The End of Dollar Hegemony

[danarhea]

One of Ron Paul's best speeches before Congress: The end of the dollar is closer than you think.

Article is here.

 

[Trajan Octavian Titus]

One of Ron Paul's best speeches before Congress: The end of the dollar is closer than you think.

Article is here.

Good should help us with our trade deficit.

 

[danarhea]

Good should help us with our trade deficit.

That's what the Wiemar Republic thought when it printed all those marks.

 

[jujuman13]

A TOT quote
(Good should help us with our trade deficit.)

TOT you are quite correct in your belief that God is indeed good.

But somehow I doubt that this is what you meant by your statement that I re-produce above.

Good (I would have said GOD) is not going to help us with our trade deficit.

The only ppl who can help are the American buying public.

If every American ceased purchasing products that are imported (primarily from the far east) and insisted on only purchasing goods 'Made in USA', this would bring down the trade deficit.

 

[Iriemon]

One of Ron Paul's best speeches before Congress: The end of the dollar is closer than you think.

Article is here.

I think the author misses the market on attacking the Fed system and pining for a return to the gold standard with sappy comments like: "When gold was used, and the rules protected honest commerce, productive nations thrived." I agree that a money based system is not perfect and subject to being abused -- to the ultimate cost of the abuser. But a gold based standard present serious problems as a standard for an international money system, namely, inability to control fluctuations in supply and demand. A deflationary economy produces different incentives (when prices are falling, it adds to the cost of borrowing and investing because less attractive compared to putting your money under the mattress) that is not necessarily good for the economy.

The author repeats what I've seen many discuss in the context of "bubble theory" -- the notions that market and economic cycles are all somehow the fault of monetary policy. "Protectionism, fixing exchange rates, punitive tariffs, politically motivated sanctions, corporate subsidies, international trade management, price controls, interest rate and wage controls, super-nationalist sentiments, threats of force, and even war are resorted to—all to solve the problems artificially created by deeply flawed monetary and economic systems" he writes. But at the same time, gold standard proponents ignore the consequences of a gold based money supply, as if by pegging the exchange rate to a commodity all the ills of monetary policy will simply disappear. It's malarky.

There are threats to the dollars preeminence. The biggest one has been 22 years of Republican spend and borrow policies that have put the nation $9 trillion in debt, with trillions owed to private parties like China. If our Govt is perceived as being unable to be fiscally and monetarily responsible, investors will be less like to accept the dollar as both trade currency and as the basis for future credit, which will result in either demanding a different currency or a higher return on dollars.

 

[PeteEU]

If every American ceased purchasing products that are imported (primarily from the far east) and insisted on only purchasing goods 'Made in USA', this would bring down the trade deficit.

I agree, but thats impossible as the US does not produce many prodcuts anymore. For example cloths is made in China (80%+), almost all electronical and computer stuff is produced outside the US. The list goes on. Very few things are actually made in the USA anymore.

 

[RightinNYC]

First off, this guy has a pretty piss poor understanding of 1898-1913, and completely misses the mark with his characterization of the attitudes behind the period.

Aside from that, his speech is riddled with inaccuracies.

Price inflation is raising its ugly head

No it's not.

Fed Chair Alan Greenspan, on several occasions before the House Banking Committee, answered my challenges to him about his previously held favorable views on gold by claiming that he and other central bankers had gotten paper money-- i.e. the dollar system-- to respond as if it were gold. Each time I strongly disagreed, and pointed out that if they had achieved such a feat they would have defied centuries of economic history regarding the need for money to be something of real value. He smugly and confidently concurred with this.

Dude, I'm pretty sure Greenspan knows a ****load more about what he's doing than you do.

A $2 trillion war is raging, and plans are being laid to expand the war into Iran and possibly Syria

No, it's not. Stop with the ****ing irresponsible fear-mongering.

There was no public talk of removing Saddam Hussein because of his attack on the integrity of the dollar as a reserve currency by selling oil in Euros. Many believe this was the real reason for our obsession with Iraq.

