U.S. Dollar tied to Oil

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Not sure if everybody knows this but no matter where you go in the world,crude oil is bought with the U.S.Dollar. It is true, oil is priced to the dollar and nothing else. Check me out if you don't believe me. I think this would affect the economy in some way if the price of crude would go up and stay up. Wouldn't you need more dollars to buy the same amount you were buying 6 months ago.Someone out there with a little bit more economic brain power think on this and respond back. Why do I have a sucpension this could also be a domino affect. If a country needs more dollars to buy oil where do they get it?

-- BayTrader (Petchekat@aol.com), January 17, 2000

Answers

Well they trucked all that fiat money after Y2K back to the treasury department in armored cars. Yep, that's where the money will come from and if that isn't enough, they'll print more. You know Andy, gold is getting to look a lot better to me all the time.

-- bardou (bardou@baloney.com), January 17, 2000.

Glad to hear that bardou! :o)

BayTrader,

Check out this link

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002KpK

I am on record as supporting the view that there is a move by certain parties to have Oil in the future priced in Euros...

this has enormous implications, obviously - you'll find details [just the basics] in the thread,

Feel free to comment - there is a lot going on behind the scenes here - a hell of a lot I can assure you!!!!!!!

-- Andy (2000EOD@prodigy.net), January 17, 2000.


Link

-- Possible Impact (posim@hotmail.com), January 17, 2000.

Who is buying the gold? I have a theory. The Mid East Oil Producers. Think about it. Oil was under $13 per barrel. It went to $22 around the rollover. Now it is $28 and rising. Right now the oil producers are doing very well. The get $28 per barrel and can then turn around and buy gold with the oil money proceeds. There was probably a quid pro quo that if the gold price was kept low, the oil price would also be low. Now there is new leadership in Saudi Arabia that obviously does not like the old plan. Oil prices are rising and production problems caused by Y2k and embedded issues will decrease the supply and make it easier for reduced production and higher prices. If oil prices are rising anyhow, what is the incentive to keep gold prices low? The poster "Another" on Kitco had this figured out a year or two ago. It is obvious that oil prices will continue to increase. Eventually gold prices will increase too unless the powers that be are too stupid to see what is happening. Curly can't figure out why the price of gold has not yet increased. Now the oil producers can get more than double the amount of gold per barrel than they could get less than a year ago. Perhaps the low gold price is a plot by the establishment to force the gold mines into bankruptcy so that TPTB can buy the mines cheap.

-- Moe (Moe@3stooges.gom), January 17, 2000.

Look at what the price of oil has done since 12/31/99. If this rise continues, for another two weeks it will lead to inflationary pressures everywhere. This will cause an exit from equities (stocks) and layoffs will shortly follow. As thos we lnow become fearful of potential job loss, you, me and Aunt Hilda will cool it on purchases of non-necessities, creating yet more job losses.

Folks, this is called recession.

Republicans are brought into high office whenever economies get imbalanced. George Bush will pick New York Governor Pataki as his VP mate. For more insight about the SHTF following that, stay tuned...(Hint: Bush will never take the oath of office.)

Buckle your seat belts. Maintain your preps. Lay low. The Markets will tell all, amidst the static and lies.

-- Joseph Almond (sa2000@webtv.net), January 17, 2000.



---saw a little video piece day or two after rollover. Whether or not it was disinformation or real I have no way of knowing. They were showing huge amounts of the "y2k emergency cash" being shredded and burned, I mean truckloads of the stuff..

-- zog (zzoggy@yahoo.com), January 17, 2000.

Bay Trader,

If you're insinuating that the US is intentionally increasing the price of crude to increase the the demand for dollars, that would be a three stooges scheme. The economic negatives would outweigh any positives. OPEC is incresing the price of oil because there's new leadership in Saudi Arabia that isn't as pro-US and OPEC is able to.

Andy, Since the mid-70s OPEC has looked for an alternative to the dollar for intl oil pricing. Up until now there hasn't been one. The Euro might provide a partial one. So?

In terms of this oil windfall going into gold, you guys need to re- evaluate OPEC financial fundamentals. Iran, Iraq, Libya, Algeria, Venz, Indonesia, etc, are all economic basket cases. Any oil windfall barely services debt. In terms of the others, Saudi Arabia, Kuwait, UAE- beyound debt service, their new game is buying US wepons systems to protect themselves from the above basket cases (after all one could say Iraq's dire economics started the Kuwait incursion).

Quoting the Wash Post '97 article , "Since 1990, when Iraq invaded Kuwait, the Gulf Cooperation Council nations (SA, Ku, Qatar, Bah, UAE and Oman) have signed contracts for $36 billion in American arms or 32% of the $111 billion in US arms exports worldwide..." (and consider this figure is outdated).

High oil prices service debt and buy advanced US weapons systems. Oh and heavily US backed Israel is the avowed enemy of this group of oil exporting Arabs??? Well maybe THIS IS a 3 stooges plot.

-- Downstreamer (downstream@bigfoot.com), January 17, 2000.


I understand that the Arab countries have also floated their own gold backed Dinar and may offer crude at a discount if paid in Dinars. This could further boost gold and weaken dollars AND strengthen the OPEC oil producers.

-- Bill P (porterwn@one.net), January 17, 2000.

Bill, VERY interesting.

-- Mara (MaraWayne@aol.com), January 17, 2000.

Yep, the Arabs raised rate when we stopped backing our dollar with gold. I'm taking odds now on how soon they switch from our fiat butt- wipe paper to real bills (ie bills backed by gold).

-- Hokie (Hokie_@hotmail.com), January 17, 2000.


Bill, thanks, I didn't know that... hmmmm....

-- Andy (2000EOD@prodigy.net), January 17, 2000.

The USA is the largest debtor nation on earth.The dollar has been falling in value and soon few will even want it.

Perhaps there will be a shift in the power of world currencies and the dollar is being discounted ahead of this event.

It may not be that oil is increasing in price as much as there is a percieved threat to the present value of the dollar.

-- Mike Lang (webflier@erols.com), January 17, 2000.


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