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2007-11-08 Home Front Economy

7 Countries Considering Abandoning the US Dollar (and what it means)

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Posted by Delphi 2007-11-08 00:00|| || Front Page|| [3 views ] Top

#1 REDDIT is almost ballistic = happy about the new dollar woes. *WATCHINGAMERICA.com [Little Green Footballs] > AL-KHALEEJ News - EVEN IF AMERICA MAKES CHANGES, GLOBAL DISASTER STILL LOOMS, or title to that effect.

Posted by JosephMendiola 2007-11-08 00:26|| 2007-11-08 00:26|| Front Page Top

#2 Frankly, perma-war strategies are effecting US foreign policy by scaring off allies. In 2002, Rummy hinted that the GWOT could become an endless "slog." Wheels spin.

In the big picture, I view the 200.000 people - personally innocent/civily culpable - who died in the Hiroshima/Nagasaki nukings, as collateral damage, unfortunate by necessary. The US dollar would explode in value if the President announced that his government would take the necessary steps to end the GWOT by Christmas. What's stopping him? Some compelling need to buy Arab oil with a decimated dollar? Some obsession with nation building on liberal-democratic blueprints, in territorial entites where liberty and democracy are anathema? Some perceived eternal values, which didn't exist until after 1945?

Voter interest in the unwinnable war in Vietnam, abated by 1975. History repeats.

Posted by McZoid 2007-11-08 00:49|| 2007-11-08 00:49|| Front Page Top

#3 "the necessary steps to end the GWOT by Christmas"

Thats gotta be one of the most dumbassed things I've ever seen in print here at the burg.

GWOT stopping doesnt depend on us, it depends on THEM. We can stop any time we want, but they will keep coming. Its their ideaology, ther religion. We are the great Satan and a trheat to islam and therefore must be converted or destroyed.

We triued ignoring them even to the poitn of not strikign hard about Kobar toers, etc.

It got us 9/11. Are you so stupid to have forgotten that?

Posted by OldSpook 2007-11-08 01:11|| 2007-11-08 01:11|| Front Page Top

#4 Old Spook:
You aren't old enough to remember exactly HOW the US pushed the Soviets out of Iran, post WW2.
I hear you: we don't do that because we don't do that, and that is self-evident because it is unthinkable to think of it as non self-evident. And the wagon-burners put away the bow and arrows because they found our rhetoric bombs and tee pee building blueprints, so compelling.

No name calling.

Posted by McZoid 2007-11-08 01:28|| 2007-11-08 01:28|| Front Page Top

#5 Actually this may mean a few less jobs shipped to India. And some companies that already have done that shift may be regretting it (I hope).

Posted by Throger Thains8048 2007-11-08 01:29|| 2007-11-08 01:29|| Front Page Top

#6 This is bad, bad, bad. Once they go off, they ain't never coming back, and it has been a huge advantage to pay the world in dollars. This, more than anything else, will bring America low.

Posted by gromky 2007-11-08 01:35|| 2007-11-08 01:35|| Front Page Top

#7 McZoid, what has your comments have to do with the price of beans? The Islamists won't stop just because we surrender. The price of oil will not decrease until the world economy collapses or the Dem's finally agree to develop ALL alternatives. And these countries that don't like US currency controls will probably crash their own currencys thru sheer greed or socialist stupidity.

Posted by Throger Thains8048 2007-11-08 01:36|| 2007-11-08 01:36|| Front Page Top

#8 This is getting off the track of Rantburg. One goal of al-Qaeda was to severely damage the US economy & weaken US influence abroad by so doing. What little damage al-Qaeda has done along these lines has been dwarfed by what we have done to ourselves, by US economic & industrial policies since 1973.
The main (probably the only) way for the price of imported oil to decrease is for a sufficient number of would-be consumers to quit buying it, either going out of business or out of existence. Barring some weird miracle, the days of cheap oil are over. Developing all alternatives to oil imports will not make a significant difference in the price of oil. The best that can happen is that alternatives will mitigate the pain of import withdrawal & permit our economy to evolve towards less dependence on oil imports.
The US dollar will explode in value all right, perhaps not as badly as the Zimbabwe national currency, but it is moving along these lines.

Posted by Anguper Hupomosing9418 2007-11-08 02:48|| 2007-11-08 02:48|| Front Page Top

#9 Remember the "Northern Peso", cca 1/2002 @ USD 0.62?