Hahahaha what? Please, show me one moron who actually believes this.


Basically, the guy sounds like an incredibly whiny isolationist.

 

[The_Real_ElRoi]

First off, this guy has a pretty piss poor understanding of 1898-1913, and completely misses the mark with his characterization of the attitudes behind the period.

Aside from that, his speech is riddled with inaccuracies.


No it's not.



Dude, I'm pretty sure Greenspan knows a ****load more about what he's doing than you do.



No, it's not. Stop with the ****ing irresponsible fear-mongering.



Hahahaha what? Please, show me one moron who actually believes this.


Basically, the guy sounds like an incredibly whiny isolationist.

You really should extract your head from that sand pile you obviously have it inserted into. Or is it firmly planted up your rectum. It is a known fact that Iraq was seriously considering changing from the Dollar to the Euro when it came to all its oil dealings. It doesn't take a genius to grasp what sort of economic ramification that would have had for the US if he had been allowed to do it. So, to totally reject the notion that this was possibly a major factor in the decision to invade and occupy Iraq is completely delusional. Quite actually, Saddam had already been cutting oil deals in Euro's:
International Institute for Strategic Studies - July 1st - - Political Affairs - Iran: What the U.S. Isn't Telling

 

[RightinNYC]

You really should extract your head from that sand pile you obviously have it inserted into. Or is it firmly planted up your rectum. It is a known fact that Iraq was seriously considering changing from the Dollar to the Euro when it came to all its oil dealings. It doesn't take e genius to grasp what sort of economic ramification that would have had for the US if he had been allowed to do it. So, to totally reject the notion that this was possibly a major factor in the decision to invade and occupy Iraq is completely delusional.

Hahahahahaha okay, let me get this straight.

You believe that because Iraq, a country that provided only 5% of US oil imports, was "seriously considering" changing from the dollar to the Euro, that we would conduct a $2 trillion war in order to keep them from changing it?

Do you have ANY evidence that the fiscal impact of Iraq changing its piddly amount of oil to the Euro would be worth $2 trillion? If not, then your theory doesn't make much sense, in a rational choice sort of world.

And if that isn't enough for you, consider this:

Venezuela, a country that we import 10% of our oil from (twice that of Iraq), has recently made the same motions that Saddam did. So, if that really was a major consideration in whether to invade Iraq, shouldn't we be readying 300,000 troops or so to go in to take out Chavez? Because by your logic, if Iraq was worth $2 trillion, we should be prepared to spend $4 trillion getting rid of Chavez.

Right?

 

[The_Real_ElRoi]

Hahahahahaha okay, let me get this straight.

You believe that because Iraq, a country that provided only 5% of US oil imports, was "seriously considering" changing from the dollar to the Euro, that we would conduct a $2 trillion war in order to keep them from changing it?

Do you have ANY evidence that the fiscal impact of Iraq changing its piddly amount of oil to the Euro would be worth $2 trillion? If not, then your theory doesn't make much sense, in a rational choice sort of world.

And if that isn't enough for you, consider this:

Venezuela, a country that we import 10% of our oil from (twice that of Iraq), has recently made the same motions that Saddam did. So, if that really was a major consideration in whether to invade Iraq, shouldn't we be readying 300,000 troops or so to go in to take out Chavez? Because by your logic, if Iraq was worth $2 trillion, we should be prepared to spend $4 trillion getting rid of Chavez.

Right?

The $2 trillion was to secure the second largest oil reserve in the world exclusively for US and British oil companies. The conversion to the Euro frightened the neocons because delusional morons like Wolfowitz envisioned it having ramifications throughout the rest of the OPEC nations. You really should expand your research database beyond FauxNews, Rush, and the Wall Street Journal.

 

[RightinNYC]

The $2 trillion was to secure the second largest oil reserve in the world exclusively for US and British oil companies.

Please explain how Iraq's oil reserves have been "secured exclusively" for US and British oil companies, and how that will earn the US $2 trillion in profit.

The conversion to the Euro frightened the neocons because delusional morons like Wolfowitz envisioned it having ramifications throughout the rest of the OPEC nations.

