Friday, October 30, 2009

The 18 Cent Solution - "Re-Management of US Oil to end Oil Wars"

The 18 Cent Solution



MAY 2008



Robert McElroy's proposition of positive solutions to the wars in the Middle East over Oil, and how we can conserve our own natural gas and oil resources.



It has not been said enough – ‘To support the troops, use less energy’.

Many Americans believed the US invaded Iraq to remove a threat from Saddam Hussein, but it is not an acceptable conclusion in light of 1997 United Oil of California testimony before a US House subcommittee on the need for and challenges to a proposed oil and gas pipeline through Afghanistan (now being proposed without US participation by Iran). Prior to that, Richard Nixon drew a clear conclusion in his 1994 book, Beyond Peace that the US must continue to control, even if it involves military action, access to Middle East oil in order to protect the US domestic economy.



That is why we are in Iraq and have been in the region for at least five decades. It is about oil and it is about our individual energy consuming habits. We have been feeding at the cheap energy trough for nearly 100 years and now find we can’t afford to continue that lifestyle. High gas prices may help wean us away from impulsive and unnecessary energy use and that won’t hurt us, perhaps strengthen us personally, but it is an election year and Americans are complaining about the price of gas and candidates naturally want to solve the problem.

To ease our pain Senators Clinton and McCain propose a three-month moratorium on the 18 cent per gallon federal gas tax. Such a savings when the price of gas is still going to be around $4.00 per gallon raises the question if those candidates are telling us that there is simply no other solution to high gas prices or consider us to be energy addicts who will scramble gratefully when thrown a bone.



Perhaps because energy policy is a convoluted mesh of foreign policy, domestic economic policy, political ideology, and catering to special interests, the 18 cent solution is easy to peddle but it is not a solution and it is offered when there are immediate and effective solutions available.

In her recent testimony before the House Select Committee on Energy Independence and Global Warming Massachusetts Institute of Technology energy expert Melanie A. Kenderdine, who was a former official at the Department of Energy, explained that there are things government can do and can do immediately.



The Strategic Petroleum Reserve is nearly full at 700 million gallons but President Bush continues to purchase millions of gallons of crude thereby increasing demand and rising prices, Ms Kenderdine explained and added that simply releasing millions of gallons from the Reserve on the market would immediately increase supply and drive prices down. She supported her conclusion by contrasting President Bush’s actions to those taken by Bill Richardson when he was Secretary of Energy in the Clinton Administration. Richardson dumped 30 million gallons of crude on the market. “The results were immediate, in spite of the fact that oil had not yet moved into the market--demonstrating the psychological impacts on the market when the U.S. signals its intention to act. . . By the end of the year, actual oil prices had dropped from $30.94 to $20.38 per barrel, a 34% decrease.” She testified.



A more nuanced approach Ms. Kenderdine described would be swapping out the light crude in the Reserve for less expensive dark crude, capturing an immediate profit without lowering the Reserve content. Her suggestions showed saving or profits upwards towards $9 billion.

What seems to be overlooked in the President’s and Congress’ wean-away-from-foreign-oil strategies is 2005 information from the US Energy Information Administration calculating that North America has 100 years of oil resources. Canada is the largest supplier of crude to the US now that the price has made it profitable to extract from Canadian sand. Mexico is an OPEC aligned country but does not have to function under OPEC price controls and the US itself has untapped oil reserves in which investments were justified when oil passed the $40 per barrel price. Where would we be now if the $600 billion we have spent in Iraq had been directed to nurture an energy relationship with our neighbors?

If we used our own oil we would have nearly 100 years to figure out how to meet our energy needs with the estimated 300 trillion cubic feet of natural gas on the continent, solar and bio-energy solutions.



To be sure we would not have lost over 4,000 troops.





##

The 18 Cent Solution - "Re-Management of US Oil to end Oil Wars"

The 18 Cent Solution

MAY 2008

Robert McElroy's proposition of positive solutions to the wars in the Middle East over Oil, and how we can conserve our own natural gas and oil resources.

It has not been said enough – ‘To support the troops, use less energy’.
Many Americans believed the US invaded Iraq to remove a threat from Saddam Hussein, but it is not an acceptable conclusion in light of 1997 United Oil of California testimony before a US House subcommittee on the need for and challenges to a proposed oil and gas pipeline through Afghanistan (now being proposed without US participation by Iran). Prior to that, Richard Nixon drew a clear conclusion in his 1994 book, Beyond Peace that the US must continue to control, even if it involves military action, access to Middle East oil in order to protect the US domestic economy.

