The demise of the dollar

[Apoptosis]

Anyone heard about this?

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

http://www.independent.co.uk/news/busin ... 98175.html

[Skippman]

I've read similar without seeing any cites or listed sources. However given our current geo-political climate it's not terribly suprising. The dollars been heavily devaluated by our current administration and the one just previous. Both by action and inaction.

The dollars only real value currently is as petro-dollars, meaning we're tied to the sale price of oil. This was done not based on the power of the US dollar but based on agregate consumption. The US uses more oil than any other nation in the world thus we import more than any other nation. It was simply easier for the world economy to adopt the US dollar as the trade currency for oil due to it's prevelenace.

Now that China is THE industrial super power of the world it only makes sense that OPEC and other nations who's economy is based on the sale of oil (Venezuala anyone) would seek to transistion to the new majority currency, namely the Chinese yuan.

This is our own fault. The US Dollar is not based on any solid asset. It's not based on gold, silver, or any other precious metal or resource. America produces very little in terms of material goods. Our chief exports are technology and culture. Unless America undertakes a drastic retooling and starts producing material goods again we're boned. If we pass national healthcare that will destroy us as a superpower as it will bankrupt us overnight.

[Apoptosis]

agreed... Sad to see the country fall so fast and in my lifetime.

[bubba]

this ought to wind up the conspiracy nuts over the Amero and/or the move to a single world bank.

[Sowser]

Totally agree with the retooling idea. We also need to deal with a lack of skilled labor in the US. There were too many people who pushed/traded paper in what was essentially a fake economy and when that ship sank they were left without a job and with no real practical skill. We also need to develop our own energy sources and stop politicizing it. Does anyone believe that Mexico is finding massive amounts of oil of their coasts and yet we just slightly to the North don't have those same capacities in our waters? We also need to beef up our nuclear power options and build some new refineries. As for bio-fuel we need to stop trying to use corn (thank you very much farmers’ lobby) which has a ridiculously low return per acre and move to something like algae farms. If we can wean ourselves away from foreign energy sources it will solve a great many of our problems. Oh, and now is a good time to invest in foreign indexes because not only will you get the benefit of growth in emerging economies but you’ll also reap the benefit of a strengthening of other currencies against the dollar.

[Skippman]

The demise of skilled labor is a biproduct of the increase in MBA programs and BA degrees issued starting in the mid 80's durring the Regan era. You had all these people who wanted to be "managers" without anyone giving thought to who we were going to manage.

The Blue Coller worker is a joke to many people now. Labor Unions, which once made this nation strong, backed the Democtratic Party blindly and without regard to have international trade agreements would effect our economy. In some regards the UK has it right with VAT. VAT allows thier local companies to compete somewhat more fairly with foreighn manufacturers. Our open trade policy has done nothing to help our country. Rather than domestically producing quality products we've instead imported cheap, disposable crap.

Look at a refridgerator from 50 years ago. Chances are it's still running today. Sure it may have needed a recharge or minor repair but the think is built solid and to last. Compare that with things produced today. With 50 years of technological advancement I still can't find a microwave that lasts longer than a year before breaking.

I remember about 10 years ago Wal-Mart used to advertise that most of it's products were made in the USA and proudly displayed the American flag on items which were. Now I challange you to find more than 5 things in their entire store that are made in the US. As Wal-Mart is the new Sears and has completely dominated American retail it's small wonder nothings made here anymore. No ones willing to pay for it.

[Apoptosis]

As for bio-fuel we need to stop trying to use corn (thank you very much farmers’ lobby) which has a ridiculously low return per acre and move to something like algae farms.

You have no idea what I lost investing in algae farms on the stock market years ago... Great idea and it works, but sadly i fear it will never take off due to politics alone.

[bmaverick]

Well on da bright side of tings, da USD will be less to circulate with da terrorists in da oil rich countries.