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Post by Cranky on Nov 1, 2007 18:40:13 GMT -5
I am a firm believer that nothing happens in a vacuum.
I was wondering why we oil prices are going through the roof. Simple demand is not enough to justify the latest increases.
Soooo....
Oil prices are rising BECAUSE the American Feds need the rest of the world to absorb more dollars to shore up their economy. Think about it this way. The housing bubble has burst and in order to keep consumer confidence from going into free fall, the Feds lowered the interest rates. In order to make sure that there is limited inflation from a larger money supply, the Feds need someway of getting their extra cash absorbed. Since oil is traded in US dollars, then increasing oil prices will consume more dollars for "circulation".
Create a crisis with Iran and oil goes through the roof. Iran wins but more importantly, trillions of dollars are needed by the worlds economies to pay for this oil. For every dollar Iran gets more for it's oil, the irony is that the US is the bigger beneficiary by a magnitude becasue the ENTIRE world needs more their dollars to pay for the oil.
The downside? The US economy needs larger and larger reductions in interest rates to support the economy. Lower interest rates generate even MORE debt. It is a endless dance, slowing economy needs boost-->lower interest rates--->more consumer debt--->more dollars in circulation--->higher oil prices need to absorb dollars-->more war rhetoric needed to create oil inflation.
But....what happens if the price of oil starts to come down?
There are so many dollars in circulation on the planet that if the US dollar falls too far, it can create a confidence crisis to the point that the world starts dumping dollars. Effectively collapsing the US economy.
Does the US need to go to war to create oil price hikes and keep ever increasing amount of dollars in circulation? Is war prefferable to US politicians to a heavy recession? Certainly war would be preferable over a depression.
Rebuttles?
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Post by Skilly on Nov 1, 2007 19:48:29 GMT -5
The problem with the US dollar is that even though it is trading low on the markets, the American act as if their dollar is still strong. Oil in Canada (NL) = 109.4/L Canadian = 1.15 US Oil in United States = 0.75/L US Look at books ... the price is still 20 dollars American and about 26 Canadian in the bookstores. I have devised a plan that I am going to try this weekend at Chapters. I am going to go into Chapter and buy a book ... when she says $25.99 (or whatever) I am going to toss an American $20 dollar bill on the counter and say "It says $17.99 US on the back cover" .... I have some American money kicking around somewhere. The arguement that they were produced when the dollar was low is hogwash too ... the dollar has been steadily climbing now for over a year. These manufacturer's and the like have had time to change their prices and didn't because they were making more profits and now they claim that if they change the prices now they will go bankrupt ... sure...  They say our strong dollar is keeping gas prices down here in Canada; could be ... but I think that they'd raise the price anyway. I don't think it has much to do with saving the American economy though and more to do with money grubbing oil companies. |
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Post by The Habsome One on Nov 1, 2007 20:14:19 GMT -5
The problem with the US dollar is that even though it is trading low on the markets, the American act as if their dollar is still strong. Oil in Canada (NL) = 109.4/L Canadian = 1.15 US Oil in United States = 0.75/L US Look at books ... the price is still 20 dollars American and about 26 Canadian in the bookstores. I have devised a plan that I am going to try this weekend at Chapters. I am going to go into Chapter and buy a book ... when she says $25.99 (or whatever) I am going to toss an American $20 dollar bill on the counter and say "It says $17.99 US on the back cover" .... I have some American money kicking around somewhere. The arguement that they were produced when the dollar was low is hogwash too ... the dollar has been steadily climbing now for over a year. These manufacturer's and the like have had time to change their prices and didn't because they were making more profits and now they claim that if they change the prices now they will go bankrupt ... sure... They say our strong dollar is keeping gas prices down here in Canada; could be ... but I think that they'd raise the price anyway. I don't think it has much to do with saving the American economy though and more to do with money grubbing oil companies. Forget Chapters. Forget Amazon.ca. Buy straight from Amazon.com. Even with shipping (you don't get free shipping for international orders), it's still way cheaper than the other websites. By the way, Chapters.ca is way cheaper than buying a book in a Chapsters store (at least in Ontario). |
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Post by Skilly on Nov 1, 2007 20:32:06 GMT -5