Little changed since then, Canadian economy did not grow into stratosphere. In my view, there is hardly anything to support the current exchange rate, as there was nohing to support it then. Ideally, the value of canuckian loonie should be at about $0.75-$0.80 US, which would reflect the real purchasing power when comparing both currencies.

But vis-a-vis Euro, the disparity is even more apparent.

Vague feeling something fishy may be going on, mayhaps, in part.

Posted by twobyfour 2007-11-08 04:01|| http://www.twobyfour.nfo/]">[http://www.twobyfour.nfo/] 2007-11-08 04:01|| Front Page Top

#10 Another thought... or rather prediction... within some 5 years, Euro will be shrinking so fast that the current decrease of USD value would seem like a hiccup. Some European countries will drop Euro like a hot potato and revert to their original national currencies, for te sake of self-preservation.

In any case, buy some gold.

Posted by twobyfour 2007-11-08 04:12|| http://www.twobyfour.nfo/]">[http://www.twobyfour.nfo/] 2007-11-08 04:12|| Front Page Top

#11 TT8048:
I advocate the use of nuclear blackmail against the Wahabist/Khomeinist terror states. They would not only surrender; they would at long last start the liquidation of Islamofascists. But they might attain allies, if US authorities continue to predict perma war, financed by perma deficits.

Cause of deficits: perma war. Effect of deficits: lower US dollar and higher oil import costs. Solution: Quick-victory. Obstacle: adherence to Post World War 2 values

Posted by McZoid 2007-11-08 04:21|| 2007-11-08 04:21|| Front Page Top

#12 McZoid, I understand what you're saying, but I consider it rather a simplistic frame. Along those lines, but the protracted was is here to stay for foreseeable future, whether we like it or not, only that specific theatres can be handled with more intestinal fortitude, that's for sure. Iraq probably won't be repeated, although I would argue to the last breath that it had to be done that way.

Posted by twobyfour 2007-11-08 04:44|| http://www.twobyfour.nfo/]">[http://www.twobyfour.nfo/] 2007-11-08 04:44|| Front Page Top

#13 PIMF protracted was = protracted war

Posted by twobyfour 2007-11-08 04:45|| http://www.twobyfour.nfo/]">[http://www.twobyfour.nfo/] 2007-11-08 04:45|| Front Page Top

#14 I feel the high price of oil is more of a demand problem than a supply problem, which is an indicator that the world economy is picking up.

Oil prices will rise until they dampen worldwide economic growth and some turn to coal, nuclear, hydro, solar, etc.. Which countries will be hit hardest? We'll see. Although it has started to switch over, China is still closer to using coal-based energy technology for their own economy than the US is it seems to me, so they shouldn't have as bad a time with it as the US. If China gets out of the oil consumption market, prices should drop significantly, and the US economy will pick up again. I don't know where India is on the curve, or where it is getting its energy from.

Am I way off base here?

Posted by gorb 2007-11-08 05:12|| 2007-11-08 05:12|| Front Page Top

#15 protracted was is here to stay for foreseeable future And they have always been there too. There are fewer years when civilizations are NOT in protracted wars than the other way around. It's just a part of this crazy world we live in. It is only this ridiculous 60's generation that burned out their brains and thought you could end a war by not showing up.

Gorb, you make a good point.

We have our own natural resources, so if the dollar tanks, it will hurt us, but we can just bring the jobs home again. What worries me more is Saudi money buying up our infrastructure while the dollar is cheap.

Posted by Glaling Turkeyneck1651 2007-11-08 05:20|| 2007-11-08 05:20|| Front Page Top

#16 + Chinese

Posted by Glaling Turkeyneck1651 2007-11-08 05:23|| 2007-11-08 05:23|| Front Page Top

#17 The article is crap with a Capital C.

Obviously, an abandonment of the dollar is bad news for the currency

And what does that mean? Like the USD has an opinion? Just Trash for morons.

Posted by phil_b 2007-11-08 05:49|| 2007-11-08 05:49|| Front Page Top

#18 I'm not convinced that the WoT per se really has anything to do with the eventual success of the US economy.

In my lifetime, I've seen similar things said about Euroland (twice now), the old Soviet Union, Japan, and China. In the end, all proved to be nothing more than scares and a means for sensationalists to get their face in print and on TV (sort of the Paul Ehrlich's of economics).

I'm not suggesting that when dollars as a commodity are worth less that there are no negative potential effects. But viewing a currency simply as a commodity disconnected from the rest of the economy is overly simplistic.

