Too Little Too Late For The Dollar?

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posted on Mar, 19 2006 @ 04:42 PM
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After some research and reading, it seems as though our Dollar may be experiencing very tough times ahead. What we have is a mix of factors that will not only discourage but most likely push foreign countries away from The Dollar. The climax of the events to come will occur this coming week of March 20-26, 2006. It will be one of great importance.


First we shall start with the fact the M3 report will be discontinued on March 23 2006.

www.federalreserve.gov...



On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.


For those that don't know the M3 report is a way to determine the amount of dollars in circulation. The main different between the M3 and M2 & M1 is the fact that the M3 contains eurodollar deposits. Now discontinuing the M3 report wouldn't be that big a deal, IF it were an isolated incident that had nothing to do with other events taking place that same week. What events may we ask?


Well it just so happens that Monday Mrach 20, 2006 Iran will be opening its Oil Bourse. They plan to have their oil trade in Petro-Euros.

www.energybulletin.net...



The upcoming bourse will introduce petrodollar versus petroeuro currency hedging, and fundamentally new dynamics to the biggest market in the world - global oil and gas trades. In essence, the U.S. will no longer be able to effortlessly expand its debt-financing via issuance of U.S. Treasury bills, and the dollar’s international demand/liquidity value will fall.


The most recent news reports indicate the oil bourse will start trading on March 20, 2006, coinciding with the Iranian New Year.[16] The implementation of the proposed Iranian oil Bourse – if successful in utilizing the euro as its oil transaction currency standard – essentially negates the previous two criteria as described by Mr. Yarjani regarding the solidification of a petroeuro system for international oil trades. It should also be noted that throughout 2003-2004 both Russia and China significantly increased their central bank holdings of the euro, which appears to be a coordinated move to facilitate the anticipated ascendance of the euro as a second World Reserve Currency.


What this means is that the Petro-euro and the Petro-dollar will be in competition for the control of the oil trade monopoly that the US has held on to for many years. For those who don't know, many countries have our money invested because oil is traded in dollars, so they need dollars. Should our monopoly on the oil industry fall because of trade in euros, the value of the dollar will fall at a decent pace. This is because the need of the dollar for oil trade will diminish within time. Such a situation, though damaging to the US Oil market, wouldn't normally be a panic situation. The only reason for a panic in the white house is the amount of national debt we have created within the past couple of years. Though it would be damaging, had we been in a surplus our system would not have taken the extreme amount of damage it will now. What effects will this have on you though?


That's a good question. To answer that you will have to ask yourselves a couple more questions. A question to start with is how much material assets do you own such as gold and silver? as a pose to paper currency?

sg.biz.yahoo.com...



"Just as the U.S. role as world superpower won't last forever, neither will the dollar's role as the world reserve currency," said John Nugee, director of the official institutions group at State Street Global Advisors. SSgA, an arm of State Street Corp. (STT), is the world's largest institutional money manager with US$1.4 trillion in assets under management.


"A lot of this region is sleepwalking a bit about the long-term future of the dollar," Nugee said. "I hope that the dollar doesn't become an asset that people have too much of and nobody really wants," he said.


As seen, the dollar is losing its hold on the international trades and could be looking at a world of trouble....literally. This is because if the dollar should take a sudden collapse from the Iran situation, most other economies will suffer a great deal. This is the reason why most countries do not want to oppose against actions against Iran, because they will be equally effected by the blow iran is attempting to deal the US economy. That is not all though. Like we asked ourselves before, how will this effect you?


www.financialsense.com...



The fact is that for a while it was only the dollar that was losing value. However, as other central banks inflated to mitigate the dollar’s decline, the world’s savers began to take notice, and reacted by fleeing all fiat currencies in favor of gold. The old saying that “paper currencies do not float, but merely sink at different rates” is becoming increasingly evident with each up-tick in the price of gold.


The reality though is that it is not gold which is gaining value, but currencies that are losing it. This loss of purchasing power is increasingly evidenced by rising nominal prices of both assets and real goods. Do not be fooled by the pretense of higher nominal asset prices that merely reflect depreciating paper currencies. Even though stock prices may appear to be rising, they continue losing value relative to gold.


In short, your money is losing value, and things will continue to become more expensive. That is at the current rate we are going at though. This does not tell you what will happen should the Iranian oil situation occur March 20, 2006. What will most likely occur will be this process in which the dollar devalues at a very increased rate. The reason the dollar will lose value faster is the foreign nations sudden lack of need for dollars.


