The Euro vs Dollar Conspiracy Theory: part II - "The P

[Huck]

Hello Everyone,

Synopsis:

For the ones who dont know, during the last few days, we hav been very busy debating about the impact of oil in american and world wide politics. The threads can be found here:

http://www.canadiancontent.net/forums/viewtopic.php?t=11380
http://www.canadiancontent.net/forums/viewtopic.php?t=10072


Some people believe that one of the reasons the USA are attacking countries such as iraq, iran and others may be based on the potential impact of the euro (or any other potential currency) on the american dollar and its economy. Others have well debated that the impact of the oil commodity on the american dollar is not significant enough to make any change and would not inspire the USA to risk wars for this cause.

To make a long story short, the conclusion was that no camp could really prove any of their points. I personally failed to bring any verifiable and trustable evidence that the euro could have a significant impact, and toro, the main oposition debator asked us to trust in his experience and conlcusions, although we were not provided his calculus and methodology that the euro was not significant enough. In the end, nothing was really proved and the myth or reality quesiton about the petroeuro is still well alive.


So, on my way home today, i realized that it was very important for us to answer this question. For everyone as the answer will highly impact our lives and our beliefs. It will also allow to know if the american government is telling the truth or not. For the americans on this board, it is even more important to know, as this is your own country, and our own people dying in the wars. Having the answer WILL makes us better and stronger citizens of the world. It will also help us make the goverments more transparent, by getting facts they never show us. It is one of the reasons we are on this board: what is the matrix neo?

The Idea:

I have a little project to propose. i dont know if anyone will wish to participate, but at least, i will have tried. :wink:

The only real way to find the answer once and for all is to build an economic model, which will allow us to see the impacts of various parameters on world economics.

In normal circumstances, this would be a tough task, but were are blessed with the luck of having a "university teacher of economics among other things that deals with CEOs, investors, etc.", Toro.

So, Toro, i would like to know if you would agree to share with us the model and calculations you used to tell us that the euro has no impact on US economy. Since you are a teacher, im sure you have a well defined procedure, and will know how to present it to us.

From there, we will be to build on it and be able to check the facts, add missign information, etc. which will allow us to test various scenarios. The goal is to create an "open source" model of world economics to validate the theory and help us see if there are impacts to the euro or not. Since toro is a university teacher, he will be able to assist us with data, procedures, etc. Of course, as the model expands, everyone will be welcome to double check the facts by themselves or with other economic geniuses so we can get the most accurate model.

Should the model ever need a computerized platform, this will not be a problem either.


So, in our quest for knowledge and the truth, is there anyone on this board ready to risk a little time to increase our value and comprehension of world economics and politics?? Would you like to know, once and for all, for a fact if the euro is the motivation for the middle east wars? Would you like to know how the world economy works? We can if we try...

So, anyone interrested in a little project for truth? Toro? Thanks for listening!!

 

[jimmoyer]

RE: The Euro vs Dollar Conspiracy Theory: part II - "T

All I know is if you have one world currency then
you need one world council that sets the prime interest
rate to control the supply of money.

I wonder if that kind of centralized power is any good.

And the euro least of all likes the dollar falling too rapidly since it adversely hurts European exports, and
the Europeans complained to Bush about letting the
dollar fall.

I'm all for you setting up the model.

 

[darkbeaver]

RE: The Euro vs Dollar Co

Me too.

 

[darkbeaver]

Re: The Euro vs Dollar Conspiracy Theory: part II - "T

From the Author
From author Morris Berman: When I published my previous book in 2000, I characterized the historical phase we were in as a "twilight" period, similar to Rome in the waning days of its late-empire phase. It seems to me that it is not entirely an exaggeration to suggest that since 2000 we have effectively transited from twilight to night, entered a new Dark Age. Thus there are a number of developments that can be characterized as frankly medieval: the triumph of religion over reason, and a progressive rollback of Enlightenment humanism; a massive breakdown of education and critical thinking (the statistics of which will probably strike the reader as surreal); the actual legalization of torture, and its widespread use by the American government; and the growing political and economic marginalization of the United States on the world stage. Equally sobering is that the vast majority of Americans are either ignorant of these developments or actually approve of them, bringing to mind the famous remark by Will Durant that "a great nation is not conquered from without until it has destroyed itself from within." Certainly, as one British colleague wrote me, the United States will be part of the future, but (he added) most of the future will take place outside of the United States. There is abundant evidence to indicate that our historical moment is passing, and that the zeitgeist, as it were, is moving on.

