Because I want a Bugatti
How does everyone feel about the spending bill?
- Thread starter LMP
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Because I want a Bugatti
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No, it isnt.
Clearly you havent.
The US can both run a trade deficit and increase the money supply, since the USD is a fiat currency.
The fact that the US has run with a near zero interest rate for over a decade while still running trade deficits is proof that there is no such thing.
Of course its quick, since you dont need to actually explain anything.
You either didnt read or understood any of that.
You didnt even started, and im certainly dont have any substantive base in CT nutters conspiracies.
Not an argument.
And commodity backed means a currency is pegged to a commodity.
Of course i wont, since you obviously have a hard case of Dunning-Kruger effect.
The part where you literally contradicted yourself in one post was more than proof enough that
a) you dont have expertise in the subject
b) you are already set on your train of thought.
But the simplest proof that the dollar isnt oil backed is the fact that when oil prices plummet the dollar appreciates.
https://oilprice.com/Energy/Energy-General/How-The-US-Dollar-Influences-Oil-Prices.html
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Well, my entire field is breathing a huge, collective sigh of relief that humanities funding didn't get the axe.
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Wow
The articles I linked dealt specifically with the petrodollar recycling I was educating you on earlier. But since petrodollars don't exist according to you, I can see how that might've flown over your head
But rather than address all your nonsense, let's cut the the heart of our debate here. You insist the USD is a pure fiat currency, backed only by the faith of the US. You insist the petrodollar system doesn't exist
Here, perhaps this will help you out:
After the collapse of the Bretton Woods gold standard in the early 1970s, the U.S. struck a deal with Saudi Arabia to standardize oil prices in dollar terms. Through this deal, the petrodollar system was born, along with a paradigm shift away from pegged exchanged rates and gold-backed currencies to non-backed, floating rate regimes.
The petrodollar system elevated the U.S. dollar to the world's reserve currency and through this status, the U.S. is able to enjoy persistent trade deficits, and become a global economic hegemony. The petrodollar system also provides the United States’ financial markets with a source of liquidity and foreign capital inflows through petrodollar "recycling." However, before the effects of the petrodollars on the U.S. dollar can be examined, a brief history lesson is in order. (For more, see: Global Trade And The Currency Market and US-Saudi Relations: A Complex Scenario.)
History of the Petrodollar
Faced with mounting inflation, debt from the Vietnam War, profligate domestic spending habits and a persistent balance of payments deficit , the Nixon administration decided to suddenly (and shockingly) end the convertibility of U.S. dollar into gold. In the wake of this “Nixon Shock,” the world saw the end of the gold era and a free fall of the U.S. dollar amidst soaring inflation. According to, Dr. Bessma Moomani in the article, " GCC Oil Exporters and the Future of the Dollar," through a series of carefully crafted bilateral agreements with Saudi Arabia beginning in 1974, the U.S. was able to promote bilateral political and commercial relations, market imported U.S. goods and services, and help recycle Saudi petrodollars (more on this later).
Through this framework of economic cooperation, and more importantly, petrodollar recycling, the U.S. managed to influence Saudi Arabia to persuade the other members of Organization of the Petroleum Exporting Countries (OPEC) to standardize the sale of oil in dollars. In return for invoicing oil in dollar denominations, Saudi Arabia and other Arab states were able to secure U.S. influence in the Israeli-Palestinian conflict, along with U.S. military assistance amidst an increasingly worrisome political climate that saw the Soviet Invasion of Afghanistan, the fall of the Iranian Shah and the Iran-Iraq War. Out of this mutually beneficial agreement, the petrodollar system was born.
Benefits of the Petrodollar System
Since the most sought after commodity in the world--oil--is priced in U.S. dollars, the petrodollar helped elevated the greenback as the world's dominant currency. In fact, according to the Bank for International Settlements (BIS) triennial survey, 87 percent of all foreign exchanges deals initiated in April 2013, involved the USD on one side. With this status, the U.S. dollar was able to enjoy, what some have asserted to be an "exorbitant privilege" of perpetually financing its current account deficit by issuing dollar denominated assets at very low rates of interest, as well as, becoming a global economic hegemony.
For instance, countries like China, who hold vast quantities of U.S. debt have voiced their concerns in the past about the possible dilutive effects to their asset holdings should the dollar depreciate. However, the privileges associated with being able to run persistent current account deficits come at a price. As the reserve currency, the U.S. is obligated to run these deficits to fulfill reserve requirements in an ever in an ever-expanding global economy. If the United States were to stop running these deficits, the resulting shortage of liquidity can pull the world into an economic contraction. However, if the persistent deficits continued ad infinitum, eventually foreign countries will begin to doubt the valuation of the dollar and the greenback may lose its role as the reserve currency; this is known as the Triffin Dilemma. (For more, see: How The Triffin Dilemma Affects Currencies.)
