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[Please recommend this diary. After Stirling's bullshit attack, its only fair that I get to respond.]

Stirling, Stirling, Stirling.......

You might consider reading a post before you attempt to rip it apart.  Ironically, your post entitled "bulldog manifesto craps on the facts" is shining example of how to defecate on facts.  After reading your post, I am left to wonder a few things:

  1.  Did you even read my post?
  2.  Why did you choose to take such a rude tone?
  3.  How much money do you have tied up in the United States market?

So let's begin, shall we?

Did you even read my post?

You claim that I get my "basic economic history" wrong.  The funny thing is, I didn't even attempt to propose a "basic economic history."  I merely cited the economic theory of Dollar Hegemony.  Insofar as "Dollar Hegemony" contains elemetary historical references, my post remained true to those references. (Please note, this is an ACTUAL ECONOMIC THEORY, not as you childishly label it-- a 'tinfoil hat conspiracy theory.')

Amusingly, you list an assortment unreferenced points which you believe support your position that my post was "crap."  You make a lot of noise.  You manage to use a ton of buzzwords.  But in the final analysis, your "points" do nothing to refute my post.  They merely illustrate your need to masturbate in public.  

Here you begin:  

"1. The US Dollar was the important currency in 1945 because the US was the only major industrialized nation not bombed and burned by the war. The US had half of GDP, and most of the world's industrial base."

Well done Stirling!  You managed to tell us something that, while perhaps true, does nothing to refute "Dollar Hegemony."  In fact, you managed to provide the historical context for "Dollar Hegemony".  Thank you!
"2. The US Dollar had been an important currency before the war because the US ran a surplus with the rest of the world - we were the China and Saudi Arabia of the day. But petroleum was not as important in 1920 or 1945 as it is today. What was important was that the US had surplus capital. We bankrolled the Dawes Plan to keep Europe afloat in the 1920's. Keynes - who had critiqued international monetary policy in that era (The economic consequences of the peace) designed Bretton Woods not around oil, but around capital flows, which were to be restricted in order to produce comparative advantage.

Once again, you manage to impress the uninitiated with your "cut and paste" of economic history, but you fail to show WHY THE FUCK THIS REFUTES DOLLAR HEGEMONY.

Like a parrot, you spout red-letter buzzwords "Dawes Plan"...blah blah blah... "Bretton Woods"...blah blah blah.....but what the heck does this have to do with refuting Dollar Hegemony?  If anything, you are merely bolstering the point I made that:

"Fortunately for the U.S., this system (in place since WWII) creates a built-in support for a strong dollar that in turn forces the world's central banks to acquire and hold even more dollar reserves, making the dollar stronger still.

Thank you!

Then you continue with some more mastubatory parroting of history:

"3. Between 1945 and 1972 US supremacy is based on the availability of capital, our place as a consumer market, and our exports of capital goods - as well as our military. Oil is not priced in dollars at that this time, and it is not until the late 1960's that the US has finished coopting France and Britain in control of the oil reserves in the rest of the world - the turning point being in the late 1950's with consolidation of the US position in Iran.

"4. It is not until the lifting of oil import quotas in 1971 that there is a significant petro-dollar interest, it is not until the oil embargo of 1973 that OPEC has significant leverage on US economic policy. Oil as the dominant monetary reality US policy was not understood until the Iranian Revolution of 1979. The US would overthrow governments to keep reserves open, but it did not fight one war in the 1946-1989 period over oil, but worked by proxy. Oil is a problem now, but it is a tremendous mistake to project this backwards in US strategic thinking. In the 1945-1971 period oil is one strategic resource out of many."

LOL.  First off, you attempt to distract the reader into believing that my post was merely about "US Supremacy".  That way, you can go on to refute everything I said.  Very Roveian of you.  KUDOS!

Next, you make this hilarious statement which I just have to refute eventhough it doesn't have shite to do with my original post:  

The US would overthrow governments to keep reserves open, but it did not fight one war in the 1946-1989 period over oil, but worked by proxy.

