PDA

View Full Version : If the Dollar was no longer "backed" by oil...



xer0xed
08-08-2006, 03:27 PM
what would be the immediate effect on the US economy?

Curious on your opinions/analysis.

Dr Triceps
08-08-2006, 04:54 PM
Huge inflation, plus the higher gas cost. I would guess we'd be paying $4-4.50 a gallon. It would be worse than the mid-70's inflation era.
It would be a terrible time to be retirement age.

xer0xed
08-08-2006, 04:57 PM
Huge inflation, plus the higher gas cost. I would guess we'd be paying $4-4.50 a gallon. It would be worse than the mid-70's inflation era.
It would be a terrible time to be retirement age.

Oh, wow. But no big depression or anything?

photomasterx
08-08-2006, 04:58 PM
Also don't forget that China would then be forced to dump all American money/bonds and whatever else it has.

xer0xed
08-08-2006, 05:04 PM
Also don't forget that China would then be forced to dump all American money/bonds and whatever else it has.

So how would that impact the avg. American?

EDC
08-08-2006, 05:31 PM
Inflation will be a problem as the dollar drops and imports become more expensive. Recession in the short term but it will help sort out the trade defecit. But there are several factors behind that, oil no longer being priced in US dollars is one of them.

I expect 2010-2025 to be similar to the seventies but past 2025 America will be on a more solid economic footing.

IraHays
08-08-2006, 05:31 PM
Backed by oil?

xer0xed
08-08-2006, 05:37 PM
Backed by oil?

Yes.

IraHays
08-08-2006, 05:39 PM
Sorry, I just need this explained to me. Was this discussed on another thread?

xer0xed
08-08-2006, 05:41 PM
Sorry, I just need this explained to me. Was this discussed on another thread?

There was a thread discussing it. Basically, the dollar is so valuable world-wide mostly because it is the currency that is used for trading oil. Countries like Iran and Venezuela are now trying to switch oil trade to the Euro (Saddam tried to do it also in 2000, but he's not around anymore ;) ). So that's the basic premise of this question.

EDC
08-08-2006, 06:16 PM
There was a thread discussing it. Basically, the dollar is so valuable world-wide mostly because it is the currency that is used for trading oil. Countries like Iran and Venezuela are now trying to switch oil trade to the Euro (Saddam tried to do it also in 2000, but he's not around anymore ;) ). So that's the basic premise of this question.

But access to oil is only one part of what makes the dollar valuable. Most of its value internationally comes from the desire to access the american domestic market.

lucubration.
08-08-2006, 06:36 PM
There was a thread discussing it. Basically, the dollar is so valuable world-wide mostly because it is the currency that is used for trading oil. Countries like Iran and Venezuela are now trying to switch oil trade to the Euro (Saddam tried to do it also in 2000, but he's not around anymore ;) ). So that's the basic premise of this question.
Yes,

Someone here needs to write a publication and submit it to scholarly journals as they are so brilliant.

Give me an f'ing break.

Dr Triceps
08-08-2006, 07:06 PM
We could have a depression if we keep having the housing market tank and second loan forclosures combined with the oil crisis. Everything is turning for the worse right now. Not to mention all of the factories moving out of country. Americans are becoming less dependant on Americans.

lucubration.
08-08-2006, 07:07 PM
We could have a depression if we keep having the housing market tank and second loan forclosures combined with the oil crisis. Everything is turning for the worse right now. Not to mention all of the factories moving out of country. Americans are becoming less dependant on Americans.
Politicians never considered that efficient allocation under free trade doesn't allow for nationalism...

Eventually we will all have to move to where we are most needed, irregardless of country...

xer0xed
08-08-2006, 07:25 PM
Yes,

Someone here needs to write a publication and submit it to scholarly journals as they are so brilliant.

Give me an f'ing break.

Already been done.

http://www.house.gov/paul/congrec/congrec2006/cr021506.htm

lucubration.
08-08-2006, 08:01 PM
Already been done.

http://www.house.gov/paul/congrec/congrec2006/cr021506.htm

Not a scholarly journal but I will take a look.

xer0xed
08-08-2006, 08:02 PM
Not a scholarly journal but I will take a look.

I guess the house website would be less credible to you than a scholarly journal, haha. Actually, I wouldn't blame you. ;p

lucubration.
08-08-2006, 08:07 PM
I guess the house website would be less credible to you than a scholarly journal, haha. Actually, I wouldn't blame you. ;p

Yes, most of them lack any training in economics and many in basic business.

The proof is in the budget...

xer0xed
08-08-2006, 09:06 PM
Yes, most of them lack any training in economics and many in basic business.

The proof is in the budget...

They're printing and spending money out the yazoo. We accumulated a 3.5 trillion dollar deficit just last year that was largely unreported. Some "conservative" Bush is, huh? ;)

lucubration.
08-08-2006, 09:27 PM
They're printing and spending money out the yazoo. We accumulated a 3.5 trillion dollar deficit just last year that was largely unreported. Some "conservative" Bush is, huh? ;)
Oh, it's reported alot of they never post graphs for the idiots that really shows a chronological progression but most of the idiots in the country would rather bitch out the Fed raising the discount rate. They can't figure out that money doesn't grow on trees....

xer0xed
08-08-2006, 09:45 PM
Oh, it's reported alot of they never post graphs for the idiots that really shows a chronological progression but most of the idiots in the country would rather bitch out the Fed raising the discount rate. They can't figure out that money doesn't grow on trees....

