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What Not Buying Oil With Dollars Means

29 points by bensummers 17y ago

deleted 17y ago
[deleted]
rrhyne 17y ago
The FED is walking a tightrope with the rest of the world right now, but it should be more afraid of it's own citizens. I know 29% inflation over 10 years is chafing MY hide and it's all due to the FED's policies.
- forinti 17y ago
  That's about 2,6% a year. Not bad, actually.
  - evgen 17y ago
    Given the fact that we were eyeball-to-eyeball with some serious deflationary pressure I think that this is probably a much better alternative :) The fact that the CPI did not go up and we are actually thinking of sending "sorry there was no inflation this year to bump your COLA" checks to millions of people puts some of this into a slightly different perspective.
  - tomjen2 17y ago
    No, not if you don't mind loosing a lot of money, then it its okay.
  - mitko 17y ago
    The average inflation is even actually 2,33% per year. Take tenth root of 1,26 . But you are right, not bad.
- stuffthatmatter 17y ago
  I'm surprised the parent post got negative karma points. Do people think inflation is natural/necessary? It is a way for the government to tax/steal honest labor from its citizens. Are people that naive?
jeromec 17y ago
A similar topic was posted to HN here: http://news.ycombinator.com/item?id=863435 http://news.ycombinator.com/item?id=863435 In that thread my comments match fairly closely with this author's predictions starting near the bottom of the article section "Are the Dollar’s Days as Reserve Currency Over?" including my comments [..maintaining reliance on oil means gas prices comfortably around $10 (or more) along with the corresponding inflation and further vanishment of any middle class. An unemployment rate of 10% would begin to look normal...The trade-off is less spending power, which means our economy must shift away from being spending based. People will kick and scream when that realization hits but America simply won't continue to dominate the world economy.]
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ckinnan 17y ago
This piece is rather poorly reasoned. It matters very little what currency oil is priced in...oil is re-priced constantly (as is the dollar), and the dollar can readily and immediately be exchanged with euro or yen or most anything else in massive global forex markets. I can just as easily price oil in euros or in ounces of gold....it is the supply and demand for oil, and the supply and demand for dollars, that matters.
- nazgulnarsil 17y ago
  you're ignoring that demand for dollars is hugely tied to oil.
  - ckinnan 17y ago
    It is a keystroke to change from euro to dollars to buy oil and another keystroke for the seller to exchange those dollars for another currency. The fact that oil is priced in one currency has almost no impact on the underlying supply and demand. The important element to the oil-dollar story is the idea of the Gulf States opting to leave the American sphere and the sense of American decline.
    - jeromec 17y ago
      It's a play on words, but I believe "priced in dollars" means oil payments made in dollars. In other words, the currency you need to have on hand to trade with. See the article linked below: Excerpt: "Brazil has shown interest in collaborating in non-dollar oil payments, along with India." http://www.businessweek.com/globalbiz/content/oct2009/gb2009106_736291.htm http://www.businessweek.com/globalbiz/content/oct2009/gb2009... Also, Saddam Hussein was threatening to take payments for oil in euros...
    - nazgulnarsil 17y ago
      right, but with millions of transactions a day this serves to boost aggregate demand for dollars, since currency is constantly being traded into it for a commodity which is then consumed.
- 17y ago
mdemare 17y ago
"At this point the US is the undisputed leader in almost nothing except military tech." That's just ridiculous. Internet, software, airplanes, medical equipment, computers, entertainment, the list goes on.
- deleted 17y ago
  [deleted]
- ericb 17y ago
  Computers? I think it depends what angle you squint at that one from.
  - krschultz 17y ago
    The one that includes Intel, AMD, Microsoft, Apple, IBM, Cisco, Oracle, Google, oh and the NSA. Taiwan, China, and Japan have great centers of manufacturing and engineering but to say any single one has more "leadership" than the US is preposterous.
    - ericb 17y ago
      Lack of a clear "leader" elsewhere does not mean the US is the "undisputed leader" as you claimed--so that's a bit of a straw man. Again, it is a matter of definition. As far as I can tell, all of your examples who sell computers are selling computers manufactured in other countries, and the example of large computer consumers you give, which I'm not sure are relevant, are by and large using computers or outsourced parts manufactured elsewhere.
nkohari 17y ago
This article strikes me as a collection of weakly-defended opinions with no real references or citations on sources of information. I could easily write a post stating the exact opposite point that would read just as well.

