Long Live The Petro-Dollar!! - Page 2 - Politics Forum.org | PoFo

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#14852834
@Nonsense,

1. I never made the claim that the American dollar got its value from an actual physical reserve of oil that was or is actually possessed by the United States. That is a false accusation and is emphatically not what I said.

2. I generally agree with almost everything you said, but you word it as if it were a criticism, which I do not understand.

Nonsense wrote:The US Dollar will be exposed as a fiat currency when oil reserve depletion exceeds demand for it.
The US Dollar will then NOT be 'pegged' to oil, it's status will then collapse, it will collapse because no other global commodity exist that requires itself to be traded by the US Dollar.


Well this is a tacit admission of my point, that the dollar "will become" a fiat currency only once its connection to oil is broken, but contra the points made by @SolarCross, and @B0ycey, it would be inaccurate to call the Petro-dollar a fiat currency, as it stands currently, it is not a fiat currency. I'm glad you agree.
#14853492
[quote="Victoribus Spolia"]@Nonsense,

Victoribus Spolia -  16 Oct 2017, 16:16

I mean no criticism of 'you', I respond to the message.

Your opinion is that the dollar is not a 'fiat' currency, my opinion is different, we can disagree, that is not a problem, from an accounting point of view, a different opinion, based on factual reality would be expressed.
People's perceptions are often at odds to the reality , my opinion is that on a day-by-day basis, people do not make such judgements, their snouts are in the 'capitalist' trough, eking out a subsistence to survive in a 'dog-eats-dog' economic system.
#14853495
Any instability in the middle-east that would threaten the petro-dollar, or any alliance of governments to bypass it, is by definition a threat to global stability and the actual survival of the United States. Hence, attacking the Petro-Dollar seems to be a perfectly legitimate cause for the U.S. to declare war.

Indeed, and this is likely to have been the real motive for the US-led invasion of Iraq in 2003. Saddam was actively trying to encourage other nations to buy and sell oil in a currency other than dollars. This was a highly aggressive move, and seems to have been regarded as a casus belli. Of course, they couldn't use that as the official reason for invading and destroying a sovereign nation and killing hundreds of thousands of people, so something else had to be trumped up to justify the invasion. And the rest is history....
#14853538
Potemkin wrote:Indeed, and this is likely to have been the real motive for the US-led invasion of Iraq in 2003. Saddam was actively trying to encourage other nations to buy and sell oil in a currency other than dollars. This was a highly aggressive move, and seems to have been regarded as a casus belli. Of course, they couldn't use that as the official reason for invading and destroying a sovereign nation and killing hundreds of thousands of people, so something else had to be trumped up to justify the invasion. And the rest is history....


Yes, and the reason that the "real" motive is hidden while the U.S. acts in these conflicts with large foreign coalitions seems to demonstrate that her (America's) allies see the validity in the American need to protect the Petro-dollar arrangement at any cost, ultimately its because they are tied to the same arrangement and have little choice but the aid America is that particular interest. the Petro-Dollar was designed to be a wealth-creating replacement for the Bretton-Woods system, which is my entire point.

Thanks for the response.
#14853541
Yes, and the reason that the "real" motive is hidden while the U.S. acts in these conflicts with large foreign coalitions seems to demonstrate that her (America's) allies see the validity in the American need to protect the Petro-dollar arrangement at any cost, ultimately its because they are tied to the same arrangement and have little choice but the aid America is that particular interest. the Petro-Dollar was designed to be a wealth-creating replacement for the Bretton-Woods system, which is my entire point.

Indeed. Some things are simply understood by the world's ruling elite. The general public, of course, have to be spoon-fed a moralistic narrative to make them go along with it all. That's what the media are for. Lol.
#14853544
Potemkin wrote:Indeed, and this is likely to have been the real motive for the US-led invasion of Iraq in 2003. Saddam was actively trying to encourage other nations to buy and sell oil in a currency other than dollars. This was a highly aggressive move, and seems to have been regarded as a casus belli. Of course, they couldn't use that as the official reason for invading and destroying a sovereign nation and killing hundreds of thousands of people, so something else had to be trumped up to justify the invasion. And the rest is history....



