U.S. Dollar Falls After OPEC Chief Talks of Pricing Oil in Euros

[Crazy Horse]

why do the Primitives continue to talk about what they don't know??

IDJITS

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3174293

Lone_Star_Dem  (1000+ posts)       Fri Feb-08-08 02:34 PM
Original message
U.S. Dollar Falls After OPEC Chief Talks of Pricing Oil in Euros 
 Advertisements [?]Source: CEP News

14:05 02/08 (CEP News) Montreal – The euro spiked a quarter-cent just after 1 p.m. EST after a weekly magazine reported OPEC was pondering a move to price oil in the European common currency.

OPEC Secretary General Abdalla El-Badri told the London-based Middle East Economic Digest that member countries are pressuring the cartel to abandon the floundering U.S. dollar.

“Maybe we can price the oil in the euro,” El-Badri said. “It can be done, but it will take time.”

The report says OPEC may switch to pricing oil in euros within a decade. Middle Eastern sentiment has been slowly turning away from the U.S. dollar in part because of a 21.8% rise in the euro against the U.S. currency over the past two years.

Officials from several Middle Eastern nations, including Qatar and Saudi Arabia, have openly pondered abandoning USD pegs. Iran already prices most of its oil in euros. Until now, the OPEC chief has remained silent.

Read more: http://www.economicnews.ca/login.php?page=reportsDetail...

CTyankee  (1000+ posts)      Fri Feb-08-08 02:37 PM
Response to Original message
1. Oh god, I knew it! I could just see this coming!
 Does anybody know what the effect will be on the U.S. economy?

puerco-bellies (1000+ posts)      Fri Feb-08-08 02:58 PM
Response to Reply #1
8. Inflation.
 I've posted this on discussions on energy trading/oil prices. The U.S. dollar's value is pinned to the cost of a barrel of oil. Oil drives the world's economy, and was traded in U.S. dollars. The dollar is losing value because of our trade imbalance, especially because now China and India are competing with the U.S. for oil. Since oil is in greater demand, oils intrinsic value is outstripping the dollars ability to buy it. Once oil is traded in Euro's the intrinsic value of the dollar will be lost.

A dollar soon won't buy any oil. Since we are deeply in dept, and no longer producing the worlds machines and consumer goods, the value of the dollar will only be tied to U.S. Treasuries.

It is very likely in the near future inflation will out pace interest on U.S. bonds and treasuries. That is like saying your currency is backed by an I.O.U. Would you take a check (read dollar here) drawn on a empty account? We have to, it's our currency. The rest of the world does not have to, and they will trade their vast dollar holdings (trade imbalance)for other currencies, or gold and silver. More dollars back in circulation, the less they are worth. In a word; Inflation.

rainy (1000+ posts)      Fri Feb-08-08 02:37 PM
Response to Original message
2. Thanks for this post. Rumor has it that this is why we went to war
 with Iraq, to keep them from switching from the dollar to the euro.

 

louis-t (1000+ posts)       Fri Feb-08-08 02:50 PM
Response to Reply #2
7. Jeez, maybe stupidface will have his excuse now
 to bomb the whole world into submission. Y'know cuz, like, "we're the worlds only superpower" and , like, "we should start acting like it."

   
 
 

Mojorabbit  (1000+ posts)      Fri Feb-08-08 02:40 PM
Response to Original message
3. I don't think
 it will be a decade before it happens.

alyce douglas  (1000+ posts)     Fri Feb-08-08 02:41 PM
Response to Original message
4. Cheney won't be too happy about this, who will he bomb next
 OPEC?

IDJIT

ayeshahaqqiqa  (1000+ posts)       Fri Feb-08-08 02:44 PM
Response to Original message
5. They're only saying ten years
 so that they can unload their dollars while they still have some value. And when they do, they'll switch.

ixion  (1000+ posts)       Fri Feb-08-08 02:46 PM
Response to Original message
6. here it comes, folks...
 get ready to be a banana republic.

 

The dream of all primitives............bananas

[franksolich]

Oh my.

I wonder why the expert on this particular matter, Pedro Picasso, hasn't weighed in.

Just as with everything else concerning the American dollar, the change in policies by OPEC would mean 50% of one thing, 50% of another thing, 50% bad, 50% good, no better, no worse, than the current situation.

The primitives as usual don't know shit.

[Lord Undies]

It's all a bunch of bluster.  The dollar is the only currency in the world with the assets to back it up.  That means it is the only real currency in the world.  The Euro is a egg balancing act and no one is going to put all their trust in that basket.