By that logic, we should be in Venezuela right now, wouldn't you agree?

You really should expand your research database beyond FauxNews, Rush, and the Wall Street Journal.

I don't watch TV, I've never listened to Rush, and I read the WSJ probably 1/10th as much as I read the NYT. But good try though, impugning someone elses intelligence is always a good fallback for when you don't have an argument.:doh

 

[The_Real_ElRoi]

Please explain how Iraq's oil reserves have been "secured exclusively" for US and British oil companies, and how that will earn the US $2 trillion in profit.



By that logic, we should be in Venezuela right now, wouldn't you agree?

I don't watch TV, I've never listened to Rush, and I read the WSJ probably 1/10th as much as I read the NYT. But good try though, impugning someone elses intelligence is always a good fallback for when you don't have an argument.:doh

Blood and oil: How the West will profit from Iraq's most precious commodity

The 'IoS' today reveals a draft for a new law that would give Western oil companies a massive share in the third largest reserves in the world. To the victors, the oil? That is how some experts view this unprecedented arrangement with a major Middle East oil producer that guarantees investors huge profits for the next 30 years

Published: 07 January 2007

So was this what the Iraq war was fought for, after all? As the number of US soldiers killed since the invasion rises past the 3,000 mark, and President George Bush gambles on sending in up to 30,000 more troops, The Independent on Sunday has learned that the Iraqi government is about to push through a law giving Western oil companies the right to exploit the country's massive oil reserves.

Independent Online Edition > Middle East

And the $2 trillion isn't what the oil giants will profit from their new Iraqi oil fields. No, that is the amount that will eventually be spent by US tax payers so that the oil barons can extract all that "free" oil. Then they will sell it back to the tax payers at premium prices. All the while still receiving subsidies from the US government because their multi-billion dollar quarterly profits just aren't enough to satisfy their greedy thirst.

I wouldn't rule out the Venezuela invasion scenario.

The NYT is a rag too. That wonderful bird cage liner was one of the main proponents of the Iraqi invasion and now they're trying their best to beat the drum as hard as possible for the invasion of Iran.

 

[RightinNYC]

Blood and oil: How the West will profit from Iraq's most precious commodity

The 'IoS' today reveals a draft for a new law that would give Western oil companies a massive share in the third largest reserves in the world. To the victors, the oil? That is how some experts view this unprecedented arrangement with a major Middle East oil producer that guarantees investors huge profits for the next 30 years

Published: 07 January 2007

So was this what the Iraq war was fought for, after all? As the number of US soldiers killed since the invasion rises past the 3,000 mark, and President George Bush gambles on sending in up to 30,000 more troops, The Independent on Sunday has learned that the Iraqi government is about to push through a law giving Western oil companies the right to exploit the country's massive oil reserves.

Independent Online Edition > Middle East

And the $2 trillion isn't what the oil giants will profit from their new Iraqi oil fields. No, that is the amount that will eventually be spent by US tax payers so that the oil barons can extract all that "free" oil. Then they will sell it back to the tax payers at premium prices. All the while still receiving subsidies from the US government because their multi-billion dollar quarterly profits just aren't enough to satisfy their greedy thirst.

That's your source? Nothing in there even hints at the fact that the US would make anywhere within a magnitude of the $2 trillion spent already. Unless you have evidence that somehow, while only having an investment interest in a small portion of Iraqi oil, American companies will be able to earn back $2 trillion on oil profits, give it up.

I wouldn't rule out the Venezuela invasion scenario.

I would. Unless you have any evidence that we're going to go to war with Venezuela (a $4 trillion war), give it up.

The NYT is a rag too. That wonderful bird cage liner was one of the main proponents of the Iraqi invasion and now they're trying their best to beat the drum as hard as possible for the invasion of Iran.

.....

:shock:

You're accusing the NYT of pushing for an invasion of Iran? Do you think about what you're claiming before you write it? Absolutely hilarious.:lol: You're right, and next thing we know, George Soros will be campaigning for Tom Tancredo '08.

