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

[Huck]

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

havater, you ask excellent questions. the trades for goods youa re talking about would have an impact if it became a world wide trend, ot at least impacted to a high level degree the worldwide oil trade. Trades between venezuela and cuba are relatively insignificant. If iran went ahead and did so, it would be another story.


I am speculating here, but by switching to the euro, iran may also try to trigger the economic decline of the USA for all the reasons i stated above. They know that you can't beat the USA with millitary (this is why the nucealr thing is very odd, i dont trust western media). To kill the dragon, you must disrupt its food chain... (the arabs are very smart)

 

[Huck]

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

more speculation:


in fact, the iranians may be trying to slow down the US invasion with their nuclear threat, while they attempt to starve it. This may explain why they babble about it so much. They know they can't beat the USA, they know the USA will try stop them, and they are going to try and slow them down, hopping the euro will pick up meanwhile.

China is jsut as smart. They are buying huge amounts of US bonds, to stimulate US economy. Because, Americans will buy chinse goods and further develop china. With this money, china buys more bonds, etc. This way, china is buying out the USA. But, they know eventually, the USA might try to come and stop them by force before falling. So, china builds up a very strong millitary. China is the biggest monster of the all, and certainly a worthy foe..

I sugegst you stop buying made in china stuff...

 

[Toro]

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

Toro, it maters not which currency the oil is transacted. What matters is with which currency it is benchmarked.

Right.

So those big foreign oil companies like BP, Royal Dutch, Total, ENI, Repsol, et. al. who are actually transacting in this stuff in different currencies are wrong then? The guys who are sitting in the treasury departments of these companies who are actually trading and swapping currencies are wrong?

Again, simple example: if we both have 100$, you USD, me CAD.

STOP!

This is where your logic breaks down. You do not understand, or at least appear to not understand, the concept of purchasing power parity I mentioned earlier. Your argument assumes that purchasing power parity exists at par values of currencies. The value of a basket of goods is not equal when C$100=US$100. There is no conversion loss based on par value because the value of a basket of goods is not equal between currencies at par value. So you cannot use this as your starting point for your argument. Everything breaks down. The whole argument breaks down.

Its simple economics 101. You learn this in a first year macro class. You cannot possibly attempt to model the currency market without understanding this simple concept. If you do not understand this, your model is meaningless.

 

[Toro]

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

Toro, thank you for your reminder of Econ 101, by with all due respect, I believe your view remained overly simplistic.

Of course its simplistic. I'm trying to make it as simplistic as possible. People have to understand basic economic concepts when they try to grapple with this argument. If one (and I'm referencing the third-person here) doesn't understand basic economics, one cannot make this argument. If one has never taken an economics class, it is difficult for one to understand the argument.

 

[Huck]

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

Toro, remember that in this thread, we need proof. You need tp demonstrate the BP, shell, etc. are actually buying the crude in other than USD. I need to verify, but the Crude may be bought in USD (as the selling country accepts only USD). Then, after transformation, the companies may deal it in other currencies, as the transformed good
s value changes (and commodates profits.)

in any case Toro, please dont try to contradict me and help me find the real mechanism. This thread is nt to prove me wrong, it is to find the truth...

 

[Huck]

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

Toro, are you implying that if I buy oil in CAD, i will get the same amount of oil for an equal original amount? (say, for 1000$ USD vs 1000CAD)

please explain, its important we all understand correctly

 

[darkbeaver]

RE: The Euro vs Dollar Co

So Huck is it true that the dragon ultimately has only the military option. It seems to me that they have already lost the economic edge.What I fear most is that they will begin to use the nukes to bolster failing foriegn policy.I don,t believe that they will gracefully accept anything less than first place, the dragon sits on a foundation of phony moral and ethical superiority, I can,t see any reason why they would not exercise the nuclear options for capitalistic efficiency.I also don,t think cooler heads will prevail, cooler heads would have ensured that
the present situation did not exist.

 

[Huck]

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

ok Toro, here is what i got:


When we say that oil is denominated in dollars, mean that all the oil sold by a country, only USD is accepted. Once the oil has been bough, the new owner is free to transact in any other currency (after transformation most notably).

link is here:

http://en.wikipedia.org/wiki/Opec

here is the importan passage:

Since worldwide oil sales are denominated in U.S. dollars, changes in the value of the dollar against other world currencies affect OPEC's decisions on how much oil to produce. For example, when the dollar falls relative to the other currencies, OPEC-member states receive smaller revenues in other currencies for their oil, causing substantial cuts in their purchasing power, because they continue to sell oil in the U.S. dollar. After the introduction of the euro, Iraq decided it wanted to be paid for its oil in euros instead of US dollars.

Here it says that since oil is sold in dollars, when the dollar goes down and say, iran converts the USD back to its own currency after a sale, they get less money. This is exactly what i was saying.

do you concur?

 

[Huck]

Re: RE: The Euro vs Dollar Co

So Huck is it true that the dragon ultimately has only the military option. It seems to me that they have already lost the economic edge.What I fear most is that they will begin to use the nukes to bolster failing foriegn policy.I don,t believe that they will gracefully accept anything less than first place, the dragon sits on a foundation of phony moral and ethical superiority, I can,t see any reason why they would not exercise the nuclear options for capitalistic efficiency.I also don,t think cooler heads will prevail, cooler heads would have ensured that
the present situation did not exist.