Victoribus Spolia wrote:Yes, and the reason that the "real" motive is hidden while the U.S. acts in these conflicts with large foreign coalitions seems to demonstrate that her (America's) allies see the validity in the American need to protect the Petro-dollar arrangement at any cost, ultimately its because they are tied to the same arrangement and have little choice but the aid America is that particular interest. the Petro-Dollar was designed to be a wealth-creating replacement for the Bretton-Woods system, which is my entire point.

Thanks for the response.

You have to consider the whole timeline to really understand what is happening and why at any given point.

Iraq nets handsome profit by dumping dollar for euro

Iraq had jumped off the dollar bandwagon in 2003, but the US had first initiated full scale military operations against Iraq in 1990 (called the Gulf War). Iraq was already an enemy at this point. That isn't to say the resumption of hostilities that we call the Iraq War wasn't triggered at least in part by Saddam's switch to the euro but we shouldn't over estimate the importance of it. At the point at which the Iraq War started it was already the stated goal of US led forces to depose Saddam and they had already been laying siege to the country for over ten years with the assumption that Saddam's own people might do that job for them. Even if Saddam had not made the switch the US led forces would probably have lost patience with the seige tactic and moved in to finish him off.
#14853552
Potemkin wrote:Indeed. Some things are simply understood by the world's ruling elite. The general public, of course, have to be spoon-fed a moralistic narrative to make them go along with it all. That's what the media are for. Lol.


That's fair, but the controversial point of the matter is that from a political standpoint, we have little rational choice. I may be a political radical who tends to buck the status-quo with all the wet-dreams of political revolution, but that does not mean I feel that any reasonable politician ought to intentionally crash the world economy for some ambiguous principle.

Like I stated in the OP, the Bretton-Woods system made sense, and given the circumstances, the Petro-Dollar arrangment was absolutely brilliant. The catch? We are stuck with it and it is in the interest of the west and the United States to protect this arrangement and run PR as to prevent any public panic for as long as possible, even if its crash were inevitable because of something like "Peak-Oil." Any reasonable government will ride this train all the way into the station for as long as they can. Long Live The Petro-Dollar.

SolarCross wrote:Iraq had jumped off the dollar bandwagon in 2003, but the US had first initiated full scale military operations against Iraq in 1990 (called the Gulf War). Iraq was already an enemy at this point. That isn't to say the resumption of hostilities that we call the Iraq War wasn't triggered at least in part by Saddam's switch to the euro but we shouldn't over estimate the importance of it. At the point at which the Iraq War started it was already the stated goal of US led forces to depose Saddam and they had already been laying siege to the country for over ten years with the assumption that Saddam's own people might do that job for them. Even if Saddam had not made the switch the US led forces would probably have lost patience with the seige tactic and moved in to finish him off.


Yes, but the petro-dollar was threatened by a hostile Hussein regime in 1990 by invading Kuwait. Kuwait was a major OPEC state that helped in creating the petro-dollar hegemony and Iraq wanted to hold more sway in OPEC. Suddam's ambitions would put too much oil under the control of a single totalitarian regime that was theoretically anti-western. So even here, the Petro-dollar was the main reason for that war. We (the west) like a Saudi led OPEC made up of a confederation of weaker and dependent Arab states that will only ever be anti-western in lip-service to their more extreme populace, but not actually hostile. Suddam threatened this balance regardless of whether he would of ultimately upheld the dollar as the reserve currency (which is doubtful).
#14853579
Victoribus Spolia wrote:Yes, but the petro-dollar was threatened by a hostile Hussein regime in 1990 by invading Kuwait. Kuwait was a major OPEC state that helped in creating the petro-dollar hegemony and Iraq wanted to hold more sway in OPEC. Suddam's ambitions would put too much oil under the control of a single totalitarian regime that was theoretically anti-western. So even here, the Petro-dollar was the main reason for that war. We (the west) like a Saudi led OPEC made up of a confederation of weaker and dependent Arab states that will only ever be anti-western in lip-service to their more extreme populace, but not actually hostile. Suddam threatened this balance regardless of whether he would of ultimately upheld the dollar as the reserve currency (which is doubtful).