We fought, and largely funded, the Cold War from 1946 until a few years ago. Because of our commitment to fight that war, Euroland was able to divert large sums of its GDP (that it couldn't have if it had to bear the entire cost of the Cold War) to vast socialist projects and business infrastructure that even had we wanted to do so, we couldn't match at home because we were engaged in a protracted struggle to prevent the human race from becoming communist-controlled. In the process, we suffered oil shocks much greater proportionally than the one we have now, had an internal front against our nation and civilization opened up at home by leftists living here, and had to undergo a legislature and at least three presidents (LBJ, Nixon, and Carter) who bought into perpetuating the labor market structure of the early 1950's way beyond it being an economically smart or feasible thing, collectivism, hyperregulation of business, and cultural Marxism.

Yet at the end of it all, the U.S. came out OK, and Euroland became a demographically doomed sea of pessimism and collectivism and autocracy, the Soviet Union went away, Japan's economy has been much attenuated (some would say stagnant), and China is so dependent on world markets and their own weirdly valued currency that they are always two steps away from collapse.

This current (pardon the pun) devaluation of the dollar, and threats by countries and runway models and entertainers, to switch from the dollar is chicken little stuff. The US economy and the dollar may be experiencing these hiccups, but in the end, WoT or not, things will be fine.

Posted by no mo uro 2007-11-08 06:45|| 2007-11-08 06:45|| Front Page Top

#19 Once the dollar's status as the world's reserve currency is lost regaining it will be difficult to impossible. There is still time to correct the slide, but it would require belt tightening on a scale that the American people may not support.

We would need for the Fed to significantly raise interest rates. Also, we would need to raise taxes while simultaneously cutting Federal spending to generate budget surpluses. The domestic economy is already slowing but strong global demand and decent strength in exports would keep a recession short, if it happens at all.

This is not an appetizing prospect but it is the natural consequence of decades of neglect which built the National Debt to titanic proportions.

Posted by Snakes Speregum9460 2007-11-08 07:46|| 2007-11-08 07:46|| Front Page Top

#20 I don't agree with all of your mechanisms, Snakes, but I get what you mean about America not wanting to do the difficult thing or even listen to the facts about it. As an example, a while back I suggested on this site that exposure to world labor markets would mean that all but entrepreneurs and the most highly skilled specialized professionals are going to have to resign themselves to a diminishment of living standards and lifestyle until the global labor market became essentially level. For my trouble, I had two posters threaten physical harm to me and my family.

People who perform unskilled or semiskilled jobs, or are skilled but in a field where there are large numbers of others who can perform the same task, have a lot of psychological baggage and a huge sense of entitlement as far as material wealth and income stream security go, because the boom times of the immediate postwar era have been coopted (wrongly) into our national dialogue and consciousness as the "norm" for human existence when in fact it was a unique time in history and will not ever be duplicated - that period was an historical anomoly.

I think that once we get past those unrealistic expectations about lifestyle and income stream security (what some have called the "revolution of rising expectations) we will do the necessary hard things, but I suspect it will take the demise of the baby boom generation for this to be so - another twenty or so years.

Posted by no mo uro 2007-11-08 08:14|| 2007-11-08 08:14|| Front Page Top

#21 SS9460: I somewhat agree with you, but what currency would the "world" switch to? The Euro (pshaw!)? Chinese yen (which is so "manipulated" that the smart folks wouldn't touch it with a 10' pole)?

I agree with your consensus that we need to get the FEDdebt under control and pronto, but RAISING taxes is not the way to do it. Cutting spending, yes, but raising taxes? No way. Remember, we've cut taxes significantly (since 2001), and the revenues to Treasury Dept. have SKYROCKETED. We're only having massive debt because of record Fed. spending, including the WoT.

Yet, if we cease "taking the fight to them," what'll happen if we get struck again? Another strike on NYC alone would cause many "the sky is falling" chicken-littles to run from the US as far as money goes. China (and to a lesser extent, Saudi) could effect us somewhat by calling on the US debt they own. But, they shoot themselves in the foot (especially China) if they p!ss off their major market (Chinese goods to US consumers and Saudi oil to US consumers).