This one really made me laugh.  You admit that the US overthrew governments by proxy, but you claim that the US did not fight one war in the period of 1946-1989 over oil.  This is semantic bullshit.  Nice try.  

When you overthrow governments by proxy, you are committing acts of war, my friend.  You can play with words all you want, but when a country funds counterinsurgency campaigns, supports death squads, and causes coup d'etats, that country is engaged in war, albeit a devilishly sinister and covert war.

You can play with semantics all you like, but overthrowing Mossadegh in Iran with a tank or with a CIA backed campaign is only different in the form, not in the result.

5. The position of the US Dollar as a unit of account adds little to GDP. Conversion of countries such as Venezuela, which use the dollar as a unit of account, and do not have significant wealth to store, means very little....blah blah blah...

Here you go again Stirling, confusing apples with hand grenades.  Off in your world of verbal masturbation, you are now ranting about GDP.  Far be it for you to realize that GDP differs from GNP in that GDP EXCLUDES inter-country income transfers.  So what the heck are you talking about GDP for?  

I'm skipping your #6 because, frankly, your ranting was starting to get on my nerves.  Which leads us to your #7:

7. Which leads to the worst part, the conspiracy theory bullshit that Iraq converting to Euros had any part in causing the invasion. It did not trouble the sleep of even the little-est neo-con....

Citation please, Stirling?  Can you please tell me where you are pulling this from?  

You see, in my post I humbly offered up referenced facts which suggest the possibility that currency played a part in the decision to invade Iraq.  I did not say "this is the way it is, like it or not!"  As a rational observer, I believe it's prudent to consider all possible theories, regardless of my own personal beliefs, until such time as a theory becomes untenable on it's own merits.  

Guys like you begin with a conclusion, then work backwards until you've created a comfy path that you can live with.  Accordingly, for people like you, "being rationale" begins with an emotional response.  That is hardly "rationale" if you ask me.  That is delusion, my friend.

Labeling an alternative (yet viable!) theory as "tinhat conspiracy" is just a way to relieve oneself of the pain of having to endure an uncomfortable truth.  

Have you ever heard the anecdote about the child who loses a quarter on the dark sidewalk?  Rather than look for the quarter on the sidewalk, where there is no light, the child searches for the quarter in the street where there is more light.  Why does this anecdote remind me of you, Stirling?    

2.  Why did you choose to take such a rude tone?

I find it most remarkable that you chose to take such a rude tone with me Stirling.  I am relatively new to the Kos board, and I posted my message in good faith.   Akin to a bully, you felt the need to flex your veteran status on Kos against a relative newbie.  Congrats!

All you had to do was recite some buzzwords, make some misguided conclusions, and voila, you had an entire coalition of followers who believed what you said without second thought.

I wonder why?

Could it be that perhaps a few people in the Kos community are scared shitless of the possibility of a currency crisis?  Could it be that my original post made some people a bit too uncomfortable?    Could it be that Stirling's post was a welcome bit of "gospel" to a group of people who just can't stomach the possibility of the floor dropping out?

"Say it ain't so Stirling!  Say it ain't so!"

"Thank you Stirling!  Thank you!"

Here are some facts that cannot be refuted.

In 2000, Iraq switched from petro-dollars to petro-euros.
In 2003, Iraq was invaded and occupied Iraq switched back to the petro-dollar.
In 2003, Venezuela moved to replace the dollar with the euro.
Beginning in 2003, there has been a remarkable increase in chatter related to attacking Venezuela.
In 2005, Iran has made gestures that it will switch to euros.

Do what you wish with these facts.  I simply offer them up.

3.  How much money do you have tied up in the United States market?

Due to the fact that Stirling responded to my original post with such rudeness and arrogance, the question begs to be answered:  "How much money do you have tied up in the United States market, Stirling?"

Originally posted to The Bulldog Manifesto on Tue Oct 11, 2005 at 04:11 PM PDT.

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Comment Preferences

  •  Good Lord (4.00)
    Suddenly I see so much promise in the possible insulting creativity of this new tagging feature.
  •  Wow...perhaps you two should (4.00)
    Take it outside.