The problem with the US dollar is that even though it is trading low on the markets, the American act as if their dollar is still strong. Oil in Canada (NL) = 109.4/L Canadian = 1.15 US Oil in United States = 0.75/L US Look at books ... the price is still 20 dollars American and about 26 Canadian in the bookstores. I have devised a plan that I am going to try this weekend at Chapters. I am going to go into Chapter and buy a book ... when she says $25.99 (or whatever) I am going to toss an American $20 dollar bill on the counter and say "It says $17.99 US on the back cover" .... I have some American money kicking around somewhere. The arguement that they were produced when the dollar was low is hogwash too ... the dollar has been steadily climbing now for over a year. These manufacturer's and the like have had time to change their prices and didn't because they were making more profits and now they claim that if they change the prices now they will go bankrupt ... sure... They say our strong dollar is keeping gas prices down here in Canada; could be ... but I think that they'd raise the price anyway. I don't think it has much to do with saving the American economy though and more to do with money grubbing oil companies. Forget Chapters. Forget Amazon.ca. Buy straight from Amazon.com. Even with shipping (you don't get free shipping for international orders), it's still way cheaper than the other websites. By the way, Chapters.ca is way cheaper than buying a book in a Chapsters store (at least in Ontario). I know ... but I want to see the look on her face .... I'll actually be buying the book for less than the listed price. ;D For instance, the cover says $15.00 US , $23.00 Canadian. I pass her the $20US, she give me back $5US (or 4 something Canadian) ... but then when they convert the 15 .. it is just over 14 ... |
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Post by The Habsome One on Nov 1, 2007 20:48:28 GMT -5
Forget Chapters. Forget Amazon.ca. Buy straight from Amazon.com. Even with shipping (you don't get free shipping for international orders), it's still way cheaper than the other websites. By the way, Chapters.ca is way cheaper than buying a book in a Chapsters store (at least in Ontario). I know ... but I want to see the look on her face .... I'll actually be buying the book for less than the listed price. ;D For instance, the cover says $15.00 US , $23.00 Canadian. I pass her the $20US, she give me back $5US (or 4 something Canadian) ... but then when they convert the 15 .. it is just over 14 ... LOL. That girl is going to love you.  My ex-girlfriend worked at Chapters and complained about the job all the time. |
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Post by franko on Nov 1, 2007 21:38:42 GMT -5
The problem with the US dollar is that even though it is trading low on the markets, the American act as if their dollar is still strong. Oil in Canada (NL) = 109.4/L Canadian = 1.15 US Oil in United States = 0.75/L US Taxes. Lotsa people have done that here -- all it does is make the poor salespeople feel bad -- they can't do anything about it. Prices have actually been pre-set; books have been priced and retailers have to charge that to make a profit. There are some additional costs [not as much as the markup, true]. |
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Post by Cranky on Nov 1, 2007 21:51:10 GMT -5
I wanted to talk about the US economy and I'm responding to....books. Guys, I will let you on to a dirty little secret. The Canadian dollar may have skyrocketed but Canadian manufacturing costs only change by the smallest opf increments. The ONLY savings I have for the product I make is from slight savings in raw material. 25% of my product cost is material so a 10% decrease in that is only worth 2.5% difference in the selling price of my product. The labour cost are NOT going down. The municipal taxes are NOT going down. The electrical bills are going WAY UP. The gas bills will go WAY UP. Workmans Comp and Unemployment insurance is unchanged. Shipping is going WAY UP. I could list every single one of my manufacturing cost and trust me, if I was to sell my product for 15% less today, I would be a full time poster....24/7. The ONLY reduction you are going to see are from importers, NOT Canadian manufacturers. In fact, the only savings you are going to get from Canadian manufacturers is when you go to their bankruptcy auctions. Look out for next February. If the dollar stays this strong, there will be a lot of labour "enjoying" the benefits of our dollar......via Unemployment Insurance. |
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Post by PTH on Nov 1, 2007 22:39:59 GMT -5
But Iran isn't even selling it in US dollars anymore...... they're selling to China or Europe without US dollars being used.....
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Post by Cranky on Nov 1, 2007 23:31:09 GMT -5
But Iran isn't even selling it in US dollars anymore...... they're selling to China or Europe without US dollars being used..... Iran is still selling part of it's oil in dollars and 75% of the worlds oil is still sold in dollars. Saudi Arabia alone exports 300 billion dollars. Canada exports in US dollars and THAT is a concern too. We should not hold US currency reserves. |
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Post by seventeen on Nov 1, 2007 23:39:10 GMT -5
HA, the stuff may be priced in US dollars, but that doesn't mean you have to pay in US $. If you're buying from Russia, for example, you'd pay them in rubles. It would be the equivalent in rubles of $90 US, but why would they want US $ that are falling like meteors, then have to convert back to rubles again? Same thing for Iranian zhlotnicks or Ayatollohs or whatevery they call their coin. They'd rather be paid in Ayatollahs or even Euros than Bushbucks.