29 points by bensummers 17y ago

deleted 17y ago

[deleted]

The FED is walking a tightrope with the rest of the world right now, but it should be more afraid of it's own citizens. I know 29% inflation over 10 years is chafing MY hide and it's all due to the FED's policies.

forinti 17y ago
That's about 2,6% a year. Not bad, actually.
- evgen 17y ago
  Given the fact that we were eyeball-to-eyeball with some serious deflationary pressure I think that this is probably a much better alternative :) The fact that the CPI did not go up and we are actually thinking of sending "sorry there was no inflation this year to bump your COLA" checks to millions of people puts some of this into a slightly different perspective.
- tomjen2 17y ago
  No, not if you don't mind loosing a lot of money, then it its okay.
- mitko 17y ago
  The average inflation is even actually 2,33% per year. Take tenth root of 1,26 . But you are right, not bad.
stuffthatmatter 17y ago
I'm surprised the parent post got negative karma points. Do people think inflation is natural/necessary? It is a way for the government to tax/steal honest labor from its citizens. Are people that naive?

jeromec 17y ago

A similar topic was posted to HN here: http://news.ycombinator.com/item?id=863435 http://news.ycombinator.com/item?id=863435 In that thread my comments match fairly closely with this author's predictions starting near the bottom of the article section "Are the Dollar’s Days as Reserve Currency Over?" including my comments [..maintaining reliance on oil means gas prices comfortably around $10 (or more) along with the corresponding inflation and further vanishment of any middle class. An unemployment rate of 10% would begin to look normal...The trade-off is less spending power, which means our economy must shift away from being spending based. People will kick and scream when that realization hits but America simply won't continue to dominate the world economy.]

deleted 17y ago

[deleted]

ckinnan 17y ago

This piece is rather poorly reasoned. It matters very little what currency oil is priced in...oil is re-priced constantly (as is the dollar), and the dollar can readily and immediately be exchanged with euro or yen or most anything else in massive global forex markets. I can just as easily price oil in euros or in ounces of gold....it is the supply and demand for oil, and the supply and demand for dollars, that matters.

nazgulnarsil 17y ago
you're ignoring that demand for dollars is hugely tied to oil.
- ckinnan 17y ago
  It is a keystroke to change from euro to dollars to buy oil and another keystroke for the seller to exchange those dollars for another currency. The fact that oil is priced in one currency has almost no impact on the underlying supply and demand. The important element to the oil-dollar story is the idea of the Gulf States opting to leave the American sphere and the sense of American decline.
  - jeromec 17y ago
    It's a play on words, but I believe "priced in dollars" means oil payments made in dollars. In other words, the currency you need to have on hand to trade with. See the article linked below: Excerpt: "Brazil has shown interest in collaborating in non-dollar oil payments, along with India." http://www.businessweek.com/globalbiz/content/oct2009/gb2009106_736291.htm http://www.businessweek.com/globalbiz/content/oct2009/gb2009... Also, Saddam Hussein was threatening to take payments for oil in euros...
  - nazgulnarsil 17y ago
    right, but with millions of transactions a day this serves to boost aggregate demand for dollars, since currency is constantly being traded into it for a commodity which is then consumed.
17y ago

mdemare 17y ago

"At this point the US is the undisputed leader in almost nothing except military tech." That's just ridiculous. Internet, software, airplanes, medical equipment, computers, entertainment, the list goes on.

deleted 17y ago
[deleted]
ericb 17y ago
Computers? I think it depends what angle you squint at that one from.
- krschultz 17y ago
  The one that includes Intel, AMD, Microsoft, Apple, IBM, Cisco, Oracle, Google, oh and the NSA. Taiwan, China, and Japan have great centers of manufacturing and engineering but to say any single one has more "leadership" than the US is preposterous.
  - ericb 17y ago
    Lack of a clear "leader" elsewhere does not mean the US is the "undisputed leader" as you claimed--so that's a bit of a straw man. Again, it is a matter of definition. As far as I can tell, all of your examples who sell computers are selling computers manufactured in other countries, and the example of large computer consumers you give, which I'm not sure are relevant, are by and large using computers or outsourced parts manufactured elsewhere.

nkohari 17y ago

This article strikes me as a collection of weakly-defended opinions with no real references or citations on sources of information. I could easily write a post stating the exact opposite point that would read just as well.