Speculation:


Interresting man, its hard to say. No country in the world will let the USA crumble. This is beause the USA are the strongest economy, and if they fall, everyone falls. This means that the change will be rgadual. if we assume the scenario where the usa slowly decline, then china nd other powers will slowly rise. Eventually, the SUA will become insignificant, just like canada is today. Then, it will be a new reign, a new empire, a new world. China's perhaps...


As for the nukes, i doubt the USA go haywire with them. Using nukes would be an international suicide for the USA as a war would be launched. but then again, war is good for an economy, maybe the USA could consider this option to restrenghetn their position. But, ibviously, the only way to prevent the uero from being adotpred is to kick everyone's ass that wants to do the move.

 

[darkbeaver]

RE: The Euro vs Dollar Co

So Huck is it true that the dragon ultimately has only the military option. It seems to me that they have already lost the economic edge.What I fear most is that they will begin to use the nukes to bolster failing foriegn policy.I don,t believe that they will gracefully accept anything less than first place, the dragon sits on a foundation of phony moral and ethical superiority, I can,t see any reason why they would not exercise the nuclear options for capitalistic efficiency.I also don,t think cooler heads will prevail, cooler heads would have ensured that
the present situation did not exist.

 

[Huck]

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

Ok, toro, here it goes.

Im sorry to say, but about the PPP, i believe you are wrong. I just discussed with a very good economist in my personall surroundings, and here ti goes:


I believe that the mistake you make is that you are american. By that, i mean that you are not used top handle currency conversions. I will give you an example:


For the americans, the oil is priced in USD. So, that means that there are no currency conversions, never. What happens though is that if the value of the dollar goes down, profits for the oil producing country goes down and they raise the price. You will regocnize this dynamic.

Now, if i deal in another currency, especially if it has a negative conversion rate with the USD, then not only do i suffer the woes of the oil price, but i also have to convert my money to USD, at the running rate. This is why it is such a disadvantage to buy oil in other currency than USD (if conversion rate is negative)


do you agree?

 

[Huck]

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

Toro, do we agree that the facts are right? can we continue?

 

[Toro]

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

Toro, remember that in this thread, we need proof. You need tp demonstrate the BP, shell, etc. are actually buying the crude in other than USD. I need to verify, but the Crude may be bought in USD (as the selling country accepts only USD). Then, after transformation, the companies may deal it in other currencies, as the transformed good
s value changes (and commodates profits.)

in any case Toro, please dont try to contradict me and help me find the real mechanism. This thread is nt to prove me wrong, it is to find the truth...

Proof? You are making the claims that all trades and transactions in the oil market are done in dollars. You prove that to be correct. You have not so far. And I mean, go to the actual financial statements and show me that, not linking to someone's interpretation or opinion.

I'm not trying to prove you wrong to show you up but you are basing your arguments and reasoning on incorrect principles of economics and factually wrong data. You said, for example, that all the loans the IMF and World Bank and the World Bank makes are in US dollars. That's false, as I linked to the IMF and the World Bank itself.

I admire your desire to understand this - and your ambition to model it - but you cannot understand the truth if you do not the underlying principles. You must understand the building blocks before you can erect the edifice.

 

[Toro]

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

Toro, do we agree that the facts are right? can we continue?

No. I do not agree with many of the facts. That's why I'm spending time going through the arguments one by one.

 

[Huck]

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

ok, lets take em one by one. I showed above that all oil is sold in USD from its origin selling country.

do you agree? (see post above)

edit: i did provide proof from wikipedia about this.

 

[Huck]

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

As for the IMF and World Bank, i was half right, half wront.

The IMF does use USD. The world Bank allows other currencies.

I said from the start i may be wrong, we jsut need to correct the errors. thats all.

so, this issue is clear.

IMF: USD Only
WB: multiple currencies

 

[Huck]

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

Here is more info about the fact that OPEC sells all oil in dolalrs only.

http://en.wikipedia.org/wiki/Petroeuro


i believe this fact that opec sells oil in USD is obvious...

 

[I think not]

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

Here is more info about the fact that OPEC sells all oil in dolalrs only.

http://en.wikipedia.org/wiki/Petroeuro


i believe this fact that opec sells oil in USD is obvious...

Huck, I think you should stop referencing wikipedia for "expert economic opinions". Anybody can edit that text, that's how wikipedia works. For the in depth discussion you are having, I think you need to find more credible sources.

 

[Huck]

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

toro, do we agree that when a country sells oil in USD, it means that it accepts only USD for payment? Any payment in another currency must be converted to USD.


can we accept this as fact?

 

[Huck]

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

Here is more info about the fact that OPEC sells all oil in dolalrs only.

http://en.wikipedia.org/wiki/Petroeuro


i believe this fact that opec sells oil in USD is obvious...

Huck, I think you should stop referencing wikipedia for "expert economic opinions". Anybody can edit that text, that's how wikipedia works. For the in depth discussion you are having, I think you need to find more credible sources.

ITN, wikipedia is reviewed extensibvely by over 800 professionals. Its accuracy has been demonstrated to be higher than encarta and britannica.

as for the oil being sold in dollars, how can it be any more obvious than that?