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Post by Cranky on Nov 1, 2007 23:59:11 GMT -5
HA, the stuff may be priced in US dollars, but that doesn't mean you have to pay in US $. If you're buying from Russia, for example, you'd pay them in rubles. It would be the equivalent in rubles of $90 US, but why would they want US $ that are falling like meteors, then have to convert back to rubles again? Same thing for Iranian zhlotnicks or Ayatollohs or whatevery they call their coin. They'd rather be paid in Ayatollahs or even Euros than Bushbucks. Well, actually no, they don't trade in rubles or zloty's or shekels. Here is one article about the subject....Russia is the second largest oil exporter. Òåêñò: Anna Baraulina Ôîòî èç àðõèâà Ãàçåòû.Ru
Within just one week, two top Russian officials made two absolutely opposing statements. One of them did not rule out pricing oil sales in euros, the other said the issue of switching oil deal settlements into any currency other than dollars is exclusively for the oil market to decide.
Speaking at the Russian-German summit in Yekaterinburg last week, Vladimir Putin agreed to the German Chancellor Gerhard Schroeder’s proposal to price the sale of oil in euros. Putin said it was "possible" for Russia to price its oil in euros. The agreement was immediately backed by Deputy Prime Minister Viktor Khristenko, during a session devoted to the energy cooperation between Russia and the European Union.
These statements seriously alarmed not only the oil companies, but also financial circles: denominating oil exports in euros constitutes a threat to the stability of the US currency. Incidentally, OPEC has many times said it would continue pricing oil sales in dollars only.
But as early as Friday, Prime Minister Mikhail Kasyanov said his government would not take any decisions on transferring oil settlements into euros. "This topic cannot even be discussed. There can be no administrative decisions here. The market decides," Kasyanov said. "Oil is a commodity that is traded for dollars, and if it's sold for dollars, it means that suits the buyers and the sellers,” the premier said adding that it was up to exporters to decide if they should to stick to the dollar or price oil in euros.
In other words, the government considers that this issue is for the suppliers and their clients to decide. One of them, TNK-BP, a joint venture created when BP bought 50% of the OAO Tyumen Oil Company, told Gazeta.Ru that the oil company has not even considered the issue of denominating oil exports in euros yet.
“In future everything will depend on the behaviour of the euro. If this currency, indeed, becomes stable, we may switch to it. However, for the time being we see no clear tendency of the euro strengthening”.
Lukoil’s vice-president Leonid Fedun told news agencies that should Russia switch to pricing oil sales in euros, his company would incur insignificant losses. “If the government decides to do so, we will back the initiative,” he said adding that Lukoil is ready to switch to the euro provided that visa barriers between Russia and the EU are eliminated.
Independent analysts, on the contrary, assume that switching to the euro would deal a serious blow to Russian oil companies. “Russian exporters sell oil for dollars and are not interested in switching to another currency, for that would lead to considerable losses,” Valery Nesterov, an oil analyst with Troika Dialog told Gazeta.Ru.
As to Putin’s statement, Nesterov considers it to be of a purely political nature. “Germany, as well as all of Europe, is interested in a stronger euro, while Russia, on its part, is interested in good relations with Europe. However, oil sales have been conducted in dollars for some 150 years now. The dollar, indeed, has weakened a bit lately, but talking of its demise would be as premature as saying that the euro would become the world’s leading currency”.