 

[RightinNYC]

Here's a great example of the NYT "beating the drums" for war with Iran:

Bullying Iran - Editorial - 2/1/2007:

Given America's bitter experience in Iraq, one would think that President Bush could finally figure out that threats and brute force aren't a substitute for a reasoned strategy. But Mr. Bush is at it again, this time trying to bully Iran into stopping its meddling inside Iraq.

We have no doubt about Iran's malign intent, just as we have no doubt that Mr. Bush's serial failures in Iraq have made it far easier for Tehran to sow chaos there and spread its influence in the wider region. But more threats and posturing are unlikely to get Iran to back down. If Mr. Bush isn't careful, he could end up talking himself into another disastrous war, and if Congress is not clear in opposing him this time, he could drag the country along.

The drumbeat began during Mr. Bush's recent speech on Iraq, when he vowed to ''seek out and destroy'' Iranian and Syrian networks he said were arming and training anti-American forces. Mr. Bush also announced that he was sending a second aircraft carrier to the Persian Gulf. Hours earlier, American troops raided an Iranian diplomatic office in Iraq. If anyone missed the point, aides let it be known that the president had authorized the military to kill or capture Iranian operatives in Iraq.

...

As ever, the one tactic the administration is refusing to consider is diplomacy. Mr. Bush has resisted calls to convene a meeting of Iraq's neighbors to discuss ways to contain the crisis. There is no guarantee that Mr. Ahmadinejad can be persuaded that Iraq's further implosion is not in Iran's interest. But others in Tehran may have clearer heads. And any hope of driving a wedge between Iran and Syria will have to start by giving Damascus hope that there is a way in from the cold.

Mr. Bush's bullying may play well to his ever shrinking base. But his disastrous war in Iraq has done so much damage to America's credibility -- and so strained its resources-- that it no longer frightens America's enemies. The only ones really frightened are Americans and America's friends.

Certainly sounds like they're doing everything they can to get us into war.:roll:

 

[The_Real_ElRoi]

Here's a great example of the NYT "beating the drums" for war with Iran:

Bullying Iran - Editorial - 2/1/2007:


Certainly sounds like they're doing everything they can to get us into war.:roll:

Obviously, you have missed out on the wonderful "journalism" put forth by one "MICHAEL R. GORDON" of the NYT. He was the the "reporter" who was deeply involved with the weapons of mass destruction myths along with with Judith Miller.

THE STRUGGLE FOR IRAQ; U.S. Says Arms Link Iranians To Iraqi Shiites

THE STRUGGLE FOR IRAQ; U.S. Says Arms Link Iranians To Iraqi Shiites - Free Preview - The New York Times

THE STRUGGLE FOR IRAQ; DEADLIEST BOMB IN IRAQ IS MADE BY IRAN, U.S. SAYS

THE STRUGGLE FOR IRAQ; DEADLIEST BOMB IN IRAQ IS MADE BY IRAN, U.S. SAYS - Free Preview - The New York Times

There is not actual investigation involved in what this moron considers "journalism." He prints exactly what the administration tells him to as being fact based information. You really should get out more and read a book or two before you go espousing your narrowly derived point of view.

 

[RightinNYC]

Obviously, you have missed out on the wonderful "journalism" put forth by one "MICHAEL R. GORDON" of the NYT. He was the the "reporter" who was deeply involved with the weapons of mass destruction myths along with with Judith Miller.

THE STRUGGLE FOR IRAQ; U.S. Says Arms Link Iranians To Iraqi Shiites

THE STRUGGLE FOR IRAQ; U.S. Says Arms Link Iranians To Iraqi Shiites - Free Preview - The New York Times

THE STRUGGLE FOR IRAQ; DEADLIEST BOMB IN IRAQ IS MADE BY IRAN, U.S. SAYS

THE STRUGGLE FOR IRAQ; DEADLIEST BOMB IN IRAQ IS MADE BY IRAN, U.S. SAYS - Free Preview - The New York Times

There is not actual investigation involved in what this moron considers "journalism." He prints exactly what the administration tells him to as being fact based information.

