"...The continued viability of the US economy depends on it (having the world trade oil in Dollars and not some other currency). Americans can still afford to consume because their economy is suffused with cheap imports; a falling dollar will raise the prices of imported goods. At the same time, Americans enjoy some of the lowest oil prices in the world, largely due to the petrodollar arrangement. This has skewed the American vehicle market toward gas-guzzling but profitable SUVs and light trucks..."(Sidebar: Iran in the Crosshairs Iran's danger to America is not its nuclear program but its plan to introduce a euro-based energy exchange.)
Americans are walking, well, rolling along, fat, dumb and happy...or least not miserable. Soon, it is very likely that the fun times will end.
In this article the author, Ryan McGreal (raisethehammer.org) is looking at the fact that, as said above, "...the continued viability of the US economy depends on it.." That is, that the world continue to trade in dollars. If the world should decide to stop dealing in dollars, what do you think is going to happen?
The Us Economy goes down the tubes.
"...One of the major unstated reasons the United States invaded Iraq was to stop Saddam Hussein from trading oil for euros, which he had begun in 2000. Hussein actually made more money selling oil for euros, as the euro appreciated 17 percent against the dollar between 2000 and 2003. Other countries in the region, particulary Iran and Syria, began public musing about switching from dollars to euros around the same time.
All three countries were subject to a barrage of threats from the United States government, but only Iraq went through with the switch, and it was summarily invaded. One of the US government's first acts in Iraq was to switch oil sales back to dollars."
So, now that we have Iraq pretty well beaten up, the US is starting to mutter threats against both Iran and Syria. Can Bush afford to invade them too?
I don't think so.
So what is going to happen?
The world will begin trading oil in Euros, not dollars. And this is going to happen very soon, like, within a year. Part of this makes good financial sense and part of it is because the United States has become so hated under Bush that the Moslem States will do anything to strike a blow. If they can crush the US economy by switching to Euros, and ensure that they receive major profits, what is to stop them?
"...Many central banks are already quietly shedding their dollar reserves, nervous that America's economic fundamentals ($500 billion federal deficit, $700 billion current accounts deficit, $4.5 billion federal debt, record business and personal debts, zero savings) cannot be sustained for long, and hoping to insulate themselves from what they see as an inevitable recession. The US dollar has declined by a third against the euro since 2000, despite the petrodollar arrangement..."
Bush has the United States on an unsustainable economic course. The world bankers know it, and the enemies of this country know it. Both will do what is in their best interest to do. And the US will lose.
Where does that put you and I? Well for one, the economy around here is going to suck. You might try....
- Whatever you got, pay it off.
- Get your monthly bills down as low as you can.
- Stop borrowing.
- Stop using Home Equity to maintain a 'lifestyle'.
- Simplify.
- Learn to do without.
- Save gold or silver as paper money may not be worth much.
- make friends with your neighbors, you might need 'em.
- learn how to ride a bike.
- get a bike
- stop buying disposal things.
- Get things that are going to last
- Get things that are repairable
- learn to repair them
- Buy "how to" books that teach you the old ways...sewing, cooking, fat rendering
- grow a garden
- develop barter skills, have produce or something to barter
- don't panic...it may get worse.
Now, you know what fear is.
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