That is why we are in Iraq and have been in the region for at least five decades. It is about oil and it is about our individual energy consuming habits. We have been feeding at the cheap energy trough for nearly 100 years and now find we can’t afford to continue that lifestyle. High gas prices may help wean us away from impulsive and unnecessary energy use and that won’t hurt us, perhaps strengthen us personally, but it is an election year and Americans are complaining about the price of gas and candidates naturally want to solve the problem.
To ease our pain Senators Clinton and McCain propose a three-month moratorium on the 18 cent per gallon federal gas tax. Such a savings when the price of gas is still going to be around $4.00 per gallon raises the question if those candidates are telling us that there is simply no other solution to high gas prices or consider us to be energy addicts who will scramble gratefully when thrown a bone.

Perhaps because energy policy is a convoluted mesh of foreign policy, domestic economic policy, political ideology, and catering to special interests, the 18 cent solution is easy to peddle but it is not a solution and it is offered when there are immediate and effective solutions available.
In her recent testimony before the House Select Committee on Energy Independence and Global Warming Massachusetts Institute of Technology energy expert Melanie A. Kenderdine, who was a former official at the Department of Energy, explained that there are things government can do and can do immediately.

The Strategic Petroleum Reserve is nearly full at 700 million gallons but President Bush continues to purchase millions of gallons of crude thereby increasing demand and rising prices, Ms Kenderdine explained and added that simply releasing millions of gallons from the Reserve on the market would immediately increase supply and drive prices down. She supported her conclusion by contrasting President Bush’s actions to those taken by Bill Richardson when he was Secretary of Energy in the Clinton Administration. Richardson dumped 30 million gallons of crude on the market. “The results were immediate, in spite of the fact that oil had not yet moved into the market--demonstrating the psychological impacts on the market when the U.S. signals its intention to act. . . By the end of the year, actual oil prices had dropped from $30.94 to $20.38 per barrel, a 34% decrease.” She testified.

A more nuanced approach Ms. Kenderdine described would be swapping out the light crude in the Reserve for less expensive dark crude, capturing an immediate profit without lowering the Reserve content. Her suggestions showed saving or profits upwards towards $9 billion.
What seems to be overlooked in the President’s and Congress’ wean-away-from-foreign-oil strategies is 2005 information from the US Energy Information Administration calculating that North America has 100 years of oil resources. Canada is the largest supplier of crude to the US now that the price has made it profitable to extract from Canadian sand. Mexico is an OPEC aligned country but does not have to function under OPEC price controls and the US itself has untapped oil reserves in which investments were justified when oil passed the $40 per barrel price. Where would we be now if the $600 billion we have spent in Iraq had been directed to nurture an energy relationship with our neighbors?
If we used our own oil we would have nearly 100 years to figure out how to meet our energy needs with the estimated 300 trillion cubic feet of natural gas on the continent, solar and bio-energy solutions.

To be sure we would not have lost over 4,000 troops.


##

Tuesday, October 27, 2009

Are insurance co's against the public option because they're afraid the gov't might actually run health care BETTER than they have? - post by John Watson

Soraya Navarez - Afraid they may have to cut profits 750%

8 hours ago



Holly Kittleman  Nope.

7 hours ago



John Watson - I don't know why everyone just assumes the government would do a bad job. Look at the mess insurance co's got us into. Maybe it's time to give someone else a chance.

about an hour ago



John Watson@Holly: doesn't the military have a govt-run health plan?

about an hour ago

 

Bill Fulbright

John, there is a misconception here. The insurance companies did not get us here. I used to sell group insurance with my family's general agency during the mid-70's. Health insurance used to cost about 30.00 per family in a group, and about 50.00 for non-group family coverage.



