oil producers getting rid of dollars - Political Forum

Deja Entendu · 01-22-2007, 12:13 PM

Oil producers shun dollar

By Haig Simonian in Zurich and Javier Blas and Carola Hoyos in London

Published: December 10 2006 20:11 | Last updated: December 10 2006 20:11

Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements.

The revelation in the latest BIS quarterly review, published on Monday, confirms market speculation about a move out of dollars and could put new pressure on the ailing US currency.

FT.com / World / US & Canada - Oil producers shun dollar

worth a read.

Sebelius for VP, not Hillary · 01-24-2007, 06:38 AM

I guess that something which might offset this disturbing trend is that the US economy still grows significantly faster than Europes, so that decreases the attractiveness of the Euro.

Several people on this forum would mention the US' coming social security/medicare crises, however isn't Europe also due for such a crises? I have an article on it elsewhere. Continental Europe is in an even worse position over those issues than we are. In the meantime, China's currency is undervalued, so I guess we can be a little happly that international financial investors don't have a lot of attractive currencies to invest in.

Sebelius for VP, not Hillary · 01-24-2007, 06:46 AM

Here ya go: Budget Crunch: Population Aging in Rich Countries

Here's one interesting excerpt:

Quote:

France, Germany, and Japan are expected to encounter severe financing problems within the next few decades. In all three countries, estimated unfunded liabilities of the public systems exceed current GDP (line 4). The unfunded liability of the U.S. system is one quarter of GDP. Britain's net liability is near zero.

george.d · 01-24-2007, 10:42 AM

Quote:

Originally Posted by W.E.B. Du Bois

Here ya go: Budget Crunch: Population Aging in Rich Countries

Here's one interesting excerpt:

That article is ten-years old, five years before the Euro was adopted as a currency. Euro erosion of USD as a reserve currency in reserve currency baskets and as the sole commodity exchange for oil with subsequent loss of USD value and accumulated US debt skews all the numbers.

Unfunded US government liabilities are now $45T on a net present value basis, including public pensions. The danger of oil no longer being traded solely in USD remains the same, eventual hindrance of US ability to issue debt on a scale covering US deficit spending, payment imbalance and rollover debt replacement.