    *This site is slower than Bush's reaction on 9/11.*

    by Chamonix on Tue Oct 11, 2005 at 04:07:30 PM PDT

  •  oooooh....Cat Fight! (4.00)

    ...Tengo una remera del Che y no sé por qué...

    by PhillyGal on Tue Oct 11, 2005 at 04:13:36 PM PDT

  •  Did this need to be a diary? (3.16)
    It looks a lot more like it should be an extended comment in Stirling's diary.

    Beyond that, you misconstrue Stirling's criticism of your original diary. The way I read him, he didn't object to the idea of a hegemonic dollar. Rather, he took issue with your portrayal of that hegemony as being based on dollar-denominated petroleum sales.

    He did that with substantive arguments, solidly grounded in economic theory. Your reply, unfortunately, relies more on ad hominems than on data, which leads inescapably to the conclusion that Stirling knows what he's talking about, and you don't.

    •  Usually I would agree (4.00)
      with you but I think Sterling was impolite with the title of his diary. I'm pretty against call out diaries but have to admit that I would have been pretty pissed and hard pressed not to respond as this one has.
    •  By your same logic ... (4.00)
      Stirling's diary should have also been an extended comment in BDM's original diary. This diary seems to me to be nothing more than quid pro quo.

      Likewise with the ad hominem.

      I don't really have any dogs in this fight as to who is more correct, but do you really think that Stirling backed up his arguments with more substantive data than BDM? I generally have a tremendous amount of respect for Stirling, but I didn't find this last diary of his to be one of his more pursuasive ones.

      •  I thought Stirling (none)
        was quite persuasive, and I thought this diary was very very thin.

        Stirling should reconsider beig so inflamatory. There was really no need for it. He's in a different league from this guy - and with authority comes responsability. He should have made his points politely, and then maybe he could have educated this person. Now its just a dumb flame war, which doesn't do anyone any good.

        Come get lost in our world:

        by MonkeyDog102 on Tue Oct 11, 2005 at 04:51:07 PM PDT

        [ Parent ]

    •  Or, failing that, (none)
      a pointed e-mail.

      Visit and follow every 2006 Senate race.

      by AnthonySF on Tue Oct 11, 2005 at 04:29:06 PM PDT

      [ Parent ]

    •  I'm just wondering (4.00)
      why you question whether this should be a comment on Stirling's diary instead of a diary itself?

      And at the same time I'm noticing that you didn't question Stirling about why he put up a diary instead of responding to Bulldog M's diary as an extended comment.  Good for the goose...?

      I'm not taking sides, but if I worked hard on something -- whether it was right or wrong -- I would be offended if I was raked through the coals in such an inciteful way, led by a title that blasphemed my name.

      Honestly speaking I don't know economics, I just skimmed through both diaries and didn't click on links so I don't know who's right and who's wrong.  I did learn stuff from both sides though and now have some things to think about.  And I'll eventually dig through both of them and hopefully end up learning something worthwhile.

      However I'm not commenting on content here.  I'm commenting on intent.  The rebuttal seemed a bit agitated and confrontational and the piling on here is just ugly.  

      Again, as you say, if the point needs to be made, then why wasn't it added to the original diary as a comment, rather than standing up on a soapbox and shouting.  This is not the best way to debate or discuss issues. We're just not that important.

      •  Fair questions (none)
        Stirling did much more than rebut Bulldog Manifiesto's diary -- he went into significant detail on how dollar hegemony developed historically, both before and after WWII. That is, he went well beyond BDM's analysis, providing a substantively different analysis of the point. That degree of new content, in my mind, justifies a new diary.

        Bulldog Manifiesto, however, does little more than repeat the points he made in his original diary, while at the same time substantially misconstruing the nature of Stirling's criticism. He insists, loudly, on the points he made the first time around, without addressing the meat of the criticisms made of those points.