Lawyers started taking cases and encouraging a litigious atmosphere where huge settlements were obtained for relatively normal malpractice suits. Sure, there were some crappy doctors who left sponges and scissors in people, but these low level cases made it harder and more expensive to settle the cases that were serious. Due to the huge increase in numbers of medical malpractice suits levied by less than ethical lawyers (and there were and are some very ethical ones - so no bashing here), the cost of settling these suits began an upward spiral of costs, covered by insurance companies, including the cost of medical malpractice insurance. The doctors were shocked, but in order to keep their practices open, they passed the cost along to the insurance buyer by raising their cost schedule. I watched the state of Texas have to create a pool of insurance for basic limits of liability for Doctors only available at 100/300 for basic limits. This initial level of coverage was no longer offered by insurance companies. Once obtained, the Doctors had to go out to the second and third layers of liability umbrella providers of medical malpractice insurance to get the limits of coverage needed to stay open for business.



If that wasn't enough the Auto Workers Unions and the Oil and Chemical Workers Unions were going on strikes for more benefits, the Arab Emirates were raising the price of oil - in short prices were starting to soar....



In my opinion the upward spiral of costs in the health insurance begain due to uncontrolled/non-regulated medical malpractice suits.... hence the need now some 40 years later to press for Tort Reform.



Insurance works on the law of numbers, where many pay a lower cost for the coverage received by a few.. all actuarially proven.



Sure, the insurance companies make a profit, and they should. Did you want to support the beginning of a dis-incentive program that will affect lawyers, doctors, insurance companies - effectively chasing away the good guys because some bad guys went nutty and greedy? (this is now underway with the banks not even in the TARP program) . If the talented people are chased away due to no incentive, and the reins of the institutions are left in the hands of the less capable...... what do you think will be the case? Better quality or less quality?



Look, there is a happy balance for it all, and I think we will find it, but not at the point of a gun. We are being asked to accept a half-baked plan that may not be so good at the moment. There are some very good examples of social health care in europe, from which we can learn alot, and implement a lot.



We are being rushed into a second or third rate solution due to politics, rather than the realistic assessment of real health reform, for which I am in favor.



I have been out of work and dependent upon unemployment insurance, but was not allowed to receive any medical care because I had earned too much money previously. So because I worked for many years and had contributed into this public system, when I needed it for me and my family, it was not there for me.



I do not challenge you lightly, but with real world experience.

Are insurance co's against the public option because they're afraid the gov't might actually run health care BETTER than they have? - post by John Watson

Soraya Navarez - Afraid they may have to cut profits 750%
8 hours ago

Holly Kittleman  Nope.
7 hours ago

John Watson - I don't know why everyone just assumes the government would do a bad job. Look at the mess insurance co's got us into. Maybe it's time to give someone else a chance.
about an hour ago

John Watson@Holly: doesn't the military have a govt-run health plan?
about an hour ago
 
Bill Fulbright
John, there is a misconception here. The insurance companies did not get us here. I used to sell group insurance with my family's general agency during the mid-70's. Health insurance used to cost about 30.00 per family in a group, and about 50.00 for non-group family coverage.

Lawyers started taking cases and encouraging a litigious atmosphere where huge settlements were obtained for relatively normal malpractice suits. Sure, there were some crappy doctors who left sponges and scissors in people, but these low level cases made it harder and more expensive to settle the cases that were serious. Due to the huge increase in numbers of medical malpractice suits levied by less than ethical lawyers (and there were and are some very ethical ones - so no bashing here), the cost of settling these suits began an upward spiral of costs, covered by insurance companies, including the cost of medical malpractice insurance. The doctors were shocked, but in order to keep their practices open, they passed the cost along to the insurance buyer by raising their cost schedule. I watched the state of Texas have to create a pool of insurance for basic limits of liability for Doctors only available at 100/300 for basic limits. This initial level of coverage was no longer offered by insurance companies. Once obtained, the Doctors had to go out to the second and third layers of liability umbrella providers of medical malpractice insurance to get the limits of coverage needed to stay open for business.

If that wasn't enough the Auto Workers Unions and the Oil and Chemical Workers Unions were going on strikes for more benefits, the Arab Emirates were raising the price of oil - in short prices were starting to soar....

In my opinion the upward spiral of costs in the health insurance begain due to uncontrolled/non-regulated medical malpractice suits.... hence the need now some 40 years later to press for Tort Reform.

Insurance works on the law of numbers, where many pay a lower cost for the coverage received by a few.. all actuarially proven.

Sure, the insurance companies make a profit, and they should. Did you want to support the beginning of a dis-incentive program that will affect lawyers, doctors, insurance companies - effectively chasing away the good guys because some bad guys went nutty and greedy? (this is now underway with the banks not even in the TARP program) . If the talented people are chased away due to no incentive, and the reins of the institutions are left in the hands of the less capable...... what do you think will be the case? Better quality or less quality?

