OPEC Dumps the Dollar

It looks like everybody is jumping ship and dumping the dollar.

Forcasters predict a further decline before the dollar stabilizes early in 05.


December 7, 2004
NewsMax

Quietly but with malice, OPEC cartel nations have been dumping the U.S. dollar over the past three years, according to the Bank for International Settlements (BIS).

The dollar has been falling dramatically in recent years -- reaching new lows against the Euro and other currencies.

One key culprit may be OPEC states who have traditionally denominated their transactions in U.S. dollars -- but are now moving to the Euro in what the BIS says is a "subtle but noticeable" shift.

www.newsmax.com...

Weak Dollar Threatens to Upset Equilibrium

December 6, 2004
By JIM LANDERS
The Dallas Morning News

WASHINGTON � A weakening dollar is raising alarms.

www.dallasnews.com...

Is the delicate balance that has kept the global economy going despite jaw-dropping U.S. debts about to give way? A growing number of economists think so.

Harvard University president Larry Summers has dubbed this the "balance of financial terror." He and other economists fear a crisis that will lower U.S. living standards.

The current arrangement, where America buys and borrows while Asia sells and saves, is creaking under the weight of exchange rates that many analysts say are coming apart.

If the analysts are right, American consumers may soon confront sticker shock at favorite retailers such as Wal-Mart and Home Depot. American automakers, on the other hand, might get a chance to climb out of a bathtub of red ink.

The Bush administration says don't panic: White House advisers say global debts and exchange rates would sort out smoothly if the rest of the global economy would follow the growth path America is walking.

Economists with Germany's Deutsche Bank say recycling dollars from America to Asia and back again will keep rewarding both sides. Michael Dooley, David Folkerts-Landau and Peter Garber see it as a new Bretton Woods Agreement, an international system devised in 1944 to stabilize exchange rates that lasted for almost 30 years





[edit on 7-12-2004 by SIRR1]

It's a problem for us Europeans, I believe the Saoudi always had the exclusive advantage to get informed in advance when the American Bank would lower/up the interest rates or otherwise influence the dollarvalue, so the Saoudi could trade with knowledge in advance (a practice wich wouldn't be allowed on any selfrespecting stockauction) , likewise, I would expect the Saoudi selling the dollar with the explicit approval and or
maybe even encouraged by Bush advisors, as it puts great pressure on us Europeans, wich might be persuaded to take a certain stanse regarding the possible lifting of the weapon-trade embargo against china and or the backing of an invasion in Iran.

As expected the Dutch are very sensitive for this kind of persuasion, hence we quietly follow (as not to upset our milk and eggs trade with iran) the Bush doctrine, or is it the other way around ?



[edit on 7-12-2004 by Countermeasures]

Hate to say it but, Alex Jones has been talking about this for the past 2 weeks on his show...

I think soon we are screwed, better buy some gold and silver before hell breaks loose..

Originally posted by SIRR1
The Bush administration says don't panic: White House advisers say global debts and exchange rates would sort out smoothly if the rest of the global economy would follow the growth path America is walking.

What growth path?

I think soon we are screwed, better buy some gold and silver before hell breaks loose

Is it not against the law for US citizens to own Gold?

Perfectly legal to own gold, and a very good idea these days. Silver is looking very healthy right now too.

In 1975, it became legal to own gold and silver coins again, though the President still has powers of confiscation during an economic emergency. Collectable coins are exempt from confiscation.

Ahh...In 1933 you had the Gold Surrender Act, which prohibited US citizens hoarding gold, which was repealed in 1975. But the Government still has the power to confiscate all Gold should the need arise (as in the Great Depression)

Some history of US currency

This is just one of many sites. I grabbed it for reference, but feel free to google it if you like.

If the govt. got any ones gold, the person should not have to pay income tax for the rest of their lives! That or free ____ for life.

That or free ____ for life.

Beer!!!

Originally posted by Blackout

Originally posted by SIRR1
The Bush administration says don't panic: White House advisers say global debts and exchange rates would sort out smoothly if the rest of the global economy would follow the growth path America is walking.

What growth path?

The US economy is growing faster then that of almost every country in the UK...I know I know, you probably don't want to hear that, but it is a fact.

Excellent news. The US will be bankrupt soon.

I can't see the US going bankrupt any time soon Mokuhadzushi although opec dumping the dollar won't do their economy much good. There is more than just oil to add to the value of the dollar though, they are world leaders in almost every technological industry and American companies own many assets abroad controlling world finance.

Excellent news. The US will be bankrupt soon.

If that were true, I doubt you'd be happy....as then you'd REALLY see some US Imperialism, hehe....