20 ÎÊÒßÁÐß 15:19 |
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Post by CentreHice on Nov 2, 2007 8:59:28 GMT -5
Does the US need to go to war to create oil price hikes and keep ever increasing amount of dollars in circulation? Is war prefferable to US politicians to a heavy recession? Certainly war would be preferable over a depression. The question is not "does the U.S. need to.....", it's "has the U.S. in the past....and are they currently...." To misuse the young men and women in one's armed forces is as despicable as it gets. How many times has the reason for invading Iraq been morphed? It's like a little kid in the schoolyard, lying through his teeth as to why he beat up another kid. The story changes with the wind. |
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Post by Disgruntled70sHab on Nov 2, 2007 9:53:06 GMT -5
But Iran isn't even selling it in US dollars anymore...... they're selling to China or Europe without US dollars being used..... Iran is still selling part of it's oil in dollars and 75% of the worlds oil is still sold in dollars. Saudi Arabia alone exports 300 billion dollars. Canada exports in US dollars and THAT is a concern too. We should not hold US currency reserves. Actually, Wal-Mart imports USD $18 billion a year from China with that figure probably going up by 20% next year as well. And that is only China's business with Wal-Mart. How many other companies are they providing goods for? When you think of it, China, more than Iran, could bury the US ecomomy just by finding another buyer. WRT oil revenues being reckoned in USD: The Iranians held true to their word that they'd be conducting oil sales in Euros. However, it hasn't had the impact they thought it would. There are still too many countries keeping the USD reasonably stable. HA, I have friends who own their own small businesses as well. One has several US clients and this strong loonie is killing him. However, using my friend as an example, I think a weaker US dollar will bring their economy back to a respectable level as it will help promote small business as well as generate busines in general. But, that may be easier said than done. Bush continues to lobby for war funds in addition to funds for international affairs that wouldn't otherwise be an issue if he was spending on Iraq and Afghanistan. His national debt is growing every day and you have to wonder what will happen if one day that catches up to him. And, given how much American money is currently in the international community, you have to wonder how a US market crash will affect a lot of other countries as well. I know it will affect us. Cheers. |
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Post by franko on Nov 2, 2007 10:57:09 GMT -5
When you think of it, China, more than Iran, could bury the US ecomomy just by finding another buyer. Could they, though? What other country is willing to spend lavishly and massively on nothing? What other country is so "consumerisitic"? And what other country (I'll include Canada here) will buy cheap quality-less baubles just to have more stuff. How many recalls of Chinese products have there been recently . . . with no slow-down or second thoughts in continuing consumption. |
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Post by Disgruntled70sHab on Nov 2, 2007 13:51:51 GMT -5
When you think of it, China, more than Iran, could bury the US ecomomy just by finding another buyer. Could they, though? What other country is willing to spend lavishly and massively on nothing? What other country is so "consumerisitic"? And what other country (I'll include Canada here) will buy cheap quality-less baubles just to have more stuff. How many recalls of Chinese products have there been recently . . . with no slow-down or second thoughts in continuing consumption. Good point, Franko. They'd need another consumer or group of consumers similar to the USA. The only two that immediately come to mind are Russian and the EU. But, whether or not they would have they could consume as hungerily as the USA is another story. However, I heard from a college professor that China agrees to buy "X" number of USD in exchange for that market. We could suggest that the two are interdependent of each other and we'd be right. However, if China did find that alternate buyer the USA would be one hurtin' puppy. If I find that online I'll post it up. Cheers. |
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Post by seventeen on Nov 2, 2007 23:34:05 GMT -5
HA, the stuff may be priced in US dollars, but that doesn't mean you have to pay in US $. If you're buying from Russia, for example, you'd pay them in rubles. It would be the equivalent in rubles of $90 US, but why would they want US $ that are falling like meteors, then have to convert back to rubles again? Same thing for Iranian zhlotnicks or Ayatollohs or whatevery they call their coin. They'd rather be paid in Ayatollahs or even Euros than Bushbucks. Well, actually no, they don't trade in rubles or zloty's or shekels. Here is one article about the subject....Russia is the second largest oil exporter. Within just one week, two top Russian officials made two absolutely opposing statements. One of them did not rule out pricing oil sales in euros, the other said the issue of switching oil deal settlements into any currency other than dollars is exclusively for the oil market to decide. [/i] [/quote] I'm still not convinced. They keep talking about oil settlements, not actual payments. So they now price oil at 60 Euros a barrel, big deal. If I'm buying from Russia, they have to end up with a currency they can use...rubles. No one in Russia accepts Euros, except banks perhaps, who end up converting them into rubles. So if i was selling something like oil and I'm Canadian, I'd want to be paid in Cdn $. Sure, the base price can be in whatever, but I can't spend whatever's at Sobey's. They accept Cdn $. That's what I mean. Anythign can be priced in any currency, but when it ends up at the source country, it has to be in that country's currency or no one really honours it. (There are some exceptions of course....you can use US $ in Canada almost everywhere, but you won't get full exchange rate for it.) Your neighbourhood store won't accept Euros though. |
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My ex-girlfriend worked at Chapters and complained about the job all the time.
