Oh boy...OPEC Interested in Non-Dollar Currency

The writing is on the wall. The dollar will be worthless before you know it.
http://story.news.ask.com//article/20071118/D8T0CUPG0.html

 

I was reading about this today. Ahmadinejad bad mouthed the dollar and called it a worthless piece of paper. Unfortunately, he is telling the truth, and doing so publicly will cause even more investors to flee. Oil being priced in dollars on the international market is the only thing that has really stopped it from collapsing. I don't know if OPEC will make the move, as long as the Saudis continue to back the dollar, it will hold, but I doubt the Saudis will hold this view forever, because they are losing money, and no one likes to lose money

The dominoes have started to fall, it is only a matter of time before we really start to see prices rise here in the U.S. Now is perhaps the best time in history to have some of your money in Silver and Gold.

 

The difference is, Iranians can't easily invest in the US with the sanctions. Saudi Arabia can spend it's US dollars here and they do.

But either way, it's bad for the dollar because when the foreign stakeholders start to liquidate their cash/debt reserves, the inflation will be enormous. We rely on them to hold and keep that currency out of circulation. In circulation, it lowers the value of each individual dollar already circulating.

Supply > Demand.

 

Either that or buy other tangible assets that you know can not loose value, like art, jewelry, collectibles and maybe properties in South America I'm thinking while we can still afford them for a decent price.

 

China has already abolished yuan-dollar peg of 8.28 and the dollar is down to 7.425

70% of everything sold in Wal-Mart comes from China.

Joe Sixpack will start to wake up around 4 yuan to the dollar, when he can't afford to shop at Wal-mart.

 

How difficult is it for a foreigner to buy property in the US? I'm wondering if it would be practical to invest long-term while both the $ and the property market were low. Long term you could make a killing.

 

Europeans with the Euro can get some amazing deals here in the states. Think about, 47% less. A 100,000 house you are getting it for 63,000 Euros, thats crazy considering it was the opposite a few years ago. Its a sickening feeling to see our wealth loose value like this. America and the dollar are taking a dump! And I blame Bush and his administration for creating such an instability and uncertainty Geopolitically, but the sheeple don't see it like that, until they wake up one day and realize that whatever they own is worth nothing and we become a third world country with no middle class and a worthless piece of paper as a currency. Bravo! We've done it to ourselves and can't pass the blame to anyone else for being ignorant.

 

I'd be even better off as I'd be buying with the £. I remember a few years back when the exchange rate was 1.4, last week it was more than 2! I figure buying for cash now could generate amazing returns in 5-10 years time when hopefully the economy and currecy prices recover.

 

There are many staunch allies in OPEC who really wouldn't want to do this, and I hope they stand by it.

Does anyone have some realistic expectations if this does happen?

 

Watch the dollar. If it drops below 70 on the currency index, we're going to be in a world of hurt.

 

Actually they haven't they let the yuan trade in a wider range but they still peg the yuan to the dollar.

You obviously don't understand how currency markets work, because if you did you wouldn't blame Bush and surely not for the geopolitical uncertainty. Geopolitical uncertainty has almost nothing to do with the strength of the dollar or weakness of the dollar. But then again its easier to blame Bush then to actually understand how things operate and why they are going down.

That's not a bad idea, I believe the dollar has another year or two tops of falling before recovering nicely in the years that will follow assuming that inflation will be in check.

Its not difficult at all. If fact if you have an over valued currency and add that to prices falling in our real estate market you can make a very nice return in 5-10 years. Maybe even double your money in that time.

I read that article Sunday the biggest pushers of the move are two counties who have the greatest interest in hurting American which are Iran and Venezuela.

 

http://money.cnn.com/2007/11/19/news/international/oil_opec/index.htm

Very interesting article related to this thread.

 

Yeah, I blame the corrupt government of American and the average American citizen for this mess. I blame the government because they cause the problem, but I blame the average American because they are ignorant of the problem.

I pisses me off to see the currency being devalued, I mean, you really feel it when you pay for something in Euros. The average American won't see it until a gallon of Milk is $13. But if you buy anything in Euros right now, there is no doubt that this situation is serious.

 

Except we buy milk from made in the United States so currency devolution doesn't effect things made in the united states.

 

This really isn't true, we may make the milk the US, but where does the feed, medical supplies, etc come from, most likely somewhere exports are involved and that will effect the price.

 

Do you know how much a gallon of milk costs here in Florida right now? $5.29 at Publix. What do you think the dairy producers are going to do when they have to pay $5/gallon for gas? They will increase your price. So your formula does not work. Companies ALWAYS pass the burden to the consumer.

 

This is very true, and always on point as always.

 

As mentioned by others, you're forgetting about the cost of farm equipment that comes from foreign markets, either completely assembled or components.

Then of course there is the transportation costs to move milk and other goods within the country. As fuel costs go up, so does the price at the counter to reflect it.

That's why Chairman Bernanke was stunned and sounded like an idiot when Ron Paul grilled him on currency devaluation. We are in an import economy. A weaker dollar affects everything we buy, either directly, indirectly or through associative inflation.

 

The feed I believe is a large majority of corn based feed, which last time I checked is grown in the Midwest. The medical supplies and etc can also come from America suppliers which would mean that the falling dollar would have no effect on them.

 

John Deere assembles tractors in Iowa, where the majority of their customers are. Your also forgetting that companies have the ability to hedge currencies, that companies that sell overseas often keep money overseas to pay suppliers and such. Then what you don't mention is that foreign companies want to maintain their access to the US consumer which in doing so they absorb some of the cost of associated with a falling currency to maintain market share.

I do agree with you with the price of oil and transportation cost but very little of that is associated to the falling dollar. Since August the dollar is down 8% while the price of oil is up 44%.