        Stirling was inflammatory, and why he chose to respond in such an angry fashion is beyond me. I'm certainly not trying to justify his ad hominems. Rather, I just want to point out that he's doing a lot more than just attacking the messenger, in significant enough degree to justify a new diary.

  •  We have to feel safe.... (4.00)
    Oce I caught Armando saying bad things to another poster and I chastized him (in a teacherly kind of way).
    He then said bad things to me. That's what makes Armando - Armando.
    And that's why I teach. You have to take those flying scotch-tape dispensers without feeling personally violated. It's the hormones which make the learning process proceed.
  •  Mastery of Illogic .... (none)
    "In 2000, Iraq switched from petro-dollars to petro-euros.
    In 2003, Iraq was invaded and occupied Iraq switched back to the petro-dollar.
    In 2003, Venezuela moved to replace the dollar with the euro.
    Beginning in 2003, there has been a remarkable increase in chatter related to attacking Venezuela.
    In 2005, Iran has made gestures that it will switch to euros."

    The European Union uses Euros. So when are we invading it?

  •  As long as (none)
    the US has interest rates on tbills that are significantly higher than the rest of the developed world (and in a large enough supply) our currency will stay supreme.  Essentially, there are currently 2 currencies in the world that could be used as primary reserve type currencies, ours and the Euro.  With the Euro being new (and already rumors of countries pulling out) and offering an abysmally low interest rate it is hard to see it taking the place of the dollar anytime soon.  Also, as long as the US consumer fuels the world economy the dollar will continue to be the currecy of choice, as you are going to be paid in dollars and converting all of them will drop the value and kill your economy's supporting instrument in the process.  Finally, what Iran and Venezuela has little bearing as they are small players and all that happens is people buy their oil in Euros and then sell it again in dollars, so the net effect is zero.  Until the next super great depression, the dollar will remain the top currency in the world.
  •  my brain hurts (none)
    i read the entire stirling diary and thought i had learned a lot...nothing i cared about particularly but i was thinking i expanded my knowledge.

    now i find out its all hooey....whatdafuck????

    i say no more economics discussions...and if boys want to fight they should drop their pants and the boy with the bigest weiner wins

    anyone see the movie the dreamers? beyond the sea in french!!! singing that next time i go to gay karaoke

    I wish I had a penis on the back of my head.

    by anna in philly on Tue Oct 11, 2005 at 04:18:24 PM PDT

  •  These slow news days seem to cause trouble (4.00)
  •  I'm recommending this (4.00)
    Fight! Fight! Fight! Fight!

    Honestly, I don't even understand any of it.

    But I'm microwaving the popcorn.

    "It is a common delusion that you make things better by talking about them." - Dame Rose Macaulay

    by Zackpunk on Tue Oct 11, 2005 at 04:23:43 PM PDT

  •  The time some people have. . . . (none)

    "Yesterday's news is tomorrow's fish and chips paper." -- Elvis Costello

    by Vico on Tue Oct 11, 2005 at 04:26:07 PM PDT

  •  While I am not endorsing the 'persoanlity' aspects (4.00)
    of this exchange... I am glad you are firing back at what I saw as a massive polemic in obfuscation form Stirling Newberry, whose posts and diaries I usually respect.

    Anyone who thinks that oil and petrodollars did not play an important contributing factor in invading Iraq is simply not facing reality.

    One of the only things keeping the dollar stable and inflation relatively under control is the demand that oil be traded in dollars.

    Purchasing dollars (ala China) is what underwrites our fiscal policy and keeps interest rates low. China and other importing nations trading in and purchasing Euros or other non-dollar currencies for oil, would collapse the dollar market and rocket interest through the roof in order to keep funding our fiscal deficits.

    Given that more bubbles than a cheap bottle of Freixenet are floating on this artificially low interest rate, from variable rate mortgages to credit-cards, the whole shootin' match... this is why maintenance of the dollar hegemony (in a strictly cold calculus) is actually one of the only legitimate arguments on why we had to invade Iraq.