Excellent news. The US will be bankrupt soon.

You know Mokuhadzushi, you are truly one of the most annoying posters I've seen here. I don't know if you're just an act that likes to rile everyone up, or if you are for real.

I think Gazrok is right, If the usa would no longer be able to buy oil, they would simply get it for free and invade Venezuela or something.

All bets would be off and nuclear blackmail would be part of usa strategy, the usa would become the wheel around the axis of evil.

[edit on 8-12-2004 by Countermeasures]

[edit on 8-12-2004 by Countermeasures]

Ahh...In 1933 you had the Gold Surrender Act, which prohibited US citizens hoarding gold, which was repealed in 1975. But the Government still has the power to confiscate all Gold should the need arise (as in the Great Depression)

Some history of US currency

This is just one of many sites. I grabbed it for reference, but feel free to google it if you like.

The vast majority of the worlds gold is not in bar or coin form or even in the hands of any goverment. By far the biggest slice of the worlds gold is in private jewelry.

Seizure would be an enforcement nightmare Alot of peoplethat invest in gold alredy dont trust the goverment.Would they timidly turn in their gold at the government's call? Hardly

And with a 100 million+ gun owners in the US they aint going house to house to confiscate peoples gold jewelry any time soon.

Also there is pretty much no when you buy gold, regardless whether it is bullion, numismatic, or jewelry which would make it hard to even track the gold down.

[edit on 8-12-2004 by ShadowXIX]

[edit on 8-12-2004 by ShadowXIX]

Originally posted by American Mad ManThe US economy is growing faster then that of almost every country in the UK...I know I know, you probably don't want to hear that, but it is a fact.

Hahahaha please tell me you are joking! You can't seriously still believe that with all the evidence from multiple sources saying the exact opposite.

The US is spiraling downward while the rest of the world laughs. Its about time too

I agree that the US will be going bankrupt also. I just see no way out but to default on there loans. And since most are comeing from out side the US now, we will be screwing the rest of the world as much as our selves.

I agree that the US will go bank rupt also. I just see no way out except to default on there loans. And since most of the loans are comeing from out side the US, they will be screwing the rest of the world as well as them selves.

Over the last year I've been drawn more and more to the financial sections of the newspapers I read, following oil and the US dollar. It certainly has become quite interesting recently.

I really don't think that it's helpful to describe the natural effects of market forces as malicious but that it is being described that way is a reflection of the times we live in.

OPEC countries haven't substantially switched their national reserves from US dollars to Euros they've just prudently diversified as an equally strong currency has emerged. However, there is talk now of a switch which would result in the US dollar halving in value. This isn't malicious it's just market forces. Why should these countries sell their oil for a dollar that is worth less and less when they can sell it for Euros which are worth more and more ? They'd be dumb not to.

A few things though.

1/ The US economy is growing at the moment but that should be judged after a period of retraction.

2/ The US stock market is rising but really it's rise is just a bulwark against inflation for those that hold it. The stock is valued in dollars and so as the dollar's value falls more dollars are needed to buy the stock. This is actually a sign of inflation not a real increase in the value of the stock.

3/ Gold actually just took a tumble yesterday.It was a realignment.It is still high but not as high as it was earlier this week.Other precious metals (silver,paladium) also fell.

The basic reason for the dollars fall has been it's huge twin deficits though the Bush administration are keen to blame China pegging their currency to the dollar and it's need to revalue and needed reforms in the Eurozone.

It appears to be the US policy just to let the dollar float while making no effort to defend it, by raising interests rates for instance.

The short term advantages of a policy like this is that US exports become cheaper in Europe and European imports become more expensive. This should mean that employment should rise, better profits for US companies meaning an increased tax renenue.

The short term disadvantage is that foreign investors are buying up US stock on the cheap right now.

The medium term disadvantages are rising inflation, rising interest rates, and if recession hits Europe and Japan as a consequence of this policy then a smaller market for US exports and a rise in US unemployment,and a knock US recession. Who knows,worst case scenario world depression

My view is that OPEC will not move wholesale to the Euro primarily because Saudi Arabia wouldn't want to upset the Bush Administration even if it means they're losing money and as Saudi Arabia have 25% of the world's oil reserve any move without them wouldn't be conclusive but a small scale shift continuing seems likely.

Another point to make is that Europe may act to protect their economies by import tarriffs or by other means. Remember the UK has no say in European currency strategy as it is not a member of the Euro and can't force a consilitory policy. France and Germany dominate it and they may feel that the US policy is a willful attack on their own weak ( low growth) economies.

Anyway, those are my views and observations.

[edit on 9-12-2004 by John bull 1]