Look, there is a happy balance for it all, and I think we will find it, but not at the point of a gun. We are being asked to accept a half-baked plan that may not be so good at the moment. There are some very good examples of social health care in europe, from which we can learn alot, and implement a lot.

We are being rushed into a second or third rate solution due to politics, rather than the realistic assessment of real health reform, for which I am in favor.

I have been out of work and dependent upon unemployment insurance, but was not allowed to receive any medical care because I had earned too much money previously. So because I worked for many years and had contributed into this public system, when I needed it for me and my family, it was not there for me.

I do not challenge you lightly, but with real world experience.

Tuesday, October 20, 2009

The Ten Cannots

TEN CANNOTS - - by William J. H. Boetcker



Here are 10 timeless truths that transcend all politics:



You cannot bring about prosperity by discouraging thrift.

You cannot strengthen the weak by weakening the strong.

You cannot help little men by tearing down big men.

You cannot lift the wage earner by pulling down the wage payer.

You cannot help the poor by destroying the rich.

You cannot establish sound security on borrowed money.

You cannot further the brotherhood of man by inciting class hatred.

You cannot keep out of trouble by spending more than you earn.

You cannot build character and courage by destroying men's initiative and independence.

And you cannot help men permanently by doing for them what they can and should do for themselves.





BTW

(Quoted in a Ronald Reagan Speech in 1992 and often mis-attributed to Abe Lincoln because of its similarity in spirit to Honest Abe’s other writings)!

The Ten Cannots

TEN CANNOTS - - by William J. H. Boetcker

Here are 10 timeless truths that transcend all politics:

You cannot bring about prosperity by discouraging thrift.
You cannot strengthen the weak by weakening the strong.
You cannot help little men by tearing down big men.
You cannot lift the wage earner by pulling down the wage payer.
You cannot help the poor by destroying the rich.
You cannot establish sound security on borrowed money.
You cannot further the brotherhood of man by inciting class hatred.
You cannot keep out of trouble by spending more than you earn.
You cannot build character and courage by destroying men's initiative and independence.
And you cannot help men permanently by doing for them what they can and should do for themselves.


BTW
(Quoted in a Ronald Reagan Speech in 1992 and often mis-attributed to Abe Lincoln because of its similarity in spirit to Honest Abe’s other writings)!

Saturday, October 17, 2009

Obama Poised to Cede US Sovereingty

Lord Christopher Monckton, Climate Scientist reveals treaty plans to create a world enforcement government structure!!

Here are links to the Copenhagen Climate Treaty so you can read it for yourself.

NGO Copenhagen Climate Treaty (pdf)

NGO Copenhagen Climate Treaty Full Legal Text (pdf)

NGO Copenhagen Climate Treaty (Word) vol. 1

NGO Copenhagen Climate Treaty Full Legal Text (Word) vol.2











Lord Christopher Monckton, a highly respected Climate Specialist, has delivered an address in which he summarizes a "Climate Debt" Treaty to be signed in December 2009 in Copenhagen in which there will be established:

1. a World Government in which there is no election, and no way to cancel out once it is signed.

2. a redistribution of wealth to 3rd world nations on the premise that we have burned too much CO2 and they haven't so we owe them.

3. the ability to ENFORCE THE TERMS OF THE TREATY.



OUR CHOICES ARE TO:



1. BLOCK THE PRESIDENT FROM SIGNING THIS TREATY - Very Unlikely - as a Nobel Peace Prize winner and extreme left leanings he WILL Sign it.

2. BLOCK THE RATIFICATION OF THE TREATY IN OUR CONGRESS - A real possibility if we ACT by letting our representatives know where we stand - NO WAY will we be sub to a World Governmental Entity put in place by a treaty.

3. A long shot would be for States to secede from the USA. Texas is the most prepared to do this. Others will need time to figure it out.



There are a number of these types of Treaties floating around. The most recent of which is the L.O.S.T treaty, in which we cede our Naval Authority in the Northern Seas around Russia and the Seas between that and Canada. The Sovreign rights that are ours would have been ceded to a World Enforcement Agency with the power to Enforce the Treaty, under which we would be judged by some 75 countries who are NOT our friends. So that is a dangerously similar treaty not yet ratified, but could be. President Reagan vehemenently opposed this treaty, and it was very well known during his administration. Law of The Sea Treaty 2007; Law of the Sea Treaty - Senate Moves to ratify March 2009 - still in debate



Three is another Treaty regarding the leveling of our economic value by creating a North and South American currency - an "Amero" to link our economies together into a larger, and very likely weaker currency.