They spend, spend, spend tommorrow's citizens into financial slavery.

lucubration.
08-08-2006, 10:01 PM
They spend, spend, spend tommorrow's citizens into financial slavery.
or foreign financial take-over...

xer0xed
08-08-2006, 10:02 PM
or foreign financial take-over...

Exactly.

EDC
08-09-2006, 01:08 AM
You know as bad as the US debt is, when you compare it to GDP it ain't half bad compared to alot of other countries.

off the top of my head the

Japan is around 100%
US and France are at 66% (debt is 66% as big as GDP)
Britain and Sweden are around 50%
Canada is at 70%
China 25%

MantisShrimp
08-09-2006, 01:27 AM
Don't be silly y0, the dollar is pegged against one thing and one thing only...freedom

MantisShrimp
08-09-2006, 01:35 AM
Politicians never considered that efficient allocation under free trade doesn't allow for nationalism...

Eventually we will all have to move to where we are most needed, irregardless of country...

I think they consider it, and understand it. It's just political doublespeak, the equating of opposites for the purpose of taking advantage of the stupid. They use nationalism as a propaganda tool for gaining consent toward the military and economic expansionism, and then they use globalism for the true economics of capitalism. In other words, it's a sort of equivocal use of the evocative concept of freedom, with the net result of freedom for "us", not freedom for "you". And the "us" is never defined carefully, so that everyone may think they are talking about them.

Jeremy1
08-09-2006, 06:47 AM
what would be the immediate effect on the US economy?

Curious on your opinions/analysis.
If this happens, the U.S. will no longer be able to finance it's debt as it has been using T bills. The demand for the dollar will fall as will the liquidity and value thus wreaking havoc on the economy.

Diesel66
08-09-2006, 07:32 AM
You know as bad as the US debt is, when you compare it to GDP it ain't half bad compared to alot of other countries.

Or even compared to our past debt. The deficeit in 1944 was outrageous. Even in the mid 70s it was ~10%. Today it is around 4%

xer0xed
08-09-2006, 08:01 AM
You know as bad as the US debt is, when you compare it to GDP it ain't half bad compared to alot of other countries.

off the top of my head the

Japan is around 100%
US and France are at 66% (debt is 66% as big as GDP)
Britain and Sweden are around 50%
Canada is at 70%
China 25%

Our national debt is over $11 trillion... basically exceeding our GDP.

xer0xed
08-09-2006, 08:05 AM
I think they consider it, and understand it. It's just political doublespeak, the equating of opposites for the purpose of taking advantage of the stupid. They use nationalism as a propaganda tool for gaining consent toward the military and economic expansionism, and then they use globalism for the true economics of capitalism. In other words, it's a sort of equivocal use of the evocative concept of freedom, with the net result of freedom for "us", not freedom for "you". And the "us" is never defined carefully, so that everyone may think they are talking about them.

http://www.federalreserve.gov/releases/lbr/current/default.htm

*checks out the Foreign Branches column*

"Us" couldn't be the top three banks in the Federal Reserve...? ;)

IraHays
08-09-2006, 08:20 AM
"BOTTOM-LINE - - DEBT SUMMARY TABLE
AMERICA'S TOTAL DEBT
- $40 Trillion -
- add another $44 trillion for contingent Social Security/Medicare"

http://mwhodges.home.att.net/debt_b.htm

Food for thought

xer0xed
08-09-2006, 08:28 AM
"BOTTOM-LINE - - DEBT SUMMARY TABLE
AMERICA'S TOTAL DEBT
- $40 Trillion -
- add another $44 trillion for contingent Social Security/Medicare"

http://mwhodges.home.att.net/debt_b.htm

Food for thought

Wow.

EDC
08-09-2006, 01:34 PM
Our national debt is over $11 trillion... basically exceeding our GDP.

most economists say the debt to GDP ratio is around 65%. but you guys believe accounting methods hide the real debt so i see where you're coming from. i also won't argue the point cause i know next to nothing about accounting

xer0xed
08-09-2006, 01:37 PM
most economists say the debt to GDP ratio is around 65%. but you guys believe accounting methods hide the real debt so i see where you're coming from. i also won't argue the point cause i know next to nothing about accounting

http://www.usatoday.com/news/washington/2006-08-02-deficit-usat_x.htm

2bbig
08-09-2006, 01:49 PM
I thought the dollars strength came from the Countries Gold reserves?

xer0xed
08-09-2006, 01:53 PM
I thought the dollars strength came from the Countries Gold reserves?

Many people actually believe that, 2bbig. But, we were taken off the Gold Standard a while back. And long before that the Federal Reserve Act of 1913 was passed allowing the government combined with the largest banking corporations to produce money. Our money is fiat currency, backed by nothing but oil worldwide and the "trust of the American people" at home. We have to sit and trust the government (and banks with monopolies over its issue) to guarantee the rarity of this Dollar that they produce in massive quantities every year. Gold no longer backs our money, as it probably should. Actually, Fort Knox might not even have any gold in it at this very moment.

2bbig
08-09-2006, 02:07 PM
Oh, thanks.
Thank god for electronics or I would be out of a job.