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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (168995)	8/14/2005 11:16:38 PM
From: bentway	Read Replies (1) \| Respond to of 281500

Again, call me cynical, but I don't agree. I think as far as REAL reasons go, Iraq demanding euros for oil ranked ABOVE WMD's and "freeing the Iraqi people". I think those two "reasons" were (and are) strictly for public consumption. Paul Wolfowitz ADMITTED that WMD's were seen as the easiest way to "sell" the American people on the war, with drummed up fear post 9/11.

To: neolib who wrote (168995)	8/14/2005 11:17:14 PM
From: bentway	Respond to of 281500

dupe

To: neolib who wrote (168995)	8/18/2005 11:23:57 AM
From: Sun Tzu	Read Replies (2) \| Respond to of 281500

I think you highly underestimate the value of free money printing machine the US got thanks to the Saudis. USA is the only country in the world where its foreign debt is denominated in its own currency. Which is why you never ever see Greenspan complain about our foreign debt. In fact, he supports its increase whole heartedly because he knows when it hits the fan, US can always print more money to pay it off. US power rests on two pillars, each strengthening the other: Pentagon and USD. This is not to say that without owning the world's de facto currency printing machine America would be in rubbles. But it would be closer to Canada, UK, and France than where it is now. The beginning of the end for USD is when OPEC begins to quote Oil in Euro. I had expected that to be much later, but I see now that fairly soon I may have to convert everything out of USD. To see this more clearly, consider that USD is a fiat currency. This is to say it has no intrinsic value. The only reason anyone would want a fiat currency is to exchange it for other goods. For most of the world, the only place where their currency holds value is within the originating country, but thanks to OPEC, this is not so for US of A. Every major country has to have a positive balance of trade to maintain a strong fiat currency. But America has had negative trade balance for a very long time (see census.gov ) So the question is why isn't USD worth a lot less (think along the lines of dime on the dollar)? The answer is that you don't have to spend the dollar only in America; you can buy oil with it from all those countries who supposedly hate America. What will USD be worthy when other countries ask for something else in exchange for hard goods they sell? Find the answer to that, then multiply its difference by all current dollar denominated assets and you will get an idea about how important it is to keep the kids from shouting "the emperor has no cloths". ST