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The US Dollar reserve currency/petro dollar is the biggest weapon in the US arsenal, and the US has by far the largest army on the planet to enforce with https:

The US Dollar reserve currency/petro dollar is the biggest weapon in the US arsenal, and the US has by far the largest army on the planet to enforce with https://www.amazon.com/New-Confessions-Economic-Hit-Man/dp/1626566747/ref=dp_ob_title_bk https://www.amazon.com/New-Confessions-Economic-Hit-Man/dp/1...

JumpCrisscross 8y ago
> petro dollar Petrodollar hypotheses get the dollar's hegemony in international trade backwards. Petrodollars (i.e. oil producers' surplus revenues invested in U.S. dollar denominated instruments [1]) don't cause the hegemony. The United States being (a) the only advanced economy not bombed to the 19th century post-WWII and (b) the world's largest single consumer market [2] created and create international holders of U.S. dollars. (In the initial case, thanks to Bretton Woods. In the recurring case, since Americans pay with U.S. dollars.) Those holders, in turn, drive demand for dollar-denominated investments. The interaction between these processes, international consumption by Americans and the reinvestment of international dollars, drives economies of scale in the American financial system. (It is why, until very recently, it was cheaper and faster to send U.S. dollars between two European capitals than initiate a Euro-denominated transfer.) [1] https://en.wikipedia.org/wiki/Petrocurrency https://en.wikipedia.org/wiki/Petrocurrency [2] https://en.wikipedia.org/wiki/List_of_largest_consumer_markets https://en.wikipedia.org/wiki/List_of_largest_consumer_marke...
- platz 8y ago
  The interaction is also what varoufakis calls a "surplus recycling mechanism". When reinvestment of foreign American dollars back into Wall Street hiccuped in 2008, the cycle started to break - now there are deflationary winds blowing around
- olivermarks 8y ago
  Since oil is traded in dollars I was referring to petrodollars in that context.https://en.wikipedia.org/wiki/Petrodollar_recycling https://en.wikipedia.org/wiki/Petrodollar_recycling The USA attacked Iraq in the S Hussien era the moment they attempted to formally trade oil in euros for example. http://www.cnn.com/2000/WORLD/meast/10/30/iraq.un.euro.reut/ http://www.cnn.com/2000/WORLD/meast/10/30/iraq.un.euro.reut/
  - JumpCrisscross 8y ago
    > Since oil is traded in dollars I was referring to petrodollars Oil is quoted and traded in all kinds of currencies. It tends to be exchanged in dollars for the same reason that when Lufthansa bought Airbus jets in the last decade, they did the deal in dollars: Fedwire was, until very recently, the world's only international real-time high-volume electronic money transfer system. (Now Europe has a competitor.) The Hussein euro thing is a conspiracy. In what currency do you think British North Sea oil being shipped to Europe is paid for?
    - olivermarks 8y ago
      What do you mean by 'conspiracy?" Oil bourses trade in dollars
      - olivermarks 8y ago
        Iran in the crosshairs https://en.wikipedia.org/wiki/Iranian_oil_bourse https://en.wikipedia.org/wiki/Iranian_oil_bourse
      - JumpCrisscross 8y ago
        > What do you mean by 'conspiracy?" The United States did not invade Iraq because it was threatening to switch to Euros. If anything, American banks would have been thrilled at the prospect of new FX revenues. > Oil bourses trade in dollars Oil bourses? Oil futures are mostly traded on exchanges, but oil the commodity is mostly traded over the counter. It's privately negotiated. Those private negotiations reference whatever they want to, whether Brent in USD, Brent in EUR, WTI in USD, COM in JPY, et cetera.
        olivermarks 8y ago
        Right. 'In the case of crude oil, the main futures exchanges are the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE) where West Texas Intermediate (WTI) and North Sea Brent crude oil are traded respectively. These exchanges trade what is referred to as 'light- sweet' crude oil and a single contract, or 'lot', calls for the purchase or sale of 1,000 barrels of oil. Traders can buy and sell oil for delivery several months or years ahead' https://www.telegraph.co.uk/finance/newsbysector/energy/2790647/Oil-price-QandA-What-are-oil-futures-and-how-are-they-traded.html https://www.telegraph.co.uk/finance/newsbysector/energy/2790...
masonic 8y ago
the US has by far the largest army on the planet to enforce with That's completely wrong. https://en.m.wikipedia.org/wiki/List_of_countries_by_number_of_troops https://en.m.wikipedia.org/wiki/List_of_countries_by_number_...
- emodendroket 8y ago
  Try looking by military budget instead. The US military budget is larger than the next few budgets combined. The most recent increase is bigger than the entire Russian military budget.
  - amanaplanacanal 8y ago
    Yes, what other countries do with men in boots, the US attempts to do with technology. This seems to be only partially working. The US can bomb the hell out of people, but actually controlling any situation on the ground, it is not so good at.
    - emodendroket 8y ago
      It is often sufficient to US ends to merely depose a government and leave their country an ungovernable morass of violence for years, or else to let a local client do the hands-on work. There have been some high-profile failures, but nobody even pays attention to, like, Haiti, or Guatemala, or Libya, or wherever, where we've had our way without too much trouble.

