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Originally posted by Deetermined
Originally posted by tarifa37
There isnt enough gold (that has already been mined) on earth to pay for oil long term.
Isn't that the truth?
We're already selling 4 oz. of gold for every 1 oz. in existence.
Using gold as a monetary base is unmanageable and too hard to track, therefore leaving inflationary rates to fluctuate out of control.
Originally posted by MidnightTide
UAE, China Agree to Drop Dollar, Trade UAE Oil for Yuan
Wow, we might be seeing the collapse of the dollar as we speak.
Originally posted by majesticgent
So we're going back to the gold standard I see. Realizing that Fiat money is still based on something, which was oil, in the Greenback's case. So now that countries are buying oil with gold the Greenback will lose most of it's intrinsic value.
Now something else will have to replace oil to value the Greenback, or else the value of the currency will come crumbling down sooner than expected.
Originally posted by Gorman91
There was no oil reason to go into Iraq.
The Iraq war was nation building. Nothing more.
The dollar's status as a reserve currency gives the U.S. enormous advantages, and it should be protected ferociously by our public officials.
It means we don't have to repay our debts in foreign currency and that our borrowing costs are cheaper.
To the extent that the rest of the world follows a dollar standard, it also gives us far greater global sway.
China and the Dollar
In 2007 and 2008, MGI estimates, the net financial benefit to the U.S. was between about $40 billion and $70 billion—or 0.3% to 0.5% of U.S. gross domestic product.
And in the year to June 2009, when the dollar appreciated by about 10% due to its safe-haven role, the cost-benefit turned even less positive: We estimate a range between a net benefit of $25 billion and a net cost of $5 billion.
There are two main benefits to the U.S. as issuer of the main reserve currency.
First is interest from seigniorage—the profit made on issuing additional currency to non residents who hold U.S. notes and coins—estimated at $10 billion a year.
Second is the fact that the U.S. is able to raise capital more cheaply because of very large purchases of U.S. Treasury securities by foreign governments and government agencies.
We estimate that these purchases have reduced the U.S. borrowing rate by 50 to 60 basis points over the past few years and are worth about $90 billion to the U.S.
Dollar as Reserve Currency: Mixed Signals
They don't have to incur the cost of changing foreign-currency earnings into dollars.
They don't have to purchase forward contracts and options to protect against financial losses due to changes in the exchange rate.
This will all change in the brave new world that is coming. American companies will have to cope with some of the same exchange-rate risks and exposures as their foreign competitors.
Why the Dollar's Reign Is Near an End