My grasp of macroeconomics is only ok and it's been a while since I studied it in any serious way. But here are some no doubt wildly over-simplified speculations and hopefully someone else will chime in to tell us how far off I am. If the bourse sells oil for euros, this will result in an increased demand for euros. Since I am not sure how much of the world's oil would go through there, I can't speculate as to the size of the increase, but it presumably will be accompanied by a weaker-than-otherwise demand for dollars. If demand for dollars decreases, their price will fall. A falling dollar will mean that our paychecks, in dollars, will buy fewer imported goods -- such as oil for example. It will take more dollars to fill your gas tank or to buy that Scottish whiskey.
American goods on the other hand will cost somewhat less abroad so there may be increased demand for American exports -- whatever they are. I am sure there are some, but the US is a net consumer of goods at the moment and has been a service economy for some time. Cars, probably, except that we don't really make the gas-efficient small cars the rest of the world prefers..... Short answer, it seems likely to cause economic hardship, unemployment and recession. Possibly an increase in manufacturing. Depending on the numbers... yes, I think the economy could collapse. Dama On Fri, 11 Mar 2005 09:18:29 -0500, John Stanley <[EMAIL PROTECTED]> wrote: > say we dont invade iran, what kind of affect could the loss of the us > dollar's dominance have on us day to day americans? will there be rampant > inflation, or other effects for everyday americans? could our country > collapse? > > -----Original Message----- > From: Dana [mailto:[EMAIL PROTECTED] > Sent: Friday, March 11, 2005 9:10 AM > To: CF-Community > Subject: Re: Onward to Iran > > Yes. It sounds reasonable though I don't have enough background to > reaslly endorse it. Part of why I agree with John that yes, it's > pretty scary > > On Thu, 10 Mar 2005 22:31:27 -0400, Andrew Grosset <[EMAIL PROTECTED]> > wrote: > > There is an interesting opinion here about the demise of the American > dollar > > (from :http://www.energybulletin.net/4634.html ) > > > > [quote] > > Iran will move a step closer to establishing its much-publicized oil > exchange next week, when the Oil Ministry and the Ministry of Economic > Affairs and Finance are set to sign a memorandum of understanding (MoU), > which will set the ground for the high-profile initiative. Hossein Talebi, > the National Iranian Oil Company's director for information technology > affairs, told Fars news agency that the project would enter the executive > phase immediately after the MoU is signed. The official further said that > petrochemicals, crude oil and oil and gas products will be traded at the > petroleum exchange. "The oil exchange would strive to make Iran the main hub > for oil deals in the region", he said, adding that most deals will be > conducted through the Internet ... Iran announced in September its petroleum > exchange will become operational by March 2006 ... > > > > ..........As William Clark argues in his forthcoming book Petrodollar > Warfare (New Society, summer 2005), the denomination of global oil sales in > US dollars has kept the American dollar artificially strong throughout the > period from 1974 to present, enabling Washington to run up huge > foreign-funded government debt and trade deficits. Tehran's action, whether > or not deliberately calculated to do so, could cause a dollar crash. Iraq > was the first nation to announce intentions to sell oil for euros instead of > dollars (in November 2000), and one of the first acts of the provisional > government put in place by in invading US forces was to return oil sales to > the dollar standard.... > > > > ......One of the Federal Reserve's nightmares may begin to unfold in 2005 > or 2006, when it appears international buyers will have a choice of buying a > barrel of oil for $50 dollars on the NYMEX and IPEor purchase a barrel of > oil for 37 to 40 euros via the Iranian Bourse ... A successful Iranian > bourse would solidify the petroeuro as an alternative oil-transaction > currency, and thereby end the petrodollar's hegemonic status as the monopoly > oil currency ... > > > > [/quote] > > > > > > > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Discover CFTicket - The leading ColdFusion Help Desk and Trouble Ticket application http://www.houseoffusion.com/banners/view.cfm?bannerid=48 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:150216 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
