My thoughts on OPEC switching to the Euro.

[techs]

Hmmm. I don't think its such a bad thing if OPEC switched to the Euro.

But I can think of reasons why they won't.

Recently, with oil going up such a huge amount, Europeans have been somewhat aided in that their Euro has gained 40 percent against the dollar in the last 6 years.
The EU countries understand that in order to keep their currency strong and their balance of payments in check, they need keep oil consumption down, below what the average european would use if the market alone dictated the useage. In other words, it may be economically a good decision for every european to use more gas if the market price allowed them too, but would result in ruination to their countries economy.
Which is why OPEC prefers the US dollar. American policy is to let the market fix consumption. Because even large price increases can be borne by most people without significant reduction in use, and American governments policy to allow this even if it hurts our country, the price of oil can rise and rise without significant reduction in consumption.
So if OPEC went to the Euro and suddenly Europeans could afford more gas, the European countries would tax gas more, to secure their countries economic health.

If Americans were suddenly to have to pay for oil based on the Euro, Americans would be more involved in balancing our budget, and balancing our trade. The things that lead to a strong dollar. Since a stronger dollar (versus the Euro) would reduce our gas bills. Great impetus for fixing the American economy.

 

[blackangst1]

I hope you arent indirectly implying the dollar will strengthen if our budget is balanced....

And I never understood why people dont understand the benefits of a weak dollar. There is positives and negatives to both a weak and a strong dollar. since we have a weak dollar now, the advantages arent that bad...for instance, it is easier to export and compete in international markets, the US is more favorable for tourism, and capital markets are great for international investors. Since most people think the strong dollar is favorable, it is important to understand the disadvantages...for example, it is more difficult for US companies to compete abroad, imports are more attractive due to lower international prices, and it is harder for foreign investors to invest in US capital due to heavy borrowing.

Im not saying a weak dollar is favorable, but neither am I saying a strong one is either. It's a tradeoff. But, getting back to my original statement, balancing the budget will not strenthen the dollar. Sure it'll help, but it sure isnt the magic dust.

 

[StageLeft]

I hope you arent indirectly implying the dollar will strengthen if our budget is balanced....

Can't speak for him, but it appears that the dollar is worth little more than used toilet paper now because of the severe trade and budget deficit.

 

[blackangst1]

Originally posted by: Skoorb

I hope you arent indirectly implying the dollar will strengthen if our budget is balanced....

Can't speak for him, but it appears that the dollar is worth little more than used toilet paper now because of the severe trade and budget deficit.

And my point was, a weak dollar has advantages. Clearing the trade deficit (which I dont believe will happen in our lifetime) and balancing the budget wont necessarily strenthen the dollar. Certainly not to where it was in the 90's (but then, it was pretty much propped up and over valued like the rest of our economy then). Alot more has to be in place.

edit: but to respond to the OP (sorry), I would think it unlikely to switch to the euro. In the grande scheme of things the dollar is more stable, not to mention our economy compared to Europe.

 

[boredhokie]

A strong dollar doesn't cause the cost of gas prices or junk at wal-mart to rise, like a weak dollar does. A weak dollar affects the average middle class person - not everyone benefits from a weak dollar.

 

[Stoneburner]

Originally posted by: blackangst1
I hope you arent indirectly implying the dollar will strengthen if our budget is balanced....

And I never understood why people dont understand the benefits of a weak dollar. There is positives and negatives to both a weak and a strong dollar. since we have a weak dollar now, the advantages arent that bad...for instance, it is easier to export and compete in international markets, the US is more favorable for tourism, and capital markets are great for international investors. Since most people think the strong dollar is favorable, it is important to understand the disadvantages...for example, it is more difficult for US companies to compete abroad, imports are more attractive due to lower international prices, and it is harder for foreign investors to invest in US capital due to heavy borrowing.

Im not saying a weak dollar is favorable, but neither am I saying a strong one is either. It's a tradeoff. But, getting back to my original statement, balancing the budget will not strenthen the dollar. Sure it'll help, but it sure isnt the magic dust.