Petrodollar Recycling
The petrodollar system also creates surpluses of U.S. dollar reserves for the oil producing countries, which need to be "recycled." These surplus dollars are spent on domestic consumption, lent abroad to meet the balance of payments of developing nations, or invested in U.S. dollar denominated assets. This last point, is the most beneficial for the U.S. dollar; as the petrodollars make their way back to the U.S., these recycled dollars are used to purchase U.S. securities (such as Treasury bills), which creates liquidity in the financial markets, keeps interest rates low and promotes non-inflationary growth. Moreover, the OPEC states are able to avoid currency risks of conversion and invest in secure American investments.
Read more: How Petrodollars Affect The U.S. Dollar | Investopedia https://www.investopedia.com/articl...trodollars-affect-us-dollar.asp#ixzz5AcwaWTGc
Follow us: Investopedia on Facebook
The petrodollar system elevated the U.S. dollar to the world's reserve currency and through this status, the U.S. is able to enjoy persistent trade deficits, and become a global economic hegemony. The petrodollar system also provides the United States’ financial markets with a source of liquidity and foreign capital inflows through petrodollar "recycling." However, before the effects of the petrodollars on the U.S. dollar can be examined, a brief history lesson is in order. (For more, see: Global Trade And The Currency Market and US-Saudi Relations: A Complex Scenario.)
History of the Petrodollar
Faced with mounting inflation, debt from the Vietnam War, profligate domestic spending habits and a persistent balance of payments deficit , the Nixon administration decided to suddenly (and shockingly) end the convertibility of U.S. dollar into gold. In the wake of this “Nixon Shock,” the world saw the end of the gold era and a free fall of the U.S. dollar amidst soaring inflation. According to, Dr. Bessma Moomani in the article, " GCC Oil Exporters and the Future of the Dollar," through a series of carefully crafted bilateral agreements with Saudi Arabia beginning in 1974, the U.S. was able to promote bilateral political and commercial relations, market imported U.S. goods and services, and help recycle Saudi petrodollars (more on this later).
Through this framework of economic cooperation, and more importantly, petrodollar recycling, the U.S. managed to influence Saudi Arabia to persuade the other members of Organization of the Petroleum Exporting Countries (OPEC) to standardize the sale of oil in dollars. In return for invoicing oil in dollar denominations, Saudi Arabia and other Arab states were able to secure U.S. influence in the Israeli-Palestinian conflict, along with U.S. military assistance amidst an increasingly worrisome political climate that saw the Soviet Invasion of Afghanistan, the fall of the Iranian Shah and the Iran-Iraq War. Out of this mutually beneficial agreement, the petrodollar system was born.
Benefits of the Petrodollar System
Since the most sought after commodity in the world--oil--is priced in U.S. dollars, the petrodollar helped elevated the greenback as the world's dominant currency. In fact, according to the Bank for International Settlements (BIS) triennial survey, 87 percent of all foreign exchanges deals initiated in April 2013, involved the USD on one side. With this status, the U.S. dollar was able to enjoy, what some have asserted to be an "exorbitant privilege" of perpetually financing its current account deficit by issuing dollar denominated assets at very low rates of interest, as well as, becoming a global economic hegemony.
For instance, countries like China, who hold vast quantities of U.S. debt have voiced their concerns in the past about the possible dilutive effects to their asset holdings should the dollar depreciate. However, the privileges associated with being able to run persistent current account deficits come at a price. As the reserve currency, the U.S. is obligated to run these deficits to fulfill reserve requirements in an ever in an ever-expanding global economy. If the United States were to stop running these deficits, the resulting shortage of liquidity can pull the world into an economic contraction. However, if the persistent deficits continued ad infinitum, eventually foreign countries will begin to doubt the valuation of the dollar and the greenback may lose its role as the reserve currency; this is known as the Triffin Dilemma. (For more, see: How The Triffin Dilemma Affects Currencies.)
Petrodollar Recycling
The petrodollar system also creates surpluses of U.S. dollar reserves for the oil producing countries, which need to be "recycled." These surplus dollars are spent on domestic consumption, lent abroad to meet the balance of payments of developing nations, or invested in U.S. dollar denominated assets. This last point, is the most beneficial for the U.S. dollar; as the petrodollars make their way back to the U.S., these recycled dollars are used to purchase U.S. securities (such as Treasury bills), which creates liquidity in the financial markets, keeps interest rates low and promotes non-inflationary growth. Moreover, the OPEC states are able to avoid currency risks of conversion and invest in secure American investments.