Posted by BA 2007-11-08 08:18|| 2007-11-08 08:18|| Front Page Top

#22 After reading the article, I'm not sure I'm so scared now. Most of these countries are already moving away from the dollar, and the quotes the author uses often resides in time 3-4 years ago. For Pete's sake, Sudan, Iran and Russia are listed as 3 of the 7....they could move off the dollar and we wouldn't even notice, especially Sudan! China and Saudi MIGHT be 2 nations to worry about, but then again, they shoot themselves in the foot by p!ssing off their markets. Venezuela bartering in oil (instead of trading in $)? The royalties/taxes off that probably amount to 1/10th of 1% of our total revenue stream to the US Treasury. The "top 2" nations she lists may be cause for concern, but the others are probably miniscule at best.

Posted by BA 2007-11-08 08:27|| 2007-11-08 08:27|| Front Page Top

#23 If the dollar falls far enough and enough confidence in it is lost the EUro will begin to look good. The EU wants to sell EUros. That's why they print a 500 EUro note (for drug dealers). We're helping them.

It's all about one thing, financial discipline. And we don't have it. This is Bush's biggest problem and it was the best thing about Clinton; the Dollar. This is why big business has left Bush and the Republicans. They have become the weak currency party.

Look at what Bush has done; tax cuts, uncontrolled deficit spending, medicare prescription program, no progress on entitlements, loose money policies. Bernanke is heading to become another G. William Miller.

Bush wouldn't be so vulnerable to the donks if he weren't helping them so much.

Posted by Nimble Spemble 2007-11-08 08:40|| 2007-11-08 08:40|| Front Page Top

#24 It's all about one thing, financial discipline. And we don't have it.

Who does? The Euros? Humor.

It's the story of the bear chasing a group of people. You don't have to be faster than the bear, just one other person. The problem for everyone else is that we have the keys to the car.

Posted by Procopius2k 2007-11-08 09:14|| 2007-11-08 09:14|| Front Page Top

#25 Who does? The Euros? Humor.

Not Humor; Truth. The EUros are doing a better job of keeping their currency house in order than we. Or do you think all those people selling dollars for EUros are wrong? They're betting real money, you're just ranting. That should tell you something about how badly we are doing.

Posted by Nimble Spemble 2007-11-08 09:21|| 2007-11-08 09:21|| Front Page Top

#26 Nimblle,

You just made the same mistake that has been discussed up thread.

Tax cuts DON'T HURT!!!! The problem is the other area SPENDING, and there I agree with you.

If there was one REALLY big mistake Bush made after 9/11 it was not using that as a lever to demand mega-cuts in Federal spending. That's what Americans should have been asked to sacrifice.

Posted by AlanC 2007-11-08 09:34|| 2007-11-08 09:34|| Front Page Top

#27 I like tax cuts, too. But it really doesn't matter whether the borrowing comes about from to little income or too much outgo. Too much uncontrolled borrowing is a bad thing and evidence of deeper underlying problems. People are losing confidence in the dollar as a store of value.

Posted by Nimble Spemble 2007-11-08 09:38|| 2007-11-08 09:38|| Front Page Top

#28 Numbers from the Economist in 2003, but if you have better numbers, show them -

Country...........Gov't Spending/GDP.........Budget Balance...............Public Debt/GDP
Canada.....................19.02%...........................0.70% surplus........................77.00%
France......................24.28%..........................4.10% deficit...........................69.10%
Germany..................19.70%...........................4.00% deficit..........................63.90%
Italy..........................19.20%...........................2.30% deficit........................106.67%
Japan........................17.50%...........................7.42% deficit.........................154.62%
UK.............................20.50%..........................3.10% deficit...........................51.40%
USA...........................18.72%...........................3.46% deficit..........................62.43%
Mean.........................19.85%...........................3.38% deficit..........................83.59%
Median.....................19.20%...........................3.46% deficit..........................69.10%

Posted by Procopius2k 2007-11-08 09:45|| 2007-11-08 09:45|| Front Page Top

#29 We are the hegemon. The same rules don't apply to us as to the bit players. That's why they take all that cash from us and hold it as reserves, because they have confidence that we are the big dog and we will back them up because we've got the power to run things. Red China does not hold $1,000,000,000,000,000 in debt from any of those other countries. And that amount is growing by hundreds of billions each year.

That confidence in the hegemon that underlies the system being shaken. That's what this is about, confidence. Everybody is overleveraged. But they are counting on the US to support the system when it starts to strain. If we don't, we won't get to be the hegemon any longer.

