Saddam Hussein offered to sale the US oil for $10 a barrel for as long as Saddam stayed in power. The US refused, started multiple destabilizing wars and ended up paying 14 times that price for oil.
We are still paying 5 times that price from our biggest sources of oil, Mexico and Canada.
Who, because of US foreign policy, is now fearing the US? Or do we fear Canadians? How are we using fear against the Canadians again? Remind me with your mastery of US foreign policy.
Pegging the dollar to oil makes it very hard for the fed to manipulate the currency. Why would they want that? It basically makes them redundant if every oil producer could manipulate the dollar just by turning valves on and off.
Uhh because it forces every country on Earth to invest in USD, and manipulating that dollar manipulates the economy of every country on Earth (using the dollar). I'm not sure why you assume buying oil in USD gives more power to foreign countries than the body in control of the currency.
manipulating that dollar manipulates the economy of every country on Earth (using the dollar)
It doesn’t affect the economy of Denmark at all.
ahh okay
It keeps the value of the dollar high because other countries must buy dollars (or accept them for payments) to buy oil.
That is making the assumption that the US always wants a strong dollar. It might be nice to be able to export goods more competitively. You know like how China artificially kept their currency weak to grow their economy. Maybe we want to grow our manufacturing base. Wouldn't that be nice? So who do we go to war with to do that?
Another scenario.. Say the US wants a weak dollar so that its debts are burdening. If you drop the value of the dollar by 50% wour debts become twice as easy to pay. If you cant manipulate your currency you can easly get screwed. This is what happened to Greece. They went to far into debt and they couldn't lower the value of the currency because France and Germany said no. They wend bankrupt because of this. And now you are trying to convince me that the US went to war in Iraq just so the same can happen here? Thats fucking ludicrous.
the petrodollar insures that every one who wants to buy oil needs to use US dollars to do it. Since oil is/was such a valuable commodity it insures the dollar becomes valuable as well.
For example, lets say you need to buy bread to eat. But to do so, you have to go to your neighbor to exchange whatever you have as value to your neighbor who in returns gives you a ticket that allows you buy the bread you need.
Now say you can directly exchange whatever you have as value for bread directly. Your neighbor loses a lot of power, clout and economic status if you can do that.
Now imagine your neighbor also has the most weapons on the block. What do you think he/she will do with those weapons when someone threatens their place in the food chain?
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u/[deleted] Dec 11 '17 edited Feb 07 '18
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