JumpCrisscross 8y ago

> petro dollar Petrodollar hypotheses get the dollar's hegemony in international trade backwards. Petrodollars (i.e. oil producers' surplus revenues invested in U.S. dollar denominated instruments [1]) don't cause the hegemony. The United States being (a) the only advanced economy not bombed to the 19th century post-WWII and (b) the world's largest single consumer market [2] created and create international holders of U.S. dollars. (In the initial case, thanks to Bretton Woods. In the recurring case, since Americans pay with U.S. dollars.) Those holders, in turn, drive demand for dollar-denominated investments. The interaction between these processes, international consumption by Americans and the reinvestment of international dollars, drives economies of scale in the American financial system. (It is why, until very recently, it was cheaper and faster to send U.S. dollars between two European capitals than initiate a Euro-denominated transfer.) [1] https://en.wikipedia.org/wiki/Petrocurrency https://en.wikipedia.org/wiki/Petrocurrency [2] https://en.wikipedia.org/wiki/List_of_largest_consumer_markets https://en.wikipedia.org/wiki/List_of_largest_consumer_marke...

platz 8y ago
The interaction is also what varoufakis calls a "surplus recycling mechanism". When reinvestment of foreign American dollars back into Wall Street hiccuped in 2008, the cycle started to break - now there are deflationary winds blowing around
olivermarks 8y ago
Since oil is traded in dollars I was referring to petrodollars in that context.https://en.wikipedia.org/wiki/Petrodollar_recycling https://en.wikipedia.org/wiki/Petrodollar_recycling The USA attacked Iraq in the S Hussien era the moment they attempted to formally trade oil in euros for example. http://www.cnn.com/2000/WORLD/meast/10/30/iraq.un.euro.reut/ http://www.cnn.com/2000/WORLD/meast/10/30/iraq.un.euro.reut/
- JumpCrisscross 8y ago
  > Since oil is traded in dollars I was referring to petrodollars Oil is quoted and traded in all kinds of currencies. It tends to be exchanged in dollars for the same reason that when Lufthansa bought Airbus jets in the last decade, they did the deal in dollars: Fedwire was, until very recently, the world's only international real-time high-volume electronic money transfer system. (Now Europe has a competitor.) The Hussein euro thing is a conspiracy. In what currency do you think British North Sea oil being shipped to Europe is paid for?
  - olivermarks 8y ago
    What do you mean by 'conspiracy?" Oil bourses trade in dollars
    - olivermarks 8y ago
      Iran in the crosshairs https://en.wikipedia.org/wiki/Iranian_oil_bourse https://en.wikipedia.org/wiki/Iranian_oil_bourse
    - JumpCrisscross 8y ago
      > What do you mean by 'conspiracy?" The United States did not invade Iraq because it was threatening to switch to Euros. If anything, American banks would have been thrilled at the prospect of new FX revenues. > Oil bourses trade in dollars Oil bourses? Oil futures are mostly traded on exchanges, but oil the commodity is mostly traded over the counter. It's privately negotiated. Those private negotiations reference whatever they want to, whether Brent in USD, Brent in EUR, WTI in USD, COM in JPY, et cetera.
      - olivermarks 8y ago
        Right. 'In the case of crude oil, the main futures exchanges are the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE) where West Texas Intermediate (WTI) and North Sea Brent crude oil are traded respectively. These exchanges trade what is referred to as 'light- sweet' crude oil and a single contract, or 'lot', calls for the purchase or sale of 1,000 barrels of oil. Traders can buy and sell oil for delivery several months or years ahead' https://www.telegraph.co.uk/finance/newsbysector/energy/2790647/Oil-price-QandA-What-are-oil-futures-and-how-are-they-traded.html https://www.telegraph.co.uk/finance/newsbysector/energy/2790...

masonic 8y ago

the US has by far the largest army on the planet to enforce with That's completely wrong. https://en.m.wikipedia.org/wiki/List_of_countries_by_number_of_troops https://en.m.wikipedia.org/wiki/List_of_countries_by_number_...

emodendroket 8y ago
Try looking by military budget instead. The US military budget is larger than the next few budgets combined. The most recent increase is bigger than the entire Russian military budget.
- amanaplanacanal 8y ago
  Yes, what other countries do with men in boots, the US attempts to do with technology. This seems to be only partially working. The US can bomb the hell out of people, but actually controlling any situation on the ground, it is not so good at.
  - emodendroket 8y ago
    It is often sufficient to US ends to merely depose a government and leave their country an ungovernable morass of violence for years, or else to let a local client do the hands-on work. There have been some high-profile failures, but nobody even pays attention to, like, Haiti, or Guatemala, or Libya, or wherever, where we've had our way without too much trouble.