In conclusion we need to ask ourselves relatively simple questions. Are we too late? Did we put the pieces of the puzzle together a bit too late to realize the dollars downfall? Will we see the kind of depression we could only dream of in fear? A better question to ask yourselves would be, "Am I prepared for this?" Is your life savings in electronic stocks and little pieces of paper?

Grim Reaper


NOTICE: if this is in the wrong section Mods please move it to the appropriate section. i figured since this would all be occuring this week it could be considered current events.

[edit on 19-3-2006 by grimreaper797]




posted on Mar, 19 2006 @ 06:11 PM
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I agree, the future of the dollar doesn't look very bright. But I don't think this is too bad. I think this will encourage our politicians to curb spending and pay more attention to our deficit.



posted on Mar, 19 2006 @ 06:23 PM
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This topic has been under discussion for awhile now here.



posted on Mar, 19 2006 @ 08:08 PM
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Originally posted by Mainer
This topic has been under discussion for awhile now here.

It's been talked about in quite a few places. It's hardly a rehash and there is no need to be condescending.

Global Systemic Rupture



posted on Mar, 19 2006 @ 08:21 PM
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yes i was aware of both of those threads, but i felt they didnt add enough, it didnt have the full story behind it.

my point was to combine the M3, Iran Crisis, Rise in Gold Prices, National Debt, and an overall steady decrease of the dollar which may turn into a rapid decrease between tomorrow and the 26th of March.

O and the reason why the countries that usually help iran simply cant. this as i stated is because of the World effect this will have in the long run.

[edit on 19-3-2006 by grimreaper797]



posted on Mar, 19 2006 @ 08:32 PM
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The dollar may be in trouble but it won't be from an Iranian oil bourse. The start date has been pushed back. Tomorrow was suppose to be its opening day but now they have no idea when it might open. That in itself is suspicious to me.

I've also heard that there are not enough euro's in circulation to replace the dollar so even if a country wanted to switch it wouldn't be able to, yet.

I'm still looking forward to the upcoming week. It seems to have all sorts of predictions attached to it.

Wupy



posted on Mar, 19 2006 @ 08:58 PM
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link me to an article that says its being pushed back, all ive seen is articles of how it will or wont damage us.

The circulation bit is mostly nonsense. they claim that they would have to print like no tomorrow (ive seen it put that exact same way in a couple different articles word for word which was a bit strange) but really they wouldnt have any problem doing such a thing.

he further attempts to accuse this as a "red herring" for the real threat of the highly media covered "nuclear threat". i find that extremely hard to believe considering how it definately seems to be the other way around. In order for it to be a "red herring" at all, dont people have to believe thats the actual threat which a majority of people aren't even aware of. The issue of the oil trade is being severely downplayed by media sources while it seems nuclear iran is all you hear about.

another point to take in is the possibility that this Oil Bourse may be there only real defense against the US. It may be striking its only real blow it can deliver since it may not even have nuclear capabilities.

also keep in mind the steady decline in the dollar without this crisis. this is to say the least discouraging to other countries.



posted on Mar, 19 2006 @ 09:04 PM
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Heres one of the links I was reading:

Iranian Oil bourse hits wall

Hope that helps.

Wupy



posted on Mar, 19 2006 @ 09:07 PM
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www.energybulletin.net...


However, until we hear from official Iranian sources that the trading will be in euros, it is probably unwise to draw too many firm conclusions.


heres one to help with what i was saying, gotta love energy bulletin

like it said we really cant draw conclusions as to whether or not they will because other then one analyst and a british consultant going off of the previous analyst review, theres no official word as to whether or not they are using it.

also the announcement was made by a british consultant? sure he CLAIMS credit for the idea, but really what say does he have? hes really pissing into the wind being the only person to say its not going to happen tomorrow so far that ive seen.


furthermore id like to say i read William Engdahl article and it seemed bias to an extent, but even he didnt claim it couldnt happen on the 20th just that it couldnt have the effect many are saying.

[edit on 19-3-2006 by grimreaper797]



posted on Mar, 19 2006 @ 09:18 PM
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The bourse is just a small part of the dollars troubles. I agree in general with your post so I hope you didn't take it wrong and think I was trying to shoot you down.