Getting back to your original point, you never showed why it wouldn't strengthen it. You went off on a tangent on a point you cannot be entirely sure the OP was making. I'm amused. you've done your job.

 

[blackangst1]

Originally posted by: boredhokie
A strong dollar doesn't cause the cost of gas prices or junk at wal-mart to rise, like a weak dollar does. A weak dollar affects the average middle class person - not everyone benefits from a weak dollar.

No. A strong dollar makes foreign goods and imports more expensive and US goods to be less competitive, thus higher prices generally. You have it backwards. Thus, a strong dollar DOES affect middle class.


And the weak dollar has little to do with commodities trading.

 

[blackangst1]

Originally posted by: Stoneburner

Originally posted by: blackangst1
I hope you arent indirectly implying the dollar will strengthen if our budget is balanced....

And I never understood why people dont understand the benefits of a weak dollar. There is positives and negatives to both a weak and a strong dollar. since we have a weak dollar now, the advantages arent that bad...for instance, it is easier to export and compete in international markets, the US is more favorable for tourism, and capital markets are great for international investors. Since most people think the strong dollar is favorable, it is important to understand the disadvantages...for example, it is more difficult for US companies to compete abroad, imports are more attractive due to lower international prices, and it is harder for foreign investors to invest in US capital due to heavy borrowing.

Im not saying a weak dollar is favorable, but neither am I saying a strong one is either. It's a tradeoff. But, getting back to my original statement, balancing the budget will not strenthen the dollar. Sure it'll help, but it sure isnt the magic dust.

Getting back to your original point, you never showed why it wouldn't strengthen it. You went off on a tangent on a point you cannot be entirely sure the OP was making. I'm amused. you've done your job.

Well, I didnt side track TOO much. My comments on the weak and strong dollar were in reponse to the tanking dollar. Also in response to his saying "Since a stronger dollar (versus the Euro) would reduce our gas bills." which isnt entirely true. A stronger dollar wouldnt necessarily decrease fuel prices. I was commenting about how much more goes into a weak or strong dollar. Thats all.

 

[Rainsford]

Is OPEC switching to the Euro? So far as I've heard, it's a bunch of loudmouthing from Iran and Chavez.

 

[techs]

Originally posted by: Rainsford
Is OPEC switching to the Euro? So far as I've heard, it's a bunch of loudmouthing from Iran and Chavez.

One of the points I made was that it is very advantageous to OPEC to keep oil pegged to the dollar since the US shows the least interest in cutting consumption.

 

[blackangst1]

Good point, techs

 

[dmcowen674]

Originally posted by: techs

Originally posted by: Rainsford
Is OPEC switching to the Euro? So far as I've heard, it's a bunch of loudmouthing from Iran and Chavez.

One of the points I made was that it is very advantageous to OPEC to keep oil pegged to the dollar since the US shows the least interest in cutting consumption.

I don't believe that consumption is not down.

There are SUV's and Pick ups idled all over the place here as well as a lot of Big Rigs for sale.

 

[TastesLikeChicken]

Originally posted by: techs

Originally posted by: Rainsford
Is OPEC switching to the Euro? So far as I've heard, it's a bunch of loudmouthing from Iran and Chavez.

One of the points I made was that it is very advantageous to OPEC to keep oil pegged to the dollar since the US shows the least interest in cutting consumption.

How is having oil "pegged" to the dollar advantageous based on our consumption?

btw, as I explained in another thread, oil is priced (not pegged) on the market to a dollar value. That doesn't mean dollars must be paid for oil, which apparently a large number of people erroneously believe. It's merely used as a benchmark of value since, historically, the dollar has been the most stable currency in the long term. The dollar is the most stable because the US is still the primary driver of the world economy by a long shot and that won't be changing any time soon, even considering China's recent economic expansion.