You're right, the fact that the NYT noted that the US government put forth evidence to support their claim that Iranian weapons were being used in Iraq means that the NYT is trying to get us into war with Iran. How could I be so silly as to not notice that?:doh

You really should get out more and read a book or two before you go espousing your narrowly derived point of view.

Speaking of that, I should get back to my thesis.:lol:

 

[Iriemon]

First off, this guy has a pretty piss poor understanding of 1898-1913, and completely misses the mark with his characterization of the attitudes behind the period.

Aside from that, his speech is riddled with inaccuracies.

...
.

Concur.

.....

 

[ARealConservative]

Dude, I'm pretty sure Greenspan knows a ****load more about what he's doing than you do.

Ron Paul isn't claiming a damn thing that Greespan himself didn't admit prior to working for the Fed.

 

[danarhea]

Ron Paul isn't claiming a damn thing that Greespan himself didn't admit prior to working for the Fed.

Let me add that Ron Paul spent many years on the Banking Committee, and was recently appointed as the ranking member of the Gold Commission. If he didn't know what he is talking about, I doubt that would have happened.

I would like to see some serious debate, instead of people attacking Paul, who other Congressmen, Republican and Democratic alike, acknowledge as an expert in his field.

• Rights belong to individuals, not groups.
• Property should be owned by people, not government.
• All voluntary associations should be permissible -- economic and social.
• The government's monetary role is to maintain the integrity of the monetary unit, not participate in fraud.
• Government exists to protect liberty, not to redistribute wealth or to grant special privileges.
• The lives and actions of people are their own responsibility, not the government's.

-Ron Paul

 

[ARealConservative]

I agree that a money based system is not perfect and subject to being abused -- to the ultimate cost of the abuser. But a gold based standard present serious problems as a standard for an international money system, namely, inability to control fluctuations in supply and demand. A deflationary economy produces different incentives (when prices are falling, it adds to the cost of borrowing and investing because less attractive compared to putting your money under the mattress) that is not necessarily good for the economy.

And here lies the big difference. I don't want an artifical agent controlling fluctuations in supply and demand.

The author repeats what I've seen many discuss in the context of "bubble theory" -- the notions that market and economic cycles are all somehow the fault of monetary policy. "Protectionism, fixing exchange rates, punitive tariffs, politically motivated sanctions, corporate subsidies, international trade management, price controls, interest rate and wage controls, super-nationalist sentiments, threats of force, and even war are resorted to—all to solve the problems artificially created by deeply flawed monetary and economic systems" he writes. But at the same time, gold standard proponents ignore the consequences of a gold based money supply, as if by pegging the exchange rate to a commodity all the ills of monetary policy will simply disappear. It's malarky.

Yes, many experts blame our monetary policy for all the above mentioned ills, including Greenspan at one time in his life.

 

[Iriemon]

And here lies the big difference. I don't want an artifical agent controlling fluctuations in supply and demand.

The Fed doesn't control demand, but supply. And far better an agent can control it than a commodity controlling fluctuations in supply, IMO.

Yes, many experts blame our monetary policy for all the above mentioned ills, including Greenspan at one time in his life.

And also the monetary policy when it was dictated by the gold standard as well. A big reason the Great Depression was "great" was that the Fed had to raise interest rates and restrict the money supply in the middle of the depression which made it much worse -- to maintain the gold standard.

Money supply policy is always subject to criticism. But better that we have the tools to control it rather than leave it to the uncontrollable effects of the supply of a commodity, and the nations that produce that commodity.

 

[ARealConservative]

The Fed doesn't control demand, but supply. And far better an agent can control it than a commodity controlling fluctuations in supply, IMO.

hmmm...., the Fed doesn't control demand? I think we both know this isn't painting an accurate portrait. The fed might claim that changes to the prime rates are to stave off inflation or hyper inflation, but this action does have an affect on demand.