    Mitch Gore

    Nobody will change America for you, you have to work to make it happen

    by Lestatdelc on Tue Oct 11, 2005 at 04:26:24 PM PDT

    •  Doesn't Stirling agree with you? (none)
      I thought the point of his diary was, in agreement with you, that the danger is huge oil consumers like China creating a non-Dollar market for oil.  He was just pointing out that small fries like Venezuela switching their currency of accounts means almost nothing.  Its what currency the big consumers want to pay with that matters.  Certainly, the currency that oil is sold in makes some difference, but not that much if all the oil consumers hold Dollars and are just buying Euros in order to immediately buy oil.  The only danger is if it causes a shift to Euros as the standard reserve currency.
      •  But trading oil in dollars is what (4.00)
        is artificially floating the dollar as the reserve currency. Venezuela shifting to Euros means that the number #2 exporter of oil o the US forces the US to start buying Euros to import oil, likewise if China and other customers (and growing) shift to Euros for oil as well as the North Sea reserves drying up, then yes, the Euro could easily be replaced as the reserve currency of choice, which is where the danger lies.

        I didn't jump into TBM's original diary on the Venezuela to Euro issue because I don't yet see it as a real tipping point (or a point of no return) yet. So I think TBM's original thesis is overwrought. But Striling's rebuttal simply went off the rails with his statements, that Iraq switching to Euros for oil transactions was tin-foil shit, etc. etc. which it isn't These are real issues with real large scale implications.

        The prospects of Iraq dumping cheap oil on the market and in Euros if sanctions ever got lifted was a black-hole scenario for Bush/Saud.


        Mitch Gore

        Nobody will change America for you, you have to work to make it happen

        by Lestatdelc on Tue Oct 11, 2005 at 04:48:38 PM PDT

        [ Parent ]

        •  Hey I have a question (none)
          If Venezuela charges in Euros for oil, and we have big-time inflation, thus making the dollar weak against the euro, won't it make their oil especially expensive?

          Maybe I don't get it. I kinda suck at econ.

          •  It will depend on what (none)
            the rate of Dollars to Euros to barrels of oil are but generally yes it would make it more expensive for U.S. consumers. But increase the profits of Venezuela and make it relatively less expensive for Euro based countries.


            Mitch Gore

            Nobody will change America for you, you have to work to make it happen

            by Lestatdelc on Tue Oct 11, 2005 at 05:06:56 PM PDT

            [ Parent ]

            •  Wouldn't it also (none)
              make Saudi oil cheaper than venezuelan oil?
              •  In a vaccum yes (none)
                but the demand is not going down and in fact going up, as North Sea oil production bottoms out would bring market pressures to nominally raise SA crude as well. It would put pressure on other OPEC to switch to Euros, including SA. Of course that might be a third rail for Saud since US military hardware and our trained proxy army is what keeps house Saud in power.


                Mitch Gore

                Nobody will change America for you, you have to work to make it happen

                by Lestatdelc on Tue Oct 11, 2005 at 05:17:47 PM PDT

                [ Parent ]

              •  Surplus (none)
                Yeah, but it's not like there's a bunch of oil-rich nations that aren't selling us oil waiting to jump in the market once Venezuela's price goes up. There's another diary out there tonight that talks about the demand for oil outstripping suply by Thanksgiving. That's a seller's market.


                You see, what confuses the world is the incongruity between the swift flight of the mind and matter's vast clumsy slowness...

                by Hauer Santos on Tue Oct 11, 2005 at 05:22:56 PM PDT

                [ Parent ]

        •  Ugh... (none)
          the Euro could easily be replaced as the reserve currency of choice, which is where the danger lies.

          Should read:

          the Euro could easily be replace the dollar as the reserve currency of choice, which is where the danger lies.