:lol:

 

[jimmoyer]

RE: The Euro vs Dollar Conspiracy Theory: part II - "T

That US power will surely wane, I agree.

But the rest of that is the baloney zeitgeist that
particular author repeats like a metronome.

 

[darkbeaver]

RE: The Euro vs Dollar Co

So are you disputing what he among many other learned Americans are saying?

 

[Toro]

Re: The Euro vs Dollar Conspiracy Theory: part II - "T

This is for everyone who is reading this thread for the very first time. If you believe that the US invaded Iraq to maintain dollar hegemony, understand what you are making is an economic argument. And if so, that means for you to fully understand the argument, you must understand economics. If you have never taken an economics class, you probably do not understand the basis for the argument.

Thank you.

Now, onward with the discussion.

First I am not a teacher.

Second, a teacher and a professor are two different things as a professor does research. I have never been a professor. Thus I cannot assist you in your modeling as I do not have the technical skills to do so.

Third, and for the record, I have periodically lectured in finance as a guest lecturer for graduate students in my area of expertise at one of the universities in the city where I live. I was offered my own class but declined.

Fourth, what you are proposing sounds like a multi-year task for a full tenured professor.

Fifth, its important to note that in the links you provided, there is no concrete evidence or facts to support the conclusion. What you provided was speculation, often from what appeared to be individuals who did not appear to be well versed in finance and economics, though admitedly I may be wrong on that as I cannot remember exactly who wrote what. And the links and footnotes used to back up the links offered appeared to be the same. What has been offered as a conclusion is merely conjecture . The facts upon which the conclusions are based on are not necessarily incorrect though, i.e. that the world central banks hold too many dollars and the debasement of the dollar is hurting those countries. However, I could put up a website and refute the charges one by one, while doing all the researching and linking, but frankly, I'm lazy and don't want to as it sounds like a lot of work.

Sixth, my knowledge lies in my experience and education, which has arisen not only from being an active participant in the capital markets, but also through discussions with many people as well many items I have read that are not, nor will they ever be on the Internet, or at least publicly accessible on the Internet. That, of course, leads to a credibility issue, since all you know me is as "Toro", and for all you know, I'm a 12 year old banging away on a keyboard in my parent's basement. Alas, that is a problem I'm just going to have to deal with. I'll let my postings speak for themselves.

Finally, I've been on Internet forums for less than a year, but this is a topic that I seem to have run up against every month or two, and frankly, I'm truly getting weary of it so I don't think I'll participate. I've already spent too much time on this over the last few days IMO, not that you are unworthy, but after awhile it becomes too much, (though I have a hard time resisting misinformation and debate and will likely take the bait more than I should). However, if I come across interesting articles or statistics or references, I'll post them here.

 

[Huck]

Re: The Euro vs Dollar Conspiracy Theory: part II - "T

First I am not a teacher.

Second, a teacher and a professor are two different things as a professor does research. I have never been a professor. Thus I cannot assist you in your modeling as I do not have the technical skills to do so.

Third, and for the record, I have periodically lectured in finance as a guest lecturer for graduate students in my area of expertise at one of the universities in the city where I live. I was offered my own class but declined.

Fourth, what you are proposing sounds like a multi-year task for a full tenured professor.

Fifth, its important to note that in the links you provided, there is no concrete evidence or facts to support the conclusion. What you provided was speculation, often from what appeared to be individuals who did not appear to be well versed in finance and economics, though admitedly I may be wrong on that as I cannot remember exactly who wrote what. And the links and footnotes used to back up the links offered appeared to be the same. What has been offered as a conclusion is merely conjecture . The facts upon which the conclusions are based on are not necessarily incorrect though, i.e. that the world central banks hold too many dollars and the debasement of the dollar is hurting those countries. However, I could put up a website and refute the charges one by one, while doing all the researching and linking, but frankly, I'm lazy and don't want to as it sounds like a lot of work.

Sixth, my knowledge lies in my experience and education, which has arisen not only from being an active participant in the capital markets, but also through discussions with many people as well many items I have read that are not, nor will they ever be on the Internet, or at least publicly accessible on the Internet. That, of course, leads to a credibility issue, since all you know me is as "Toro", and for all you know, I'm a 12 year old banging away on a keyboard in my parent's basement. Alas, that is a problem I'm just going to have to deal with. I'll let my postings speak for themselves.