And don't think the Chinese won't continue to put pressure on the dollar right through to the election in 11/08. They want their lap dog back in the WH and they are willing to play a little chicken on the way. And their nerves won't give out nearly as quickly as the nerves of the bankers who have only started to write off all their sub-prime sins.

This is not about any rational analysis of facts. It is about what frightened little men do when they are scared by the bogey man in the dark of night. And that is what is happening to bankers all over the world right now. Lowering US interest rates may have steadied Wall Street's nerves for a day or two, but it has scared everyone else to the point where they'll do dumb things:

Commodore Schrepke: This is insane!
Captain Finlander: Now don't worry, Commodore. The Bedford'll never fire first. But if he fires one, I'll fire one.
Ensign Ralston: Fire One.

Posted by Nimble Spemble 2007-11-08 10:32|| 2007-11-08 10:32|| Front Page Top

#30 They're betting real money, you're just ranting.

And may I point out that the banks through their corporate fronts also bet money and lost their bets big time in the subprime game. Just because people/corporations play with creative accounting at the billions level doesn't make them necessarily smarter.

Posted by Procopius2k 2007-11-08 10:37|| 2007-11-08 10:37|| Front Page Top

#31 if you devalue the dollar (ala Argentina) say give everyone 10 cents on the dollar, then who gets the shaft, Bush and Co. could easily afford this devaluation, they would still be very Rich. The US middle class, the ones who put checks and balences into our society would be pretty much eliminated and with them those Pesky constraints to unlimited corpoRATE " PROFIT TAKING"
get ready to get screwed by the elites in the USA, but remember, you did it to yourselves.

Posted by Whinetch the Galactic Hero9107 2007-11-08 10:46|| 2007-11-08 10:46|| Front Page Top

#32 This is Bush's biggest problem and it was the best thing about Clinton; the Dollar. This is why big business has left Bush and the Republicans. They have become the weak currency party.

Funny, I remember the interest rates dropping in the 90's. I remember Ross Perot saying we needed to increase interest rates back in the Bush/Clinton/Perot election and then the interest rates falling steadily for 8 years when Clinton was in office.

For the BDS folks all evils can be solved by blaming Bush and they never stop to think maybe we need to work together as a nation rather than simply blame Bush and the Republicans. Both sides of the aisle are working against us. Clinton and the Dems won't save you and until you realize that it has become the People v/s the Princes in congress (both sides) we are just going to squabble and not come up with real solutions.

Posted by Glaling Turkeyneck1651 2007-11-08 12:05|| 2007-11-08 12:05|| Front Page Top

#33 For my trouble, I had two posters threaten physical harm to me and my family.

no mo uro, I vaguely remember when you wrote that. On behalf of the ladies and gentlemen of Rantburg, I apologize for the threats. That kind of thing is not acceptable.

Posted by trailing wife">trailing wife 2007-11-08 12:35|| 2007-11-08 12:35|| Front Page Top

#34 Clinton's ONLY claim to economic fame was that he happened to be in office when the U.S. was the only place mass producing computers and peripherals and software, and the rest of the world had to buy them from us. Period. Had he been in office and raised taxes and the regulatory burden the way he did without the huge sales in small computers and ancillary technology that occurred, our economy would have tanked.

Anyone who gives credit to Clinton any credit for the affluence of the 1990's simply isn't seeing the big picture. The power of the dollar would have been even stronger then (and now) if interest rates were allowed to rise to cover the true cost of borrowing money. With increasingly centralized and politicized banking, that has become less likely.

We run the risk of becoming stagnant like Japan if we don't get interest rates up into a range that represents the real cost of money.

Posted by no mo uro 2007-11-08 12:48|| 2007-11-08 12:48|| Front Page Top

#35 Clinton and Rubin ran a strong dollar policy because the bond market was read to whack them if they didn't. Bush hjas run a weak dollar policy to stimulate exports. Now it's biting him in the ass.

Both Clinton and Bush benefited primarily from being in office while the baby boomers were in their prime productivity years while there were relatively few younger inexperienced workers entering. This is a benefit that will disappear beginning on the watch of the next incumbent.

Posted by Nimble Spemble 2007-11-08 13:49|| 2007-11-08 13:49|| Front Page Top

#36 This is not about any rational analysis of facts. It is about what frightened little men do when they are scared by the bogey man in the dark of night.

Nail. Head. Markets are driven by Fear or Greed! Right now Fear is in the drivers seat as a result of years of uncontrolled Greed. The chickens are indeed coming home to roost.