As for that bourse, we need only to meet back here tomorrow night to see if it is up and running. That question will answer itself tomorrow.

Wupy



posted on Mar, 19 2006 @ 09:20 PM
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No i didnt take it that way im hoping that it doesnt go through. Personally i want the whole thing to go away...doesnt mean im going to ignore it though.

When i come on tomorrow night i personally hope that this british consultant is right. One of the few only times im hoping im all wrong.

if it does happen tomorrow i wonder what immediate effects will come into play? another iraq?



posted on Mar, 19 2006 @ 09:27 PM
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since we already have similar topics to this in the Other Current Events Forum, but with different angles, this thread will not be closed instead I'm moving it over to Economic Issues. Please continue the discussion there.


Now I do have to ask, what is your opinion of what will happen tommorrow after this Oil bourse takes effect? Is there supposed to be an immediate reaction in the markets? Because I would think the people who fear the dollar weakening would have been and should be currently hedging their bets against it. Is there any current reports or trading going on that suggests that this will happen tomorrow??



posted on Mar, 19 2006 @ 09:36 PM
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well to start, gold is trading pretty high, that means the dollar is losing value as explained in my original post. so to an extent you could say the decrease of the dollar will be and has been happening. this Oil Bourse could be the kick to the leg that knocks over the US economy sort to say.

what do i believe the immediate impact will be should it happen tomorrow? well it depends, i personally believe that they will have a balance between dollars and euros. this will lead to a steady decrease in the dollars worth because it will strengthen the euro while hurting the dollar. eventually it will go into full euro which will be the point where the dollar really starts to hurt. i do believe that this will not only give iran time to adjust but time for them to print out more euros so that it can sustain itself.

My Final Prediction: Should it start tomorrow and use the dollar/euro system, we will take a hit. This hit wont be an immediate killer, but if the US fails to take action against it, within the next 5 years or less it could collapse the dollar. The estimate before the Oil Bourse was next 25 years it will start to really lose its hold on domination of currency, but i believe that this will speed it up a great deal.



posted on Mar, 19 2006 @ 09:41 PM
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thanks grim for that interesting and informative prospective. I hope this of course doesn't happen at all, but I'm relieved to know that negative effects probably wont' show up immediately and take a slower approach in the dollar's decline.



posted on Mar, 19 2006 @ 09:57 PM
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Originally posted by grimreaper797[/I] Research shows our dollar is facing tough times. We have a mix of factors that will discourage and likely push foreign countries away from the dollar. The week of March 20-26, 2006 will be of great importance. First, we shall start with the fact the M3 report will be discontinued March 23, 2006. The M3 report is a good way to determine the amount of dollars in circulation. The difference between M1 & M2 is the M3 contains Eurodollar deposits. It also just happens that Monday March 20, 2006, Iran will be opening its own oil Bourse. Iran plans to trade their oil in Petro-Euros. This means the Petro-euro and the Petro-dollar will be in competition for control of the oil trade monopoly the US has enjoyed for many years.

Many countries use our money because oil is traded in US dollars. Should our monopoly fall because of trade in euros, the value of the dollar will also fall because the demand for dollars will diminish. Such a situation wouldn't normally be a panic situation. The reason for panic in the White House is the amount of national debt we have created in the past 5 years. Had we been in surplus our system would not be at the same risk. If the dollar takes a sudden downturn from the Iran situation, many other economies will also suffer. This is why many countries do not oppose US actions against Iran. They will be equally effected adversely by Iran’s attempt to harm the US economy. Your money is about to lose value. Things you buy will become more expensive.

In conclusion we need to ask relatively simple questions. Are we already too late? Did we put the pieces of the puzzle together too late to halt the dollars impending downfall? Will we see the kind of economic depression we could only dream of? Another question to ask would be, "Am I prepared for this?" Grim Reaper [Edited by Don W]


Comments to be supplied later.



posted on Mar, 19 2006 @ 10:15 PM
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when you post your comments don i will edit this post but to answer your title of "can you handle 6 dollars for gas?" i dont think that will be an issue, i would say when things really go into full swing it will be these two question rather then that one
"can you get your hands on gas?"
"think you can ride a bike for miles on end?"



posted on Mar, 20 2006 @ 08:15 AM
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Can I ask, what is the point of trading oil in a foreign currency if you were the Iranian government? Why dont the Iranians require their produce to be purchased with their own currency? Wouldn't that be a much better prospect for the Iranians?

