Monday, December 06, 2004

How Far the Mighty Have Fallen
Opec may look at trading oil in euro
Economic War Against the World

The U.S. national debt is 7 trillion dollars, 13 trillion if you add State, municipal and consumer debt and 18 trillion if the Bush economic 'plan' is fully enacted. The entirety of the third world's debt is just about two trillion dollars.

Oil is traded in dollars. Instead of converting between say ZAR and USD or EURO and USD, accumulating monetary exchange fees, money sits inside US banks in USD to be transfered to/from oil companies as oil changes hands. If Opec decides to change there preferred currency from USD to EURO, money moves out of US banks into foreign banks. This is compounded by the fact that any major run on the US currency will cause foreign countries to move their treasuries holdings from USD to some foreign currency. Taiwan (approx $57 billion of Treasuries), Japan (approx $740 billion of Treasuries).

Another point of intrest is how an economic war plays out.

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