          Mitch Gore

          Nobody will change America for you, you have to work to make it happen

          by Lestatdelc on Tue Oct 11, 2005 at 05:04:31 PM PDT

          [ Parent ]

        •  Umm (none)
          I dont think America would be upset at the prospect of dumping cheap oil, regardless of the currency it is sold in.  We would just buy Euros to buy the cheap oil.  I think Stirling's point was that the position of the Dollar is in fact not propped up by oil sales in Dollars but by the status of the US as the prime consumer market (hence the prime suppliers dont want to sink our buying power) and the high interest rates offered on Dollar denominated bonds.
          •  I know that was Strilings thesis (4.00)
            but I posit that it is wrong. It is both because of our consumer markets and the fact that China et all have to return dollars to buy oil that allows the US to sell its debt so cheaply.

            Why would anyone want to keep dollars as a reserve currency when the EUros is the currency of choice to buy oil (a key commodity)...?

            China will no eternally fund US debt, and has a large enough untapped potential consumer base to drown the entire North American continent.

            Not that it will likely happen, but China already rapidly building the manufacturing base, will be the largest growth in oil consumption and the leading underwriter of US debt. If China simply stops, it would cripple the US economy and they could easily continue to supply a vastly under-tapped domestic consumer market to pick up the slack.

            Would China really give two shits about the dollar if it could buy oil in Euros and sell its cheap manufactured goods to Europe and its own growing domestic market?

            The only worry for CHina is its current exposure, which we already see signs it is slowly easing away from. China won't pull the plug overnight, but the dollar as a reserve being sacrosanct is a fools "truism".


            Mitch Gore

            Nobody will change America for you, you have to work to make it happen

            by Lestatdelc on Tue Oct 11, 2005 at 05:13:52 PM PDT

            [ Parent ]

      •  I wouldn't exactly call (4.00)
        Venezuela small fries at least as far as oil production they rank 11 in billion barrells per day.  Above say Iraq, above say the United Arab Emirates.

        There is no way to peace. Peace is the way. - Mahatma Gandhi

        by otis704 on Tue Oct 11, 2005 at 04:53:00 PM PDT

        [ Parent ]

  •  Shouldn't both of these nitwits... (4.00)
    ...get a timeout from posting/replying to diaries for a while?  Works with my two year olds (the time out, that is; they're not posting diaries--yet).
  •  AFDB (none)

    Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it. - Mark Twain

    by Rolfyboy6 on Tue Oct 11, 2005 at 04:28:40 PM PDT

    •  I like it! (none)
      Can I order one from you?

      Last two War Presidents were from Texas. Gore/Clark 2008

      by mattes on Tue Oct 11, 2005 at 05:06:32 PM PDT

      [ Parent ]

      •  Instructions for making (none)
        your own Aluminum Foil Deflector Beanie are here.  Be sure to check the testimonials page. This site may have been the style guide for Bulldog Manifesto (NOT to be confused with Kossack Bulldog).

        Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it. - Mark Twain

        by Rolfyboy6 on Tue Oct 11, 2005 at 05:43:45 PM PDT

        [ Parent ]

  •  BTW... (4.00)
    not all "veterans" of this site are "bullying" newbies. Some are defending your diary here.


    Mitch Gore

    Nobody will change America for you, you have to work to make it happen

    by Lestatdelc on Tue Oct 11, 2005 at 04:39:26 PM PDT

  •  Snap!!! (4.00)
    No he dihint jus say dat!!!  Pull out the popcorn cuz it's on!!!
  •  ASDF (4.00)
    1. What (who?) is ASDF and why do people type ASDF? I missed the virtual memo.

    2. I read Sterling's post before Bulldog this afternoon. Sounded like Sterling kicked Bulldog's dog so hard that Bulldog's dog's granddog felt it.

    3. Then I read Bulldog post (right now) which makes sense since its an economic theory not a postulate/theorom.

    4. Being bitchslapped virtually on the conjecture of idiocy and ignornace deserves a turn of the cheek which Bulldog delivered.

    Finally, I dont know who wins this argument but I think some brain cells from my early college ganj days have returned to my membrane.

    Thanks Bulldog and Sterling!

    "We must be the change we wish to see in the world." - Mahatma Gandhi

    by optimusprime on Tue Oct 11, 2005 at 04:55:20 PM PDT

  •  I just want to add.... (none)
    that JFK was the first president to try to print US currency, having taken the responsibility from the Fed.