Again consider the whole timeline. Iraq had just brokered peace with Iran after a brutal 8 year war before seeking to annex Kuwait. The US had no problem with Iraq piling into Iran also an OPEC country and one considerably more important than teeny tiny Kuwait. Indeed the US supported Iraq's war in Iran. Had Iraq succeeded in Iran then the oil resources under its control would eclipse even Saudi Arabia.

Kuwait had to be defended because it was under the wing of US pax americana.
#14853587
SolarCross wrote:Again consider the whole timeline. Iraq had just brokered peace with Iran after a brutal 8 year war before seeking to annex Kuwait. The US had no problem with Iraq piling into Iran also an OPEC country and one considerably more important than teeny tiny Kuwait. Indeed the US supported Iraq's war in Iran. Had Iraq succeeded in Iran then the oil resources under its control would eclipse even Saudi Arabia.

Kuwait had to be defended because it was under the wing of US pax americana.


We couldn't have gotten involved in the Iran-Iraq war at that time even if we wanted to. Intervening in that conflict would have likely led to war with the Soviet Union which was trying to establish its own hegemony in that region with its war with Afghanistan. likewise, when the Iraq-Iran war began we had only just recently solidified the Petro-Dollar arrangement.

I get your point, but I think there were other reasons why things shook down that way. The Gulf-War was post-Soviet collapse and now the petro-dollar and OPEC had stabilized, the maintaining of that stabilization was essential and we no longer had diplomatic challenges from other super-powers that would keep us from keeping OPEC stable by getting directly involved in the region.

BTW.....be sure to say hi to my wife in the lobby.
#14853597
Victoribus Spolia wrote:We couldn't have gotten involved in the Iran-Iraq war at that time even if we wanted to. Intervening in that conflict would have likely led to war with the Soviet Union which was trying to establish its own hegemony in that region with its war with Afghanistan. likewise, when the Iraq-Iran war began we had only just recently solidified the Petro-Dollar arrangement.

I get your point, but I think there were other reasons why things shook down that way. The Gulf-War was post-Soviet collapse and now the petro-dollar and OPEC had stabilized, the maintaining of that stabilization was essential and we no longer had diplomatic challenges from other super-powers that would keep us from keeping OPEC stable by getting directly involved in the region.

BTW.....be sure to say hi to my wife in the lobby.


Funnily enough the Soviets also backed Iraq in the Iran-Iraq war, though they had different reasons for doing so. Afghanistan is Iran's barbarian hinterland, Iran considers it part of their sphere of influence, something which the soviets understood. Their expansion into Afghanistan put them onto a collision course with Iran. Consequently Iraq's war in Iran was good for soviet interests as it distracted and derailed any Iranian attempts to back up their barbarian relations in Afghanistan.

Both the US and USSR were supporting Iraq in the Iraq-Iran war.
#14853606
SolarCross wrote:Funnily enough the Soviets also backed Iraq in the Iran-Iraq war, though they had different reasons for doing so. Afghanistan is Iran's barbarian hinterland, Iran considers it part of their sphere of influence, something which the soviets understood. Their expansion into Afghanistan put them onto a collision course with Iran. Consequently Iraq's war in Iran was good for soviet interests as it distracted and derailed any Iranian attempts to back up their barbarian relations in Afghanistan.

Both the US and USSR were supporting Iraq in the Iraq-Iran war.


Sure, but like I said, any mass-involvement by the U.S. in that war or even in the general vicinity at that time would have undoubtedly provoked the USSR.
#14853612
Victoribus Spolia wrote: but contra the points made by @SolarCross, and @B0ycey, it would be inaccurate to call the Petro-dollar a fiat currency.


Just to clarify, I do not regard the Petro-Dollar as a fiat currency. In fact, I don't regard it as a currency at all. Just a system of payment for oil. Perhaps like Bit-coins for drugs. The Dollar I regard as fiat as I don't believe its value has anything solely to do with oil. Perhaps the petro-dollar system increases the dollars true value due to demand for it and that's about it. So without repeating the same things over and over again with you disagreeing with me, I will just repeat once more that I doubt the collapse of the petro-dollar will either destroy the global economy or do we actually need it. But nations who hold the dollar will lose out in terms of wealth if demand for the dollar ever slows. And this is likely to happen when the oil runs out.

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