Finally, I've been on Internet forums for less than a year, but this is a topic that I seem to have run up against every month or two, and frankly, I'm truly getting weary of it so I don't think I'll participate. I've already spent too much time on this over the last few days IMO, not that you are unworthy, but after awhile it becomes too much, (though I have a hard time resisting misinformation and debate and will likely take the bait more than I should). However, if I come across interesting articles or statistics or references, I'll post them here.

what a rude response, i would have expected better. :roll:

For the fith point, where do you see any conclusion?? re-read what i wrote above and see i clearly stated that no conclusion were drawn. Now, from what you write above, you dont seem to have the necessary credibility tfor us to believe your opinion is any more valuable than the various editorial links we posted in the other threads. At least, the articles provide clear description of the thought process, you simply give some numbers and ask us to trust you own math. too bad, this doesn't pass the scientific verification, so i can't consider it. Clearing this issue would have helped us eliminate this reoccuring issue, which WILL eroccur otherwise...

Too bad you dont feel like helping with the knowledge you 'claim' to have, would have been nice of you to help people better understand politics on a politics forum. Now we can only doubt...

 

[darkbeaver]

RE: The Euro vs Dollar Co

Coming from the planet earth it,s hard not to be an active participant in the MONEY SUCKING CAPITAL MARKET!

 

[Huck]

Re: RE: The Euro vs Dollar Co

Coming from the planet earth it,s hard not to be an active participant in the MONEY SUCKING CAPITAL MARKET!

my thoughts exactly...

 

[jimmoyer]

RE: The Euro vs Dollar Conspiracy Theory: part II - "T

Huck I think you took Toro completely wrong.

I did not find his response rude to you, but rather
he was honest about dedicating his time and being too
lazy to do it and possibly not expert enough to do it
in the manner of a practicing professor (which he
is not), and his appraisal of the project you
offered is truly a huge one if done right.

In some ways he was self-deprecating, and also honest
as he appraised the rigor of your project and honest
in his disagreement with you.

Take it easy. We can still discuss these matters and
Toro will probably take the bait as he does truly disagree
with your point of view in other posts than the one
in which you offered constructing a model.

 

[Toro]

Re: The Euro vs Dollar Conspiracy Theory: part II - "T

what a rude response, i would have expected better. :roll:

Let me apologize then, as that was not my intent. Its just that I have had this conversation many times. And since you addressed me by name, I thought it was only polite to respond. Otherwise, I probably would not have. I was not intending to be disrespectful.

For the fith point, where do you see any conclusion?? re-read what i wrote above and see i clearly stated that no conclusion were drawn. Now, from what you write above, you dont seem to have the necessary credibility tfor us to believe your opinion is any more valuable than the various editorial links we posted in the other threads. At least, the articles provide clear description of the thought process, you simply give some numbers and ask us to trust you own math. too bad, this doesn't pass the scientific verification, so i can't consider it. Clearing this issue would have helped us eliminate this reoccuring issue, which WILL eroccur otherwise...

I meant the conclusion in the links you originally provided in the other thread, not in this thread. I should point out that none of the links purporting this theory are "scientific evidence" either.

Its up to you whether or not you believe me. That is your perogative.

Too bad you dont feel like helping with the knowledge you 'claim' to have, would have been nice of you to help people better understand politics on a politics forum. Now we can only doubt...

If I come across of interest on the Internet, then I'll post them. But I come here because its relaxing, not to do work. And this sounds like a fair amount of work.

But again, I apologize if you were offended.

 

[Huck]

Re: The Euro vs Dollar Conspiracy Theory: part II - "T

No worries Toro, I was not mad at all,

But, i do find it disapointing that you refuse to make an effort and clarify such an important topic that i understand you believe comes by too often and will keep comming back.

Since i believe that who risks nothig gets nothing, i will try and see if i can build a model that will allow to draw conclusions.

The task is far from being as complicated as it seems. We basically need to prove if there is any significant correlation between a switch in oil trade currency and the worlds reserve currency. I will create a 'reasonably simple' model of US economy and foreign economy with the main influencial vectors, as well impacts of a hypothetical concurent currency. From the model, we can validate different scenarios and extrapolate conclusions as if the oil impact is significat or not. From there we will know the the USA have been waging war for supremacy, or altruism.

Once i have the model, i will post itfor all to see, no matter the result so we can clear this reoccuring issue once and for all with true demonstration of facts.


I suggest you read my signature, as it is particulary true in this issue...


Cheers!

