

If so, it means the rest of the world will just sit around and watch, because they have no interest in the performance of the US economy.

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mantra

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Re: 3rd largest current account deficit?
Reply #31 - Apr 1^st, 2007 at 10:29pm

I don't fully understand it - but it is simply explained in this article:

Excellent article by Cóilín Nunan: "Oil, Currency and the War on Iraq". Fascinating explanation of some major economic mechanisms involving dollars and euros and oil. A very big reason that the United States is such an economically and militarily dominating country is apparently that U.S. dollar is the de facto world reserve currency. Lots of things are counted in dollars and some goods are only sold for dolars. That means that foreign governments and corporations and banks are keeping large dollar reserves. That essentially amounts to a huge loan the rest of the world is giving to the United States, which will subsidize the U.S. economy. In order to acquire those dollars, the rest of the world has to provide goods and services for those dollars. That allows the U.S. to have a huge import/export imbalance. Last November, 48% more imports than exports. It would be untennable for any other country to run such a deficit.

Next major point is that one of the reasons everybody has to have dollars is that the OPEC oil producting countries only accept dollars for oil. Well, not all of them. The only one that does something different is Iraq, which only accepts Euros for their oil, since 2000. And Iran is considering it as well. And the thing is that it might just as well be Euros that everybody used as a reserve currency. It would apparently be a better choice in many ways, because the European economies are more balanced, and the OPEC countries would end up getting more value for their oil. So, now, what would happen if Euros became the only choice for buying oil? Most likely the U.S. economy would plunge, because it would no longer be subsidized in that manner. And EU would probably be quite happy being subsidized in its place. Anybody thinks all this might have something to do with the great urgency to take over Iraq? And why would Britain support it?
[i][/i]
The full article by Coilin Nunan
http://ming.tv/flemming2.php/__show_article/_a000010-000538.htm

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mantrasense(Guest)

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Re: 3rd largest current account deficit?
Reply #32 - Apr 2^nd, 2007 at 9:37am

mantra says "I don't fully understand it". Actually, you don't understand any of it - you just hate the US and are looking anywhere for signs that they may have problems. The article you posted was written over 4 years ago. The Iranian Euro oil bourse is now even further away than it was then - it ain't going to happen. You obviously haven't even read the earlier posts on this thread. You seem to think that the so-called US dollar holdings can be cashed in. This is absolute nonsense as I explained to enviro on this thread earlier. Most of the US reserves held are in the form of treasury bonds with repayment dates many years ahead - many of them 30 years ahead. Anyway there has been detailed analysis of the Euro oil bourse possibility showing that even if it were to happen it would be irrelevant. The oil buyers would only need the Euros for one day.
Stick to subjects you know something about - might limit your posts somewhat.

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mantra Gold Member Offline ozpolitic.com Posts: 10750 Gender:	Re: Sense strikes again Reply #33 - Apr 2^nd, 2007 at 9:40pm As far as hating the US - another one of your senseless accusations - it's only their president I have a problem with. It's a free forum and the posts were just my views only. Did I say I was an expert on the subject? So what if the article was 4 years old - the illegal invasion of Iraq started 4 years ago.
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Sprintcyclist

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Re: 3rd largest current account deficit?
Reply #34 - Apr 2^nd, 2007 at 10:03pm

Hi mantra - How are you ?

Yes, some posters seem to specialise in personal abuse. It shows something about themselves.
(I SO held back a quote then - it is a perfect one too !!)

USA is in huge financial strife. Their debt is just enormous. Bigger than that.
Bush drove the US into an economically dire situation, debt wise.
(Thought you may like to hear that Wink

)
He "bought" the last election with tax cuts.

It is the second biggest debt they have ever had (using one measure). The biggest was just before the great depression.

I have heard the "conspiracy" theory of US going to war in order to support their currency.
Generally I do not agree with "conspiracy" theories.
Wars are REALLY expensive, oil is REALLY cheap by comparison, other energy systems are available too.

The US $ is the currency used to buy and sell oil in generally.
So the buyers of oil have to have US $ to buy oil. This is a demand for US$.
A demand increases the value of anything - even money !!
At the same time though, the sellers of the oil have LOTS of US$. Effectively, they sell those US $. Which is the supply side of the oil based US $.
At the end of the day, I don't think using the US $ for the oil market "helps" the US $
The supply matches the demand. The US$ the sellers have do not vanish.

Take care

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Modern Classic Right Wing

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mantra

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Re: 3rd largest current account deficit?
Reply #35 - Apr 2^nd, 2007 at 10:33pm

Thanks sprintcyclist.

Quote:

USA is in huge financial strife. Their debt is just enormous. Bigger than that.
Bush drove the US into an economically dire situation, debt wise.
(Thought you may like to hear that )
He "bought" the last election with tax cuts.

It is the second biggest debt they have ever had (using one measure). The biggest was just before the great depression.

Yes the above is so true - they have spent the next 40 years of their projected budget. There was a little about it on some program tonight - it indicated that America's economy is just teetering on the edge - China will be affected and Australia if they go into a recession.

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enviro Senior Member Offline Taking Out The Trash Posts: 323 Weethalle NSW Gender:	BUY USA Reply #36 - Apr 3^rd, 2007 at 8:29am Gee, we better start buying USA products to help their economy. I just ran out and bought a new Jeep (don't worry Mantra it is a diesel) so I hope this helps their economy. Think of the dominoe effect (Or butterfly effect). BUY USA
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AUShole

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Re: Sense - less strikes again
Reply #37 - Apr 3^rd, 2007 at 5:18pm

mantra wrote on Apr 2^nd, 2007 at 9:40pm:

If you haven't got the decency to respond appropriately - please ignore my posts - practice your viciousness on someone else.

And I thought I was the aushole! Wink

Sense tried it on me, but after I admitted my error, left me alone. Eventually. After I asked questions sense couldnt answer! Cheesy

Mantra, some of the material you have posted is bordering on conspiracy theory. Most of what sense has written is factual, it just isnt presented in a very positive way.

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mantra Gold Member Offline ozpolitic.com Posts: 10750 Gender:	Re: 3rd largest current account deficit? Reply #38 - Apr 3^rd, 2007 at 7:07pm Aushole - obviously some of my arguments border on conspiracy and I'll admit are sometimes flawed in the eyes of others, but we all think differently and we have the right to think that way as long as we don't hurt others. I don't mind my errors being pointed out reasonably.
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freediver

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Re: 3rd largest current account deficit?
Reply #39 - Apr 5^th, 2007 at 8:10am

I don't fully understand it - but it is simply explained in this article:

Most people do not have a decent understanding of economics. As a result, there are a lot of charlatans out there making absurd claims. If you don't understand it then it has little value, unless of course you want someone to explain it to you.

The US $ is the currency used to buy and sell oil in generally.
So the buyers of oil have to have US $ to buy oil. This is a demand for US$.
A demand increases the value of anything - even money !!

I'm pretty sure this is wrong.

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I identify as Mail because all I do is SendIT!

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