I guess there's no sense in explaining it though since so many in here don't appear to have even a basic grasp of global economics and markets.

 

[Rainsford]

Originally posted by: TastesLikeChicken

Originally posted by: techs

Originally posted by: Rainsford
Is OPEC switching to the Euro? So far as I've heard, it's a bunch of loudmouthing from Iran and Chavez.

One of the points I made was that it is very advantageous to OPEC to keep oil pegged to the dollar since the US shows the least interest in cutting consumption.

How is having oil "pegged" to the dollar advantageous based on our consumption?

btw, as I explained in another thread, oil is priced (not pegged) on the market to a dollar value. That doesn't mean dollars must be paid for oil, which apparently a large number of people erroneously believe. It's merely used as a benchmark of value since, historically, the dollar has been the most stable currency in the long term. The dollar is the most stable because the US is still the primary driver of the world economy by a long shot and that won't be changing any time soon, even considering China's recent economic expansion.

I guess there's no sense in explaining it though since so many in here don't appear to have even a basic grasp of global economics and markets.

Well there is no reason at all China would enter into the discussion. They may have a large economy, but they are basically a very successful market follower...they don't drive anything anywhere. They don't innovate and they don't consume to the degree necessary for them to be a controlling force on the global scale. In fact, out of all the other markets on earth, only Europe functions like the US, but even in their case the long term success of the entire European economy is far from certain and far from stable. This may be one of the few cases where the US actually has a much better historic record than the rest of the world.

Like you said, this isn't going to change overnight. Stable means just that, it's not something that changes on a week to week basis, and only an idiot makes long term currency decisions, which the OPEC decision would amount to, based on short term economic trends.

 

[TastesLikeChicken]

Originally posted by: Rainsford

Originally posted by: TastesLikeChicken

Originally posted by: techs

Originally posted by: Rainsford
Is OPEC switching to the Euro? So far as I've heard, it's a bunch of loudmouthing from Iran and Chavez.

One of the points I made was that it is very advantageous to OPEC to keep oil pegged to the dollar since the US shows the least interest in cutting consumption.

How is having oil "pegged" to the dollar advantageous based on our consumption?

btw, as I explained in another thread, oil is priced (not pegged) on the market to a dollar value. That doesn't mean dollars must be paid for oil, which apparently a large number of people erroneously believe. It's merely used as a benchmark of value since, historically, the dollar has been the most stable currency in the long term. The dollar is the most stable because the US is still the primary driver of the world economy by a long shot and that won't be changing any time soon, even considering China's recent economic expansion.

I guess there's no sense in explaining it though since so many in here don't appear to have even a basic grasp of global economics and markets.

Well there is no reason at all China would enter into the discussion. They may have a large economy, but they are basically a very successful market follower...they don't drive anything anywhere. They don't innovate and they don't consume to the degree necessary for them to be a controlling force on the global scale. In fact, out of all the other markets on earth, only Europe functions like the US, but even in their case the long term success of the entire European economy is far from certain and far from stable. This may be one of the few cases where the US actually has a much better historic record than the rest of the world.

Like you said, this isn't going to change overnight. Stable means just that, it's not something that changes on a week to week basis, and only an idiot makes long term currency decisions, which the OPEC decision would amount to, based on short term economic trends.

The only reason I brought up China was that there are some in here that bring up the Chinese economy as some great juggernaut and bogeyman that's going to rule the world soon. It's not going to happen anytime soon. Maybe in the distant future, but not soon.

Anyway, we are in agreement. Stability is not a measurement of dollar valuations over months or even a couple of years. Far more is taken into consideration. Iran has been threatening since at least 2000, if not earlier, to move to another currency. If it was anything more than an idle threat they would have done so by now. And OPEC has given no indication that it's going to move to another currency.

 

[Rainsford]

Originally posted by: TastesLikeChicken

Originally posted by: Rainsford

Originally posted by: TastesLikeChicken

Originally posted by: techs

Originally posted by: Rainsford
Is OPEC switching to the Euro? So far as I've heard, it's a bunch of loudmouthing from Iran and Chavez.