The oil supply wont last forever and they really should be looking into diversifying their economy. With an increased demand for their own currency their economy would reflect the importance of what it is they offer the World's consumers - the most important natural resource available. Along with the boost to their currency they could increase industry beyond petroleum.

Also, to answer Worldwatcher's question, I think the effects of the dollars decline will be covered up as long as possible. The reason being that it gives those in the know, and with more to lose, a greater chance to convert their stocks to gold before the rest of the populace cottons on to the impending distaster.

That is why I believe the Australian stock market reached 5,000 points for the first time in history today. I even heard a pundit on ABC news exclaim "this looks like a stock market just before a crash but..." and then when on to describe how company profits are solid and that does not indicate a crash. Ofcourse that is complete hogwash, there are more factors at play than corporate profit margins.

The markets are rising and the big wigs are quietly selling their stock just as the Morgans, Rothchilds and Rockerfellers did before the depression. We are in our own Roaring Twenties and most people are too distracted to notice.

[edit on 20/3/06 by subz]



posted on Mar, 20 2006 @ 09:10 AM
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thanks subz


I agree.


, I think the effects of the dollars decline will be covered up as long as possible. The reason being that it gives those in the know, and with more to lose, a greater chance to convert their stocks to gold before the rest of the populace cottons on to the impending distaster.



posted on Mar, 20 2006 @ 11:59 AM
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Originally posted by subz[/I] Can I ask, what is the point of trading oil in a foreign currency if you were the Iranian government? Why don’t the Iranians require their produce to be purchased with their own currency?


If you live in Uruguay for example, you are not likely to have much of the Iranian currency. There is one currency that both you and the Iranians would have, the US dollars. I have read that the US Treasury has printed $400 billion worth of currency but that only $150 billion circulates inside the US.


The oil supply wont last forever and they really should be looking into diversifying their economy. With an increased demand for their own currency their economy would reflect the importance of what it is they offer the World's consumers - the most important natural resource available.


The CIA website gives Iranian oil production at 4 million bbls a day, consumption at 1.5 million and exported, 2.5 million bbls a day. The sale of oil works out to $45 billion at $50 a bbl. The Iranian economy is given at $550 billion. On that basis, I’d estimate the oil income represents a bit less than 10% of Iran’s economy. Median income is $8,100. Market exchange rate is 9,500 Rials equals US$1. The official rate is 4,750 Rials per $1 US. If you were in South Africa and wanted to buy rubber from Indonesia and offered to pay in Iranian Rials, it would be a NO SALE. No one wants a poor country’s currency.


The markets are rising and the big wigs are quietly selling their stock just as the Morgans, Rothschild and Rockefeller did before the depression. We are in our own Roaring Twenties and most people are too distracted to notice.[Edited by Don W]


The “big wigs” are like Martha Stewart, they have INSIDE information you and I are not privy to. But the R&Fs - rich and famous - are buying and selling all the time. Old Joe Kennedy doubled his small fortune by buying stocks when everyone was selling! The key is to know WHICH to buy and WHICH to sell. And that knowledge is usually against the law.



posted on Mar, 20 2006 @ 12:38 PM
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Originally posted by grimreaper797[/I] when you post your comments don I will edit this post but to answer your title of "can you handle 6 dollars for gas?" I don’t think that will be an issue, I would say when things really go into full swing it will be these two question rather then that one, 1) "can you get your hands on gas?" 2) "think you can ride a bike for miles on end?" [Edited by Don W]


Those ubiquitous Chinese-made 49 cc 2 wheelers are remarkable in both quality and performance not to mention price. Also, US oil production is about 7 million bbls a day. About 1/3rd of our consumption. So maybe every man, woman and child will get a bar coded ration card for 10 gallons a month?


Many countries use our money because oil is traded in US dollars. The reason for panic in the White House is the amount of national debt we have created in the past 5 years. Had we been in surplus our system would not be at the same level of risk. This is why many countries do not oppose US actions against Iran. Your money is about to lose value. Things you buy will become more expensive.[Edited by Don W]


I mentioned elsewhere on this thread that over 60% of the US currency is used OUTSIDE the United States. It is truly the one world currency. At least it is in 2006. If you live in Thailand and want to buy coffee from Costa Rica, you will have to pay in US dollars. And etc.





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