Posted by Hupolusing Grundy3839 2007-11-08 14:19|| 2007-11-08 14:19|| Front Page Top

#37 Once the dollar's status as the world's reserve currency is lost regaining it will be difficult to impossible. There is still time to correct the slide, but it would require belt tightening on a scale that the American people may not support.
The value of the dollar was tied to the price of oil after going off the gold standard, leaving us at the mercy of our good friends, the Saudis and others in the neighborhood. Terrorist disruption in supply could cripple the global economy. We need to find a new standard to peg the dollar to so we can afford to become energy independent and prosper from the fruits of our own labor.

Posted by Danielle 2007-11-08 14:47|| 2007-11-08 14:47|| Front Page Top

#38 "The value of the dollar was tied to the price of oil after going off the gold standard"
I don't think so.

Posted by Fester Whotle1187 2007-11-08 15:03|| 2007-11-08 15:03|| Front Page Top

#39 I have no problem with a lower dollar. It will do wonders for our deficit and drive production back to the USA.

Unfortunately, if there was a rush to get out of Treasuries, the result would be a spike in long term rates, inflicting further damage on the real estate market. (More likely, a slower trend would be overshadowed by the shaky structure of that market which is contributing to most of the downside momentum, resulting in defensive rate cuts by the Fed.)

On a PPP basis, we have a long way to go.

However, it's all bears out there right now. Get ready for a nice rally.

Posted by KBK 2007-11-08 17:24|| 2007-11-08 17:24|| Front Page Top

#40 The deficit keeps falling because of high tax revenues. The result, as I understand it, is that fewer Treasuries have been sold -- I believe the longer term units are no longer available at all. If that's so, isn't the U.S. less exposed than it would have been previously if other countries really do dispose of some of their dollar holdings?

Posted by trailing wife">trailing wife 2007-11-08 19:43|| 2007-11-08 19:43|| Front Page Top

#41 I was referring to the current account deficit, not the federal budget deficit. But you are correct, at the time of the tax cut debate, a surplus was expected to cause problems in the financial markets:

Interestingly, Mr. Greenspan is concerned that the federal budget surplus will be destroyed too quickly, ultimately forcing the Treasury to offer premium prices to buy out foreign investors and holders of 30-year bonds who don't want to sell. The Fed also would face constraints in operating monetary policy: Normally, the Fed buys Treasury bonds to create money and sells them to soak it up. The Fed chairman further fears that the Treasury, having wiped out the national debt, would come trampling into the capital markets to invest its surpluses in private securities. Its judgments of whether to buy, say, AT&T or Microsoft, might just possibly be politically motivated.

Is Bush's Tax Cut Big Enough?

Posted by KBK 2007-11-08 22:27|| 2007-11-08 22:27|| Front Page Top

#42 Oh, international trade? You're getting into deeper waters than I can swim in, KBK. But as far as I do understand, a lower dollar means the other countries are more likely to buy our stuff, and we're less likely to buy theirs, yes? Balance of payments and things? (Trailing daughter #2 wants to study economics, and plans to manage my finances after Mr. Wife dies. We all feel safer that way.)

Posted by trailing wife">trailing wife 2007-11-08 22:49|| 2007-11-08 22:49|| Front Page Top

#43 Look folks, here's the problem:

The 2nd largest oil exporter on the planet (Iran) decided several months ago not to take US dollars for payment for oil. This has forced countries to sell their dollars in order to pay Iran.

This pushes the dollar lower in relation to the other currencies that Iran accepts for oil. This means that while foreign oil is more expensive in dollars, US goods become cheaper to foreign countries.

This also causes currencies like the Euro to rise which makes goods priced in Euros more expensive for non-Euro countries.

We can build a dozen new nuclear plants and get around the higher cost of oil and be left with US goods being cheaper causing a manufacturing boom here.

Iran is just doing this to piss off the US and Europe for our sanctions. It is temporary. At some point Iran will be flush with Euros and need dollars for something ... probably to pay for imported gasoline and diesel ... and so they will then need to buy dollars and things will equalize again. Right now it is a big game of chicken with the US and Iran staring at each other seeing who will blink first. Will the US give up sanctions if the dollar falls far enough or will Iran finally get sick from a diet of so many Euros ... the world waits the outcome.

Posted by crosspatch 2007-11-08 23:17|| 2007-11-08 23:17|| Front Page Top

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