One of the points I made was that it is very advantageous to OPEC to keep oil pegged to the dollar since the US shows the least interest in cutting consumption.

How is having oil "pegged" to the dollar advantageous based on our consumption?

btw, as I explained in another thread, oil is priced (not pegged) on the market to a dollar value. That doesn't mean dollars must be paid for oil, which apparently a large number of people erroneously believe. It's merely used as a benchmark of value since, historically, the dollar has been the most stable currency in the long term. The dollar is the most stable because the US is still the primary driver of the world economy by a long shot and that won't be changing any time soon, even considering China's recent economic expansion.

I guess there's no sense in explaining it though since so many in here don't appear to have even a basic grasp of global economics and markets.

Well there is no reason at all China would enter into the discussion. They may have a large economy, but they are basically a very successful market follower...they don't drive anything anywhere. They don't innovate and they don't consume to the degree necessary for them to be a controlling force on the global scale. In fact, out of all the other markets on earth, only Europe functions like the US, but even in their case the long term success of the entire European economy is far from certain and far from stable. This may be one of the few cases where the US actually has a much better historic record than the rest of the world.

Like you said, this isn't going to change overnight. Stable means just that, it's not something that changes on a week to week basis, and only an idiot makes long term currency decisions, which the OPEC decision would amount to, based on short term economic trends.

The only reason I brought up China was that there are some in here that bring up the Chinese economy as some great juggernaut and bogeyman that's going to rule the world soon. It's not going to happen anytime soon. Maybe in the distant future, but not soon.

Anyway, we are in agreement. Stability is not a measurement of dollar valuations over months or even a couple of years. Far more is taken into consideration. Iran has been threatening since at least 2000, if not earlier, to move to another currency. If it was anything more than an idle threat they would have done so by now. And OPEC has given no indication that it's going to move to another currency.

Something else I think people should keep in mind is that, while countries like Iran might not like the US, they are still capitalists trying to make money. As long as doing business with the US, in US dollars, makes them money, they'd be stupid to try to hurt the US through economic means. Iran, or all of OPEC for that matter, doesn't have the economic clout to switch off the dollar for political reasons without doing far more damage to themselves than they would do to us.

 

[OokiiNeko]

One of the points I made was that it is very advantageous to OPEC to keep oil pegged to the dollar since the US shows the least interest in cutting consumption.

This is a point Dave made in another thread. We, the average American, are not being given much of a chance to reduce consumption in as far as car choices are concerned.

Count the number of cars that got over 40 mpg 20 years ago and count them now. Not very logical situation, that has been smoke and mirrored by "emissions".

Why do I bring up mpg? Cause, if oil does go Euro, I believe there will be a miraculous announcment about the 100 mpg carb, or some alternate enrgy source.

The people that own the US just do not want to be forced to release it cause it will be another lie exposed.

If I am wearing a tinfoil hat on this, and there is no miracle, and oil does go Euro, there will be a lot of Americans trying to move TO Venezuela, cause America will have a real Great Depression.

And Chavez will be laughing his ass off.

 

[techs]

Originally posted by: TastesLikeChicken

Originally posted by: techs

Originally posted by: Rainsford
Is OPEC switching to the Euro? So far as I've heard, it's a bunch of loudmouthing from Iran and Chavez.

One of the points I made was that it is very advantageous to OPEC to keep oil pegged to the dollar since the US shows the least interest in cutting consumption.

How is having oil "pegged" to the dollar advantageous based on our consumption?

btw, as I explained in another thread, oil is priced (not pegged) on the market to a dollar value. That doesn't mean dollars must be paid for oil, which apparently a large number of people erroneously believe. It's merely used as a benchmark of value since, historically, the dollar has been the most stable currency in the long term. The dollar is the most stable because the US is still the primary driver of the world economy by a long shot and that won't be changing any time soon, even considering China's recent economic expansion.