Please give Lord Monckton a listen. He is INFORMED and not afraid to speak up.

Obama Poised to Cede US Sovereingty

Lord Christopher Monckton, Climate Scientist reveals treaty plans to create a world enforcement government structure!!
Here are links to the Copenhagen Climate Treaty so you can read it for yourself.
NGO Copenhagen Climate Treaty (pdf)
NGO Copenhagen Climate Treaty Full Legal Text (pdf)
NGO Copenhagen Climate Treaty (Word) vol. 1
NGO Copenhagen Climate Treaty Full Legal Text (Word) vol.2





Lord Christopher Monckton, a highly respected Climate Specialist, has delivered an address in which he summarizes a "Climate Debt" Treaty to be signed in December 2009 in Copenhagen in which there will be established:
1. a World Government in which there is no election, and no way to cancel out once it is signed.
2. a redistribution of wealth to 3rd world nations on the premise that we have burned too much CO2 and they haven't so we owe them.
3. the ability to ENFORCE THE TERMS OF THE TREATY.

OUR CHOICES ARE TO:

1. BLOCK THE PRESIDENT FROM SIGNING THIS TREATY - Very Unlikely - as a Nobel Peace Prize winner and extreme left leanings he WILL Sign it.
2. BLOCK THE RATIFICATION OF THE TREATY IN OUR CONGRESS - A real possibility if we ACT by letting our representatives know where we stand - NO WAY will we be sub to a World Governmental Entity put in place by a treaty.
3. A long shot would be for States to secede from the USA. Texas is the most prepared to do this. Others will need time to figure it out.

There are a number of these types of Treaties floating around. The most recent of which is the L.O.S.T treaty, in which we cede our Naval Authority in the Northern Seas around Russia and the Seas between that and Canada. The Sovreign rights that are ours would have been ceded to a World Enforcement Agency with the power to Enforce the Treaty, under which we would be judged by some 75 countries who are NOT our friends. So that is a dangerously similar treaty not yet ratified, but could be. President Reagan vehemenently opposed this treaty, and it was very well known during his administration. Law of The Sea Treaty 2007; Law of the Sea Treaty - Senate Moves to ratify March 2009 - still in debate

Three is another Treaty regarding the leveling of our economic value by creating a North and South American currency - an "Amero" to link our economies together into a larger, and very likely weaker currency.

Please give Lord Monckton a listen. He is INFORMED and not afraid to speak up.

Tuesday, October 13, 2009

Follow the money.... another article on Dollar Devaluation

No, these are not rumors.  They are perceptions that drive rumors, which then affect policy.  World perceptions.  not necessarily USA perceptions.   We are not the only actors on the stage, nor can we afford to think like that.





Arabian nations look to Euro rather than Dollar for trading oil

China and Russia talk about another type of world currency





Recent comments published on Bloomberg





Dollar as "Also Ran"  or read on below





Demise of the Dollar or read on below





So as it is being said in as many ways as possible... WAKE UP AMERICA





We must re-organize the premise of our economy and dollar.



Let's talk about a plan to save the dollar, initiate and implement the plan, and take it to the market.

Follow the money.... another article on Dollar Devaluation

No, these are not rumors.  They are perceptions that drive rumors, which then affect policy.  World perceptions.  not necessarily USA perceptions.   We are not the only actors on the stage, nor can we afford to think like that.


Arabian nations look to Euro rather than Dollar for trading oil
China and Russia talk about another type of world currency


Recent comments published on Bloomberg


Dollar as "Also Ran"  or read on below


Demise of the Dollar or read on below


So as it is being said in as many ways as possible... WAKE UP AMERICA


We must re-organize the premise of our economy and dollar.

Let's talk about a plan to save the dollar, initiate and implement the plan, and take it to the market.

Thursday, October 08, 2009

Global Currency in the Making - Dollar slide gives rise to new reserve

Watch it!





Here is the beginning of the shift of the monetary base movement.  