 

[Toro]

Re: The Euro vs Dollar Conspiracy Theory: part II - "T

Hey

Oddly enough, I just heard this topic for the very first time today within the investment community. I was listening to a call with George Friedman of Stratfor and the question about the Euro oil bourse in Iran came up.

Friedman's take was that trading in Euro's was merely symbolic and that the Europeans weren't going to participate anyways.

FWIW

 

[Huck]

Re: The Euro vs Dollar Conspiracy Theory: part II - "T

Hey

Oddly enough, I just heard this topic for the very first time today within the investment community. I was listening to a call with George Friedman of Stratfor and the question about the Euro oil bourse in Iran came up.

Friedman's take was that trading in Euro's was merely symbolic and that the Europeans weren't going to participate anyways.

FWIW

Interresting, But i read somewhere that one of the main reasons the euro was created was to create a contender for the US dollar hegemony. If this is true, it would not make sense for the europeans to back off now, that they get a golden oportunity to see the currency become relevant on oil commidity.

In anycase, the iranian euro oil bourse is set to begin march 23rd, 2006. Will be interresting to watch it and we will hear more about it in market publications.. (well, that's if it is not misteriously dismantled by the war on nuclear weapons... )

 

[Toro]

RE: The Euro vs Dollar Conspiracy Theory: part II - "T

There were several inter-related reasons why the euro was created, one of which was to increase the desireability for central banks to hold euros. But understand that almost all the world's reserves are held in the Europe, the US, Japan and China.

Why wouldn't the Europeans trade in Iran? Why would they? They can trade oil in Europe.

Would you trade in Iran?

I sure wouldn't.

 

[Toro]

RE: The Euro vs Dollar Conspiracy Theory: part II - "T

I too hope the Iranian bourse gets up and running. Then we'll put this issue to rest. But since you brought up a possible military strike, I thought you might be interested in what Friedman also had to say about that.

His take was that if Iran was motivated solely in building a nuclear weapon, they wouldn't be broadcasting it so loubdly, similar to Korea. Instead, they would have done it like Israel, India and Pakistan - in complete secrecy.

Rather, like Korea, by broadcasting their nuclear ambitions, they are trying to obtain something else. And that was to be seen once again as the main defender of Islam, which had been usurped by al-Qaeda and other groups such as Hamas. By doing so, they gain legitimacy in the region and are more able to pursue their interests in the Middle East, which most immediately, is influencing what is happening in Iraq. This also explains why the President of Iran would muse about wiping Israel off the map or move the Jewish homeland to Alaska.

He also said that neither America nor Israel want to take military action against Iran.

But back to the topic at hand.

 

[Toro]

Re: The Euro vs Dollar Conspiracy Theory: part II - "T

(Told you I would take the bait.)

Perhaps the purveyors of this theory can answer this question.

Oil is traded in Europe. However, the benchmark price is in dollars. Why do you think that is?

Let's go through the economic logic. Supposedly, trading oil in euros will cause central banks to switch from dollars to euros, or so goes the theory. The US benefits from the dollar being the primary reserve currency so much so that its willing to spend $300 billion to invade a country, kill their own people and create tremendous ill-will around the world. So America must benefit a lot. I mean, A LOT!

So surely the Europeans realize this. They can see the enormous benefit of having the euro being the world's reserve currency. And, apparently, its as easy as switching the benchmark price of crude from dollars to euros, 'cause BANG!, the world will shift their reserves into euros by doing so!

So why not just trade oil in euros ...

... in Europe!

It can't get any easier, right? They already trade oil in Europe, so why not switch from dollars to euros?

I mean, if that's all it took to switch the global reserve currency, why wouldn't the Europeans do it themselves?

Or maybe its because the theory is not plausible.

 

[Huck]

Re: The Euro vs Dollar Conspiracy Theory: part II - "T

Excellent comments, Toro, i do get the feeling we are evolving...


Allow to diggest this and do some research. Im quite busy to day so i will try to come back for tomorrow. But you bring very good questions on the table, there's gotta be more than meets the eye...


i will do some more research asap...

 

[Toro]

Re: The Euro vs Dollar Conspiracy Theory: part II - "T

I said I'd contibute when I found stuff.

Share of world GDP (which I believe is based on purchasing power parity, though I could be wrong)

2005
US 28.4%
Europe 30.3%
Japan 10.6%
Asia ex-Japan 10.8% - included in that, China 4.4% and India 1.7%
Emerging Europe 4.6%
Latin America 4.9%

Source - Stephen Roach, Morgan Stanley, January 13, 2006
He references the IMF and Morgan Stanley research.