Saddam Praises Chirac as "Long Time Friend".

[neocon-hunter]

RE: Saddam Praises Chirac

So now, how do they dump all those dollars quickly
without devaluing the dollar and hurting themselves?

Beats me. But maybe they could do it slowly or trade it for other currencey, then slowley convert it to Euro's. But if they did that it would devaluate other currencies as well. But some countries probably won't care to much if they lost some money on the exchange, just as long as they hurt the US. Bizarre? yep.

 

[jimmoyer]

Well now you're thinking it through --- not that
you haven't before.

So if they do it gradually so as not to devalue
the Dollar when they exchange it for more Euros,
then how does this hurt the Dollar?

We just did a circle, here, eh?

And you have yet to explain why the G8 and the
EU were pretty pissed about George Bush letting
the Dollar devalue too rapidly.

 

[neocon-hunter]

RE: Saddam Praises Chirac

And you have yet to explain why the G8 and the
EU were pretty pissed about George Bush letting
the Dollar devalue too rapidly.

You never asked but since you brought it up...

Quick Devaluation of the Euro and Pound. But G8 countries are diferent than poor and not so poor (Like oil countries) 3rd world countries that have an agenda of hurting America.

To be honest what the planet needs is one common currency that everyone uses. It would solve a lot of problems.

 

[jimmoyer]

First, reread an earlier post in this thread.
I did ask you before.

Secondly, you have not made a convincing case, other
than reading the opinions of articles why
there would be a fear in devaluing the dollar and
cause America to attack on that basis alone.

Especially since the G8 and the EU would rather
have gradual fluctuations in exchange rates.

Also those countries not holding alot of Dollar,
will hardly affect the exchange rate.

As this gradual cycle up and down of values of
dollars and euros continues, you just might see a
world currency that hurts no one.

But right now, a lot of economists like having some
variety in different currencies and they're the ones
who advise the leaders throughout the world who
know they don't want to muck their economies up too
badly because of ideology or ignorance.

Switching too rapidly from Dollar to Euro would devalue
the Dollar and they'll have less Euro for it and
countries don't like taking a loss --- especially
third world greedy dictators.

And most of the 3rd world, even Iraq, does not hold
enough dollar to affect the value of the dollar.

So if Iraq goes to the Euro, it won't matter because
this world economy recycles and exchanges constantly
different currencies in the world bartering free trade.

 

[jimmoyer]

Also, your enthusiasm for a world currency
might have fatal Unintended Consequences for
the average world citizen.

Why?

Think about it.

What determines the value of a currency?

Interest rates.

And ?

Printing up a supply of the money.

And establishing credit.

Who will set these parameters?

In the EU, a lot of countries have given up the
right to set interest rates.

We value diversity don't we?
Perhaps too much of the same could be bad.
It implies some centralized control.

 

[neocon-hunter]

From here

The Arab Monetary Authority estimates that Arab investments in America between 1975 and 2000 total $300 billion. Unofficial estimates go up to twice that number. But what if the Asian central banks and the Arabs stop hoarding dollars? America will find it tough to fund its current account gap. The economic pain could be immense. In the 1960s, de Gaulle tried to abandon the dollar and use gold. The tactic failed because the yellow metal was soon to be out of favour in the international financial system. Since then, there has been no viable alternative to the US dollar as the currency for trade and accumulation. This could change, with the euro now coming into its own. At the end of 2000, Saddam Hussain took the plunge. He announced that Iraq's oil trade would now be done in euros. He also converted his country's $10 billion reserve fund with the IMF into euros. Saddam was pillored for what then seemed like a silly move --- he was letting politics get the better of economics. But the euro has appreciated by 17% against the dollar since then, and the dictator has, unknowingly, saved a part of Iraq's forex assets from falling in value.

 

[jimmoyer]

He also converted his country's $10 billion reserve fund with the IMF into euros. Saddam was pillored for what then seemed like a silly move --- he was letting politics get the better of economics. But the euro has appreciated by 17% against the dollar since then, and the dictator has, unknowingly, saved a part of Iraq's forex assets from falling in value.
-----------------------------link by neo-con hunter----

Well let's analyze this mostly opinion piece that
does pay some nod to macro-economics.

You will note that Saddam initially took a loss,
and you will note that the article lacks reference
to who was annoyed. It wasn't America, because
a devalued dollar increases American exports
and hurts European imports. The group that was
annoyed was the EU federal reserve.

And when the EU's euro rebounded, they were then
angry at George Bush for letting the Dollar slide.

You see ?

These articles aren't written by economists.
They're written for what sells to the buying public.

And the public buys this myth about the Euro, because
Hate Amerika sells for good reason and people will
read these constant parade of articles.

The authors of these articles are quite gleeful
behind their words at seeing Goliath fall.

The idea of killing the Dollar is pretty cool.

Just because people are right about their hatred
on Point A, doesn't automatically follow they're right
about their hatred on Point B.