A new Global Currency is in the making.  A change in the medium of monetary reserve = a change in the culture.  China seeks to protect its large exposure against the declining dollar by calling for a stronger currency than the euro...If China manages to restructure a Global Currency ....read on...





Dollar's Slide Gives Rise to Calls for New Reserve





By Frank AhrensWashington Post Staff Writer

Wednesday, October 7, 2009





The U.S. dollar continued its six-month slide Tuesday amid a growing international chorus that wants the dollar replaced -- or at least supplemented -- as the world's reserve currency, a move that would end the greenback's six decades of global dominance.





The dollar has come under attack from abroad as the economic crisis has played out, thanks to the Federal Reserve's decision to flood a seized-up financial system with liquidity last fall. The central bank's moves likely staved off deflation, but the massive influx of new dollars has devalued existing ones. Foreign nations are worried that the massive U.S. national debt and rising deficits are not being addressed. And though inflation is not yet a concern in the United States, a prolonged slide in the dollar's value could lead to higher prices for consumers.





Further, large emerging economies -- such as China, Russia, Brazil and India -- are tired of kow-towing to the American buck, and sense an opportunity to knock a weakened dollar off its imperial perch.





"The U.S. dollar is headed for also-ran status, and it will continue to lose its value against many other currencies and assets," Miller Tabak equity strategist Peter Boockvar said. "The rest of the world wants the U.S. dollar to lose influence, but no one wants it to be abrupt, as it's in no one's interest. An evolutionary process is what is wanted."

The question is: When will that happen?





"In the next two to three years, it is highly unlikely to see the dollar replaced," said Eswar Prasad, an economics professor at Cornell University and a senior fellow at the Brookings Institution in Washington. "Over the next decade, though, we would expect to see other currencies play a much more significant role."





The dollar fell to nearly its lowest point of the year against the yen and euro on Tuesday, which sent the price of gold surging to a record intraday high above $1,045 per ounce, as investors sought a hedge against inflation and foreign nations continued to stockpile the precious metal.





For the American consumer, a falling dollar means U.S. exports sell better overseas, which can lead to more jobs here. But it also means imports costs more, which means higher prices at U.S. stores.

"For the average Joe, the implications of a crisis of confidence in the dollar could end up in higher borrowing costs, lower government expenditures -- so that means reduced services -- and higher taxes," Prasad said. "Most likely, some combination of all of the above."





Stocks, which typically move opposite of the dollar, staged a strong rally on Tuesday, continuing their fast Monday start. The Dow Jones industrial average and the broader Standard & Poor's 500-stock index both gained 1.4 percent, while the tech-heavy Nasdaq surged 1.7 percent.





The U.S. dollar has been the world's reserve currency since World War II. Central banks and financial institutions in other nations hold dollars to pay off foreign obligations, or to influence their currency's exchange rate. Commodities, such as oil, are priced in dollars, which spreads the dollar's influence around the world.





But the dollar's dominance is being challenged, thanks to the crisis.





China was the first major power to attack the greenback, calling in March for the dollar to be replaced as the world's reserve currency. China holds more U.S. debt than any other country -- about $800 billion -- and the further the dollar drops, the less the value of the U.S. debt owed to China.





Other nations have followed China's criticism. In March, Kazakhstan criticized the dollar and called for the creation of a new currency it calls the "acmetal" (a coinage combining "acme" and "capital"). Last month, Iran shifted its reserve currency from the dollar to the euro, a move that is likely more political than economic and a response to harsh U.S. criticism of Iran's nuclear moves.





But major powers have spoken against the dollar, as well. In September, Russia said it remains satisfied with the dollar as a reserve currency but said others are also needed. At an international investment summit last month, Russian Prime Minister Vladimir Putin criticized the United States -- and implicitly, Federal Reserve Chairman Ben S. Bernanke, who controls the money supply -- for "uncontrolled issue of dollars."

Both China and Russia have called for a new "global supercurrency," similar but larger in scale to the euro, that would replace the dollar.





Even the world's big financial institutions are piling on.





"The United States would be mistaken to take for granted the dollar's place as the world's predominant reserve currency," World Bank President Robert Zoellick said in a speech last week.







Global Currency in the Making - Dollar slide gives rise to new reserve

Watch it!


Here is the beginning of the shift of the monetary base movement.  


A new Global Currency is in the making.  A change in the medium of monetary reserve = a change in the culture.  China seeks to protect its large exposure against the declining dollar by calling for a stronger currency than the euro...If China manages to restructure a Global Currency ....read on...