I guess there's no sense in explaining it though since so many in here don't appear to have even a basic grasp of global economics and markets.

How is having oil "pegged" to the dollar advantageous based on our consumption?
Because the price of oil versus the value of the dollar is not a 1 to 1 relationship. In other words Americans consumption is least affected by the price of gas, due to our low gas taxes and Americans purchasing preferences, so if gas goes up Americans keep using it. If the price of gas goes up in many European countries, since the price is so high there, consumption goes down.
Put another way, Americans will keep buying gas with less concern as to price, meaning increases in price are not moderated by reduction in usage (or at least a smaller redcution in usage than in high gas price places like Europe)

 

[StageLeft]

We, the average American, are not being given much of a chance to reduce consumption in as far as car choices are concerned.

Absolutely we have plenty of choices. There is a plethora of cars that get over 30 mpg including pretty large sedans like the accord or hybrid altima. Hybrid is premature for the most part, but even a non hybrid sedan, especially the compacts, get many, many MPG, and that's not even looking at diesel vehicles (of which there are not many, but still some).

I believe there will be a miraculous announcment about the 100 mpg carb

The 100 mpg carb is a debunked myth. There is no way to get better MPG in cars save making them smaller, more aerodynamic, lighter, etc.; nothing ground breaking is available.

The people that own the US just do not want to be forced to release it cause it will be another lie exposed.

Where do you buy your tinfoil hats? If you knew what percentage of gasoline goes to energy vs heat you'd know that a 100 mpg carb in a car that now gets, say 25mpg, is physical impossible.

And Chavez will be laughing his ass off.

Once venezuela runs out of oil revenue, be it in 5 years or 20, the little oil-propped let's-play-government socialist crap they're pulling now will tumble in on them.

 

[AnitaPeterson]

Originally posted by: blackangst1
I hope you arent indirectly implying the dollar will strengthen if our budget is balanced....

And I never understood why people dont understand the benefits of a weak dollar. There is positives and negatives to both a weak and a strong dollar. since we have a weak dollar now, the advantages arent that bad...for instance, it is easier to export and compete in international markets, the US is more favorable for tourism, and capital markets are great for international investors. Since most people think the strong dollar is favorable, it is important to understand the disadvantages...for example, it is more difficult for US companies to compete abroad, imports are more attractive due to lower international prices, and it is harder for foreign investors to invest in US capital due to heavy borrowing.

Im not saying a weak dollar is favorable, but neither am I saying a strong one is either. It's a tradeoff. But, getting back to my original statement, balancing the budget will not strenthen the dollar. Sure it'll help, but it sure isnt the magic dust.

Not trying to ruin your party, but that bolded part in your text ain't gonna happen.

Nobody in their right mind (especially Europeans) will come to the U.S. purely for tourism., when they have the rest of the world at their disposal. They tend to avoid being submitted to crazy long security checks, get photographed and fingerprinted, just to take a look at the Grand Canyon or the Statue of Liberty.

 

[fleshconsumed]

Originally posted by: blackangst1

Originally posted by: boredhokie
A strong dollar doesn't cause the cost of gas prices or junk at wal-mart to rise, like a weak dollar does. A weak dollar affects the average middle class person - not everyone benefits from a weak dollar.

No. A strong dollar makes foreign goods and imports more expensive and US goods to be less competitive, thus higher prices generally. You have it backwards. Thus, a strong dollar DOES affect middle class.


And the weak dollar has little to do with commodities trading.

Say what?

 

[blackangst1]

Originally posted by: AnitaPeterson

Originally posted by: blackangst1
I hope you arent indirectly implying the dollar will strengthen if our budget is balanced....

