If China looses faith, the dollar will collapse

[Chrisco]

The whole thing with China and SDR was a kite flown to distract attention from the $-RMB exchange rate in advance of the G20. China can't let go of a significant portion of its enormous dollar reserves without weakening the rest, so it will slowly and quietly continue to diversify, but nothing dramatic is going to come about.

Unless something happens on Taiwan, that is...

[Oppenheimer]

A big issue here is the fact that oil is traded in dollars, thus keeping demand for dollars high as everyone needs them to buy oil. Iran have been threatening for years to set up an oil exchange that only used Euros.

A difficult thing to do by some accounts, but perhaps why the US is giving so much attention to Iran at the moment.....

Although completely unreported by the U.S. media and government, the answer to the Iraq enigma is simple yet shocking -- it is in large part an oil currency war. One of the core reasons for this upcoming war is this administration's goal of preventing further Organization of the Petroleum Exporting Countries (OPEC) momentum towards the euro as an oil transaction currency standard. However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves. The second coalescing factor that is driving the Iraq war is the quiet acknowledgement by respected oil geologists and possibly this administration is the impending phenomenon known as Global "Peak Oil." This is projected to occur around 2010, with Iraq and Saudi Arabia being the final two nations to reach peak oil production. The issue of Peak Oil has been added to the scope of this essay, along with the macroeconomics of `petrodollar recycling' and the unpublicized but genuine challenge to U.S. dollar hegemony from the euro as an alternative oil transaction currency. The author advocates graduated reform of the global monetary system including a dollar/euro currency `trading band' with reserve status parity, a dual OPEC oil transaction standard, and multilateral treaties via the UN regarding energy reform. Such reforms could potentially reduce future oil currency and oil warfare. The essay ends with a reflection and critique of current US economic and foreign policies. What happens in the 2004 US elections will have a large impact on the 21st century.


From Revisited - The Real Reasons for the Upcoming War With Iraq:
A Macroeconomic and Geostrategic Analysis of the Unspoken Truth

[Mazzy Maz]

Opened February 17th, 2008.

Wow that passed me by. According to that link though they're still not trading crude oil, only oil-derived products.

The last person to trade crude oil in Euros was a cheeky chappy named Saddam, he hasn't been heard from since.

[Cael]

I thought that they already moved to balance their reserves to more Euros a few years back, it was at that point that the dollar started its slide and then persisted due to other events since.

But it looks like the Euro will also be devalued soon through massive money printing and dropping the ECB base rate.

[feargach]

Dollar is collapsing today, you may have noticed.

Allegedly, this is because the GDP has contracted for the 4th quarter in a row.

Bad, bad news for Europe's exporters.

[Wakeupcall]

China are exchanging dollars for resources such as copper, gold etc. Are they planning ahead? The ball seems to be in their court.

[Eye of Angkor]

Have no illusions - the euro is not going to be devalued. All our euro deominated debt will have to be repaid in real money. If that means pain, so be it.