Dollar's Slide Gives Rise to Calls for New Reserve



By Frank AhrensWashington Post Staff Writer
Wednesday, October 7, 2009


The U.S. dollar continued its six-month slide Tuesday amid a growing international chorus that wants the dollar replaced -- or at least supplemented -- as the world's reserve currency, a move that would end the greenback's six decades of global dominance.


The dollar has come under attack from abroad as the economic crisis has played out, thanks to the Federal Reserve's decision to flood a seized-up financial system with liquidity last fall. The central bank's moves likely staved off deflation, but the massive influx of new dollars has devalued existing ones. Foreign nations are worried that the massive U.S. national debt and rising deficits are not being addressed. And though inflation is not yet a concern in the United States, a prolonged slide in the dollar's value could lead to higher prices for consumers.


Further, large emerging economies -- such as China, Russia, Brazil and India -- are tired of kow-towing to the American buck, and sense an opportunity to knock a weakened dollar off its imperial perch.


"The U.S. dollar is headed for also-ran status, and it will continue to lose its value against many other currencies and assets," Miller Tabak equity strategist Peter Boockvar said. "The rest of the world wants the U.S. dollar to lose influence, but no one wants it to be abrupt, as it's in no one's interest. An evolutionary process is what is wanted."
The question is: When will that happen?


"In the next two to three years, it is highly unlikely to see the dollar replaced," said Eswar Prasad, an economics professor at Cornell University and a senior fellow at the Brookings Institution in Washington. "Over the next decade, though, we would expect to see other currencies play a much more significant role."


The dollar fell to nearly its lowest point of the year against the yen and euro on Tuesday, which sent the price of gold surging to a record intraday high above $1,045 per ounce, as investors sought a hedge against inflation and foreign nations continued to stockpile the precious metal.


For the American consumer, a falling dollar means U.S. exports sell better overseas, which can lead to more jobs here. But it also means imports costs more, which means higher prices at U.S. stores.
"For the average Joe, the implications of a crisis of confidence in the dollar could end up in higher borrowing costs, lower government expenditures -- so that means reduced services -- and higher taxes," Prasad said. "Most likely, some combination of all of the above."


Stocks, which typically move opposite of the dollar, staged a strong rally on Tuesday, continuing their fast Monday start. The Dow Jones industrial average and the broader Standard & Poor's 500-stock index both gained 1.4 percent, while the tech-heavy Nasdaq surged 1.7 percent.


The U.S. dollar has been the world's reserve currency since World War II. Central banks and financial institutions in other nations hold dollars to pay off foreign obligations, or to influence their currency's exchange rate. Commodities, such as oil, are priced in dollars, which spreads the dollar's influence around the world.


But the dollar's dominance is being challenged, thanks to the crisis.


China was the first major power to attack the greenback, calling in March for the dollar to be replaced as the world's reserve currency. China holds more U.S. debt than any other country -- about $800 billion -- and the further the dollar drops, the less the value of the U.S. debt owed to China.


Other nations have followed China's criticism. In March, Kazakhstan criticized the dollar and called for the creation of a new currency it calls the "acmetal" (a coinage combining "acme" and "capital"). Last month, Iran shifted its reserve currency from the dollar to the euro, a move that is likely more political than economic and a response to harsh U.S. criticism of Iran's nuclear moves.


But major powers have spoken against the dollar, as well. In September, Russia said it remains satisfied with the dollar as a reserve currency but said others are also needed. At an international investment summit last month, Russian Prime Minister Vladimir Putin criticized the United States -- and implicitly, Federal Reserve Chairman Ben S. Bernanke, who controls the money supply -- for "uncontrolled issue of dollars."
Both China and Russia have called for a new "global supercurrency," similar but larger in scale to the euro, that would replace the dollar.


Even the world's big financial institutions are piling on.


"The United States would be mistaken to take for granted the dollar's place as the world's predominant reserve currency," World Bank President Robert Zoellick said in a speech last week.



Monday, October 05, 2009

Arabs Plot to Drop Dollar from OIL TRADING

The Demise of the Dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

Tuesday, 6 October 2009

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.

REX

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.



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.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.



Arabs Plot to Drop Dollar from OIL TRADING

The Demise of the Dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

Tuesday, 6 October 2009

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.

REX

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.



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.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.