And I never understood why people dont understand the benefits of a weak dollar. There is positives and negatives to both a weak and a strong dollar. since we have a weak dollar now, the advantages arent that bad...for instance, it is easier to export and compete in international markets, the US is more favorable for tourism, and capital markets are great for international investors. Since most people think the strong dollar is favorable, it is important to understand the disadvantages...for example, it is more difficult for US companies to compete abroad, imports are more attractive due to lower international prices, and it is harder for foreign investors to invest in US capital due to heavy borrowing.

Im not saying a weak dollar is favorable, but neither am I saying a strong one is either. It's a tradeoff. But, getting back to my original statement, balancing the budget will not strenthen the dollar. Sure it'll help, but it sure isnt the magic dust.

Not trying to ruin your party, but that bolded part in your text ain't gonna happen.

Nobody in their right mind (especially Europeans) will come to the U.S. purely for tourism., when they have the rest of the world at their disposal. They tend to avoid being submitted to crazy long security checks, get photographed and fingerprinted, just to take a look at the Grand Canyon or the Statue of Liberty.

Not to ruin your delusions, but youre wrong. If what you say is true, you may want to let the US Department of Commerce know. Maybe they are thinking of another country?

INTERNATIONAL VISITORS TO THE U.S. SPEND RECORD DOLLARS IN 2005
PASSING MARK SET BEFORE 9-11
Visitation to the United States Up 7 Percent Over 2004

The U.S. Department of Commerce today announced that total international travel and tourism exports - which is travel-related tourism spending in the United States - reached the record level of $104.8 billion in 2005, surpassing the $103.1 billion mark set the year before 9-11. This represents a 12 percent increase of $11.5 billion in travel exports over 2004. In addition, 2005 saw a 7 percent increase in international visitation to the United States to 49.4 million visitors.

------------------------------------------------------------------------

I guess those 49 million never really came, right?

 

[blackangst1]

Originally posted by: fleshconsumed

Originally posted by: blackangst1

Originally posted by: boredhokie
A strong dollar doesn't cause the cost of gas prices or junk at wal-mart to rise, like a weak dollar does. A weak dollar affects the average middle class person - not everyone benefits from a weak dollar.

No. A strong dollar makes foreign goods and imports more expensive and US goods to be less competitive, thus higher prices generally. You have it backwards. Thus, a strong dollar DOES affect middle class.


And the weak dollar has little to do with commodities trading.

Say what?

Take a few minutes and learn how the dollar works internationally. From the Fed itself.

 

[fleshconsumed]

Originally posted by: blackangst1

Originally posted by: fleshconsumed

Originally posted by: blackangst1

Originally posted by: boredhokie
A strong dollar doesn't cause the cost of gas prices or junk at wal-mart to rise, like a weak dollar does. A weak dollar affects the average middle class person - not everyone benefits from a weak dollar.

No. A strong dollar makes foreign goods and imports more expensive and US goods to be less competitive, thus higher prices generally. You have it backwards. Thus, a strong dollar DOES affect middle class.


And the weak dollar has little to do with commodities trading.

Say what?

Take a few minutes and learn how the dollar works internationally. From the Fed itself.

From your own link: "Consumer sees lower prices on foreign products/services", now compare that with the part you said that I bolded.

 

[blackangst1]

Originally posted by: fleshconsumed

Originally posted by: blackangst1

Originally posted by: fleshconsumed

Originally posted by: blackangst1

Originally posted by: boredhokie
A strong dollar doesn't cause the cost of gas prices or junk at wal-mart to rise, like a weak dollar does. A weak dollar affects the average middle class person - not everyone benefits from a weak dollar.

No. A strong dollar makes foreign goods and imports more expensive and US goods to be less competitive, thus higher prices generally. You have it backwards. Thus, a strong dollar DOES affect middle class.


And the weak dollar has little to do with commodities trading.

Say what?

Take a few minutes and learn how the dollar works internationally. From the Fed itself.

From your own link: "Consumer sees lower prices on foreign products/services", now compare that with the part you said that I bolded.

My bad I misread my own fucking post and posted incorrectly hehe

I went back to last page and I had it right until a few posts ago. Thanks for pointing it out