    Last two War Presidents were from Texas. Gore/Clark 2008

    by mattes on Tue Oct 11, 2005 at 05:05:09 PM PDT

  •  The dollar, international reserve currency (4.00)
    The dollar being an international reserve currency -- which it is because other countries need dollars simply to buy oil -- makes the US not subject to the usual laws of international trade. Usually, if a nation runs a persistent trade deficit, its currency will depreciate until foreign goods become so expensive that its residents lower their consumption of foreign goods until the deficit disappears. But the US has run a trade deficit since the late 1970s, and it has exploded under Bush, with negligible downward pressure on the dollar. No other country could get away with this.

    And yes, this is an important issue. This in effect places the US in a position of being able to charge a tribute on the rest of the world, in the form of ever-accumulating dollar reserves held by foreign, mostly Asian, central banks. If the dollar were not an international reserve currency -- which it would not be if other countries followed Iraq's example and stopped pricing oil in dollars -- there is no way BushCo would have been able to finance its invasion and occupation of Iraq, its tax cuts for the rich, or its other financial recklessness.

    A good primer on the role of the dollar in international finance is this interview with Michael Hudson, the author of Super Imperialism.

    In the 20th century, it was Nazi Germany. In the 21st, it is Republican America.

    by Alexander on Tue Oct 11, 2005 at 05:12:30 PM PDT

    •  Need dollars to buy oil? (3.00)
      Wrong! Countries keep dollars as investments. They aren't always the best investments, but they've never been the worst.

      If you need dollars to buy oil, you can always, instantly, buy dollars, right at the very moment you are buying the oil. The financial world is one large computer network. You don't need to own a single dollar to buy things with dollars. You just need to spend enough of whatever your currency is to buy the equivalent amount of dollars, plus a small fee to the bank handling the currency exchange. So it goes out of your account in whatever currency you happen to have, and into the account of whoever's selling you the oil in whatever currency they happen to want to hold.

      That it's priced in dollars doesn't even mean that the seller wants to end up with it in dollars. It just means that they want the price to be linked to the value of the dollar, since it's been, over time, the most stable currency. Plus, it makes it easier to do business with the large American market which really will be handing you dollars. We Americans aren't so handy with currency exchange calculations.

      But no country needs to keep a single dollar to buy oil priced in dollars. The banks handle the transaction transparently, and the fees on transactions that large are modest.

      So Bulldog's whole theory is amazingly ignorant.

      •  Any introductory course in international trade... (none)
        will teach you that there is a transactions demand for foreign currencies. Foreign currencies are not held just as "investments". It is clear to anyone by now that dollars are a very poor investment: George Soros has gotten out of dollars, reportedly. Considering that dollars are a poor investment and that Americans have virtually nothing to sell to foreigners besides weapons systems, it is likely that oil being priced in dollars keeps foreigners nevertheless willing to hold on to dollars (with the exception of our major trading partners of course, who hold on to dollars to keep their exports to the US up, not as an "investment".) Since everyone needs oil, and oil is priced in dollars it is sensible to hold on to some dollars, simply as a risk spreading strategy, since if the dollar goes up temporarily for whatever reason -- it is only its long-term decline that we can be certain of -- you'll make a loss when you get around to buying your oil.

        In the 20th century, it was Nazi Germany. In the 21st, it is Republican America.

        by Alexander on Tue Oct 11, 2005 at 05:45:16 PM PDT

        [ Parent ]

    •  Thank you for the moderate tone (none)
      and the informative Hudson links. Bullshit and Dingleberry's little ego slam has brought some good with it.