Read more: How Petrodollars Affect The U.S. Dollar | Investopedia https://www.investopedia.com/articl...trodollars-affect-us-dollar.asp#ixzz5AcwaWTGc
Follow us: Investopedia on Facebook
I hope that helps, but we both know you aren't actually going to read it because it validates everything I've uttered itt while repudiating your entire understanding of economics
And I hold a economics degree from a top 50 ranked undergrad institution
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Ok I can't resist lol:
Triffin Dilemma: the nation printing a surplus of its own currency in order to supply the world reserve currency is forced into perpetual trade deficits
Is this making any sense to you Rod?
Rod does it strike you as odd that these exact Trifflin stresses on the the US economy that drove us to default in the 70s do not exist today?
Why might flows of USDs back into the US economy and balance of payments not be a problem today? Could it be the petrodollar recycling I tried explaining to you earlier, where USDs are funneled back to the US from the OPEC exporters who use their surplus profits to purchase US securities therefore inflating our capital account and evening out our overall balance of payments? No way, can't be, because the petrodollar doesn't exist, right Rod?
One last thing: you seem to be under the impression that moving your currency to fiat gives you a blank check to print without restraint. You might want to rethink this notion
The Triffin dilemma or Triffin paradox is the conflict of economic interests that arises between short-term domestic and long-term international objectives for countries whose currencies serve as global reserve currencies. This dilemma was first identified in the 1960s by Belgian-American economist Robert Triffin, who pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, thus leading to a trade deficit.
The use of a national currency, such as the U.S. dollar, as global reserve currency leads to tension between its national and global monetary policy. This is reflected in fundamental imbalances in the balance of payments, specifically the current account, as some goals require an outflow of dollars from the United States, while others require an overall inflow.
https://en.wikipedia.org/wiki/Triffin_dilemma
Rod: the US can both increase money supply and run a trade defecitThe use of a national currency, such as the U.S. dollar, as global reserve currency leads to tension between its national and global monetary policy. This is reflected in fundamental imbalances in the balance of payments, specifically the current account, as some goals require an outflow of dollars from the United States, while others require an overall inflow.
https://en.wikipedia.org/wiki/Triffin_dilemma
Triffin Dilemma: the nation printing a surplus of its own currency in order to supply the world reserve currency is forced into perpetual trade deficits
Is this making any sense to you Rod?
Rod does it strike you as odd that these exact Trifflin stresses on the the US economy that drove us to default in the 70s do not exist today?
Why might flows of USDs back into the US economy and balance of payments not be a problem today? Could it be the petrodollar recycling I tried explaining to you earlier, where USDs are funneled back to the US from the OPEC exporters who use their surplus profits to purchase US securities therefore inflating our capital account and evening out our overall balance of payments? No way, can't be, because the petrodollar doesn't exist, right Rod?
One last thing: you seem to be under the impression that moving your currency to fiat gives you a blank check to print without restraint. You might want to rethink this notion
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I never said petrodollar recycling isnt a thing.
USD is indeed a fiat currency.
No, it doesnt validates it, you are taking massive leaps of logic.
See you are claiming that the USD is pegged to oil, you are claiming that petrodollar recycling causes the US to enter a Trifflin dilemma. None of those things are true.
Nixon cozied OPEC in order to secure an oil supply in the case of potential war with Russia.
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That's not the Triffin Dilemma, how can you be so bad at reading?
The US didnt defaulted.
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Honestly I'm just waiting for conservative republicans to actually start acting like conservative republicans
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There is way to much money at play in politics for that to ever happen.
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What a terrible bill
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The petro dollar system does not mean the dollar is not a fiat currency.
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Omnibus Spending Bill Allows More Illegal Aliens to Be Released into U.S. Through ‘Catch and Release’
http://www.breitbart.com/big-govern...-released-into-u-s-through-catch-and-release/
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Not good
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This is why people are distancing themselves from the GOP. While some of them truly try, most of those assholes just blatantly follow the cash.
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You say that like it's unique to the GOP
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Much more blatant, the GOP candidates lie way more. At least the dems will try and fulfill some of the will of its voter base.
I'm not even attacking the GOP's voter base. With the two party system they are kinda damned if they do damned if they don't.
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The blame goes toward any Republican and Democrat who voted for this
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