The truth is, that even the control of oil is not nearly as critical to the US as maintaining it’s continued dominance in the exchange of oil in dollars. If Iran is allowed to open its oil bourse (exchange) in March and openly compete with the US’s monopoly on trading oil in petrodollars, the central banks across the globe will dump hundreds of billions of US dollars overnight, and the American economy will disappear beneath the waves. This is not fiction.
Of course the Iran hoopla is all about oil, just like Iraq is. It's as simple as this: - Bush declares Iran an axis of evil. - Bush takes over Iraq. - Iraq puts nukes on the fast track to defend their autonomy. - Iraq w/ nukes gives Bush the pretext he needs to take over Iran. Unfortunately for Bush, the quagmire in Iraq has put his plans for attacked Iran on hold. Damn those lazy Iraq soldiers the US is paying 35 cents an hour! If only they'd be more willing to die for Bush's oil buddies!
Iraq's oil-for-Euros thing as Bush's reason for that country's invasion is becoming a pretty widely accepted opinion. If the US is having so much trouble in controlling Iraq, they don't have a chance of invading and occupying Iran. I think the dollar is doomed.
i don't think the dollar will be doomed overnight. you still need the oil buying and oil selling countries to ACCEPT and TRADE in euros. they won't just suddenly dump the dollar overnight. if the bourse is successful and the Americans don't try to shut it down (by force), it'll be a slow and gradual death. dumping the dollar overnight will cause a world economic meltdown that might even hurt the countries that dump the dollar.
Well, you see, as soon as those countries (not all of which are the best of friends with the US) see another country trading in Euros (which is a stronger currency) unopposed they will no doubt follow....the value of the dollar will plummet....and its value will have to be tied quickly to something else, or a new currency hastily adopted. Bear in mind that I am just an average internet loudmouth though, and not any kind of expert on the matter.
If Bush decides to actually INVADE and OCCUPY IRan, instead of just preventing them developing a nuke, then he and his cronies are truly stupid, and will fail miserable - if they havent failed already.
Iran seems to have thrice the population as that of Iraq. 68 million. The cia factobook states:Manpower fit for military service:males age 18-49: 15,665,725 (2005 est.) Calculate how many men had military training in Iraq. It is I think about 4 times as big as Iraq. Think about how stretched the military might if the US already is in Iraq. These problems will not go away soon. Imagine how difficult it will be to take on Iran. Imagine how the region will react to an invasion of Iran. Imagine how the world will react if Iran is going to bombed without UN mandate. Of course the US has gotten away with so much, but I'd imagine some time things might go wrong. And maybe this time it will be it. Is north korea going to just sit there? They are after all the remaining part of the axis of evil. They might feel they are next. Is there going to be a preemptive strike from them? Is israel going to crack? Pakistan? It feels like russian roulette to me. Unless you believe in your own arrogance.
Sure it's fiction. Pure fiction, in fact. Have you even considered that the "hundreds of billions of US dollars" you are talking about aren't simply sitting in bank accounts and ready to be converted? They're invested - which makes it an entirely different ball game than the gloom-and-doom you're predicting.
not entirely. it's just simply macro-economics. if there exists a market for petroleum in euros (which is a more stable currency for NOW than the american dollar), countries may want to increase their supply of euros to be able to buy the petroleum. with an increased supply of euros and no need to buy petroleum in the less stable american dollar, what's the point in having a huge stock of american dollars? they'll sell it off, causing the value of the US dollar to fall. of course this is theoretical. whether or not it actually happens remains to be seen. less than 30 days until the initiation of the oil bourse. i'm counting down!
My point is precisely this: they do NOT have "a huge stock of American dollars." The vast majority of that money is tied up in investments. It takes more than just "wanting to" to convert money tied up in any investment into a different foreign currency. Simply doesn't happen. You'd have to first sell the investment (assuming a willing buyer and a favorable price) and then convert the cash. And then what - reinvest again? Possible, but not overnight as he originally claimed.
You are correct that most of the dollars held by China,etc. are invested. They have bought various US Treasury bonds etc (best thought of as US's IOUs.), but you are very wrong to think they can not be sold rapidly. Their price changes minute-by-minute to reflect supply and demand and huge volumes trade daily. International finance markets are very well developed. Interest and bond prices are inversely related. If many central banks were to sell dollar demoninated bonds, the price of the Treasury bonds would drop and interest rates of all US IOUs would rise - very bad for you if you have an Adjustible Rate Mortgage. At higher intest rates, the current debt will grow more rapidly. The dollars raised by sale of bonds need not be used to buy more US IOUs, as is common today. They can be used to buy oil leases, gold, Euros, coal fields, copper deposits, etc. - things that are likely to hold their value if dollar is collapsing (and they will be - why hold an asset that is rapidly becoming worth less each day?) The financial world is engaged in a great game of chicken. As long as others are willing to play (buy US bonds) it is good to do so as you earn intestest and have asset that can be quickly sold for alternative investments. It will not take much to end this game now that US debt is so high. Once the run on the dollar starts, you will see just how quickly these "investments" can be converted to other assets.