      The Moe Sizlak Experience, featuring Homer Simpson.

      by lepermessiah on Tue Oct 11, 2005 at 07:16:25 PM PDT

      [ Parent ]

  •  Actually... I think (4.00)
    You did make some valid points, alot along the lines of an article in the Asian Times - which makes the same jist.  Stirling, who I greatly respect and admire, did make some blunders - I get what you say about the wars vs proxy wars - the Americans didn't push the British and French out of the Middle East in the 50s and 60s because of 'just some other commodity'.  But many here are rubbed a little raw by mentions of Venezuela.  I think you unfairly bore a bit of the brunt of the friction between the 'reality-based' faction and the faction that seems to worship Chavez as some ancient Aztec god.  There are no shortage of 'Only Chavez can save us now! diaries that get dozens of recommends, and there's no way to put a word in edgewise without being denounced as a neo-con fascist Rovian warmonger.

    As for Venezuela, Iraq, and Iran and euros, I do think you are putting the cart before the horse here.  You aren't talking about countries making decisions in a vacuum.  These are countries that have in their best interests a closer relationship with the 'good cop' European foreign policy represents.  Basically, US had designs on these countries before, then switch to euros came after, not the other way around.

  •  He may be a pompous jackass... (none)
    ... but he's correct in his analysis of your post. But, let me ask you this... if you're upset with his    "rude tone", why are you blathering on about "mastubatory parroting"? His post started out rudely, but dissected your points rather than attacking you... which I note you couldn't really bother to do. Ah, well. I guess none of us like being called on our BS, as erudite-sounding as it might be.
    •  Actualyl Newberry's diary didn't disect jackshit (4.00)
      It was sleight-of-hand nonsense and as this rebuttal points out, the who thrust of Newberry's "history lesson" actually points directly to the thesis TBM was talking about.

      As I mentioned up-thread, I think TBM's claims about Venezuela are a little hyperbolic, but the underlying factors are real and substantive.

      Newberry calling the petroeuro v. petrodollar issue "tin foil hat" as it relates to being a contributing factor in invading Iraq is one of many points Newberry's diary runs off the rails. I respect Newberry and most his contributions usually, but he is wrong on this one.


      Mitch Gore

      Nobody will change America for you, you have to work to make it happen

      by Lestatdelc on Tue Oct 11, 2005 at 07:31:48 PM PDT

      [ Parent ]

  •  Well, I know neither (none)
    Stirling or Bulldog.

    I do know this, when the pissing stops there's going to be a lot of wet people in Amrica.

    The Outstanding Public Debt as of 12 Oct 2005 at 03:02:39 AM GMT is: $7,989,598,965,798.04


    $4,610,908,324,352.83 Debt Held by the Public

    $3,379,734,906,823.11 Intragovernmental Holdings

    $7,990,643,231,175.94 Total Debt

    11:08:10 P.M.  $8,042,662,267,267.09

    Why the difference? The last debt clock includes interest paid to date in 2005.

    8 trillion dollars. Doesn't make any difference if Bulldog or Stirling is correct or not, does it?

    If we all want something to yell about, something to debate, something to argue over,..... 8 trillion dollars should work.

    While everyone is arguing the nuances, the fucking interest on our national debt will eat your lunch, your kid's lunch, your grand kids' lunch for all time.

    The national debt isn't oil's fault, not Bulldog's or Stirling's fault, not George Bush's fault. The national debt was created by two entities.

    The Congress of the United States of America which belongs to both partys and the CITIZENS of America. We allowed the corporate political crooks to do their dirty deeds.

    Bulldog, Stirling, grow up. Help us take America back.

    •  Sorry but you fail to see that this is exactly (none)
      what oil money allows. no nation on earth could have their debt underwritten like that without the need for the rest of the "developed" world to keep buying dollars so as to purchase the key commodity of oil. This is what keeps the whole credit card ship afloat and out of the Argentinean inflation-land.

      That is what gets threatened should oil trade in something other than dollars. It has artificially kept interest rates lower than this insane debt/deficit spending binge we have been on since OPEC embargoes of the early 70s.


      Mitch Gore

      Nobody will change America for you, you have to work to make it happen

      by Lestatdelc on Tue Oct 11, 2005 at 09:45:09 PM PDT

      [ Parent ]

      •  OMG, let's call it anything you want (none)
        I call it the national debt of 8 trillion dollars.

        If oil did that to us, fine. Now let's see what we can do to get out from under it.

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