And didn't Congress pass certain laws that prevented citizens from possessing sizable quantities of gold? Seems to me this would of had quite the effect on demand of not only gold, but the new currency not backed by gold.

but of course, your opinion of which is a better agent to control fluctuations are absurd and ignore historical fact. In an amazingly short period of time these "agents" you trust so much have increased the money supply far more than any new commodity discoveries were ever able to achieve.

And also the monetary policy when it was dictated by the gold standard as well. A big reason the Great Depression was "great" was that the Fed had to raise interest rates and restrict the money supply in the middle of the depression which made it much worse -- to maintain the gold standard.

puke. We left a true gold standard prior to the great depression.

 

[Iriemon]

hmmm...., the Fed doesn't control demand? I think we both know this isn't painting an accurate portrait. The fed might claim that changes to the prime rates are to stave off inflation or hyper inflation, but this action does have an affect on demand.

Sure, as with anything else.

And didn't Congress pass certain laws that prevented citizens from possessing sizable quantities of gold? Seems to me this would of had quite the effect on demand of not only gold, but the new currency not backed by gold.

I think that was true at some point but not today.,

but of course, your opinion of which is a better agent to control fluctuations are absurd and ignore historical fact. In an amazingly short period of time these "agents" you trust so much have increased the money supply far more than any new commodity discoveries were ever able to achieve.

I disagree that my opinion on a currency based monetary policy versus a commodity based policy is "absurd". Mine is certainly not a unique or even minority position.

I'm not sure the basis for the pining for a gold standard, other than a misty eyed view of history of the "good old days." The contrictions placed on money supply based on a commodity caused severe restrictions on economic growth and exacerbated recessions into depressions when deflation encouraged hording and there just wasn't enough money in the economy to get it growing. This is exactly what made the great depression great. There was a 25% deflation in prices, and people were hording money. The money supply needed to be expanded, not constricted, but that was not possible because there wasn't enough gold to meet the need.

Since we got off the gold standard, the economy as seen *nothing* close to what happened in the great depressions or even the several depressions preceding it. Through control of the money supply, the boom/bust cycle has been flatten to a large extent. After the Fed focused on inflation in 1979, inflation has been under control. The two recessions in the 25 years since 1981 have been a -.2% decline in '91, and a .7% precent gain in 2001. Extremely mild events. Viewed compared to history, the Fed IMO has done a fantastic, excellent job of managing the money supply proven by the steady economic growth and without depressions.

Money supply can really screw up an economy. Why someone would want to abandon a system that has worked extremely well and return to a system where the money supply is uncontrollable and at the whim of the amount of a commodity in circulation is just beyond me.

puke. We left a true gold standard prior to the great depression.

I had asked you before what is a "true" gold standard, and I still don't know what you are talking about.

 

[ashurbanipal]

I'd like to comment a little on RightatNYU's posts, which are full of misunderstandings, as easy to make as they may be.

The issue with dollar hegemony and the Iraq war, and the geopolitical situation at large, is simple if you understand three basic points:

1) Right now, no one is selling significant quantities of oil to anyone, anywhere. Those countries who wish to buy oil (pretty much all countries) must have dollars to do it with. This means they have to sell goods to the United States in order to get dollars to trade for the oil they need.

2) If someone starts selling significant quantities of oil anywhere in the world, to anyone, for any other currency, and they make it stick for a while, countries that sell us their goods currently for money that we print by fiat have the option to sell to other countries, whose debt they don't own so much of and whose currency is more sound. Those countries that supply us with the things we need to live will find other trading partners and demand that we pay off our debts to them; we will starve to do so.

3) We have taken action against every country that has tried to open a bourse in euros. The war in Iraq was realpolitik at its best. Iraq was sellling oil in euros. All the other reasons given for the war have proven to be false, while this one makes sense. Had Iraq succeeded in making their bourse stick, other countries that have no particular reason to be fond of us would probably have followed. This would have been a disaster. We print money, as much as we wish. 2 trillion dollars is only a lot because the paper to print that much weighs quite a bit.

 

[Conservationist]

Speculative economics cause a boom-bust cycle, while fixed economics do not. Less growth, more stability, less crime.