International crude oil sales (and market price quotations) are conventionally conducted in US dollars (USD). Many people believe that this has some positive implications for the USD and the American economy in general, and they refer to the USD as the "Petrodollar". The story goes that the use of USD in international oil transactions means that the USD is an "oil-backed" currency, and the end of USD-denominated oil sales would cause a rapid decline in the value of the USD.
Recently, Iran announced that they had stopped accepting payment for oil exports in US Dollars (USD), and would henceforth only accept Euros (EUR) instead. This was seen by many as a grevious blow to American economic hegomony, and the same people commonly believe that Saddam Hussein's imminent plan to do the same thing was one of the main motivations for the US invasion of Iraq. Anti-American leftists have gleefully reported on the coming abandonment of the "Petrodollar" for years.
However, the idea that the US economy is propped up by the "Petrodollar" is complete nonsense. What matters is how many USD foreigners want to retain, and that in turn is driven by demand for US goods and services (plus other factors). The currency oil is traded in is not one of those factors.
Scenario 1 (USD oil sales): You have USD. Iran accepts payment for oil in USD... but they would rather hold Euros instead. So they trade USD for EUR in the FX market.
Scenario 2 (EUR oil sales): You have USD. Iran is not accepting the Great Satan's money anymore, they only sell oil in Euros now. So you trade USD for EUR in the FX market and buy your oil. Iran keeps the Euros.
What's the difference? There is no difference. You could change the buyer's starting currency from USD to CAD or EUR or rupees or ringits or yen or anything else and there is still no difference. (OK, there is a very, very slight increase in the liquidity of the USD in global FX markets, but the global oil market is NOTHING compared to the global market in FX, it makes very little difference).
American foreign policy and international macroeconomics are interesting things to think about.... the "petrodollar" is no help.
Showing posts with label International Affairs. Show all posts
Showing posts with label International Affairs. Show all posts
Sunday, August 12, 2007
Sunday, December 10, 2006
Laughed Behind: Tribulation Farce
I've just spent far too much of my Sunday reading a savagely funny dissection of the geopolitical naivety, lack of imagination, errors of continuity and logic, and sheer Bad Writing of the first novel of the "Left Behind" series.
http://slacktivist.typepad.com/slacktivist/left_behind/index.html
If you don't know it, "Left Behind" is a 12-book series by Jeffrey Jenkins and Timothy LaHaye about the Rapture, the event many Christians believe will take place (any day now) in which all of them - plus all children - everywhere in the world, will immediately *disappear*, being whisked directly to Heaven by God. Thereafter, a World Government is formed, the anti-Christ comes, and various extremely unpleasant events happen - all of which make those Left Behind wish strongly that they were somewhere else. The theme of the Left Behind books is: "you intellectuals, you laughed at us. Well, we told you so!"
This would all be rather silly, and of no importance, if it were not for a few observations:
1. Many who believe in the Rapture take features of the modern world like European monetary union, 9/11, the war in Iraq to be harbingers of the imminence of the Rapture. (The first and most important event, I'm told, is the founding of the state of Israel).
2. It is plain that many who believe in the Rapture *want* it to happen - they can't wait for it, in fact. This affects how they think and it affects how they vote.
3. The Left Behind series has sold something like 50 million copies. There are *millions* of people who believe this stuff. Even in the darkest depths of liberal Canada, I've met people who believe this stuff. In Democratic areas of the U.S. (such as Seattle, where I worked for a time) they are numerous indeed - and in the more religious areas of the U.S. they are apparently a veritable plague. *Somebody* is buying these 50 million books.
I will let Fred Clark, who is a much better writer than I am, reiterate the point:
Fred's review (as a series of blog posts over the past two years) reads as though he put more effort into it than the authors of the book he is reviewing did. It is hilarious and highly recommended.
An interesting element: careful "scholars" of the book of Revelation have noted that the allegorical tale therein seems to refer to Europe (the ten headed monster, a la the 10 members of the EU - although it's actually over twenty now), Russia (Gog and Magog, apparently), Israel (explicitly by name)... but there seems to be a player left out. The world's sole superpower, the home of most of the True Believers of this stuff, seems not to be referred to in Revelations. Is the United States supposed to lose power and influence before this stuff comes to pass? The way George Bush governs the country - by seeming deliberately to want to destroy America's economic position, military capabilities, and international standing - I almost wonder if his secret motivation is not to speed the Rapture along.
http://slacktivist.typepad.com/slacktivist/left_behind/index.html
If you don't know it, "Left Behind" is a 12-book series by Jeffrey Jenkins and Timothy LaHaye about the Rapture, the event many Christians believe will take place (any day now) in which all of them - plus all children - everywhere in the world, will immediately *disappear*, being whisked directly to Heaven by God. Thereafter, a World Government is formed, the anti-Christ comes, and various extremely unpleasant events happen - all of which make those Left Behind wish strongly that they were somewhere else. The theme of the Left Behind books is: "you intellectuals, you laughed at us. Well, we told you so!"
This would all be rather silly, and of no importance, if it were not for a few observations:
1. Many who believe in the Rapture take features of the modern world like European monetary union, 9/11, the war in Iraq to be harbingers of the imminence of the Rapture. (The first and most important event, I'm told, is the founding of the state of Israel).
2. It is plain that many who believe in the Rapture *want* it to happen - they can't wait for it, in fact. This affects how they think and it affects how they vote.
3. The Left Behind series has sold something like 50 million copies. There are *millions* of people who believe this stuff. Even in the darkest depths of liberal Canada, I've met people who believe this stuff. In Democratic areas of the U.S. (such as Seattle, where I worked for a time) they are numerous indeed - and in the more religious areas of the U.S. they are apparently a veritable plague. *Somebody* is buying these 50 million books.
I will let Fred Clark, who is a much better writer than I am, reiterate the point:
This eagerness, this enthusiasm for apocalypse, is theologically malodorous, but it is also politically dangerous. Here again are L&J and
their 50 million readers cheering for entropy, celebrating calamity, wars and
rumors of war as the confirmation of their desires, and railing against
peace and progress as setbacks to this consumation for which they devoutly
wish. They believe that things must fall apart and the center must not hold,
because even now the beast is slouching toward Jerusalem.They want this to happen. And, whenever they can, they vote for it.
Fred's review (as a series of blog posts over the past two years) reads as though he put more effort into it than the authors of the book he is reviewing did. It is hilarious and highly recommended.
An interesting element: careful "scholars" of the book of Revelation have noted that the allegorical tale therein seems to refer to Europe (the ten headed monster, a la the 10 members of the EU - although it's actually over twenty now), Russia (Gog and Magog, apparently), Israel (explicitly by name)... but there seems to be a player left out. The world's sole superpower, the home of most of the True Believers of this stuff, seems not to be referred to in Revelations. Is the United States supposed to lose power and influence before this stuff comes to pass? The way George Bush governs the country - by seeming deliberately to want to destroy America's economic position, military capabilities, and international standing - I almost wonder if his secret motivation is not to speed the Rapture along.
Sunday, July 31, 2005
Does Israel have the right to exist (and if so, how would you have it act?)
I've wondered about this one for a while. I would love to get into a serious discussion someday with a supporter of the Palestinian cause about this. What do you want all the Jewish Israelis to do? Drop dead on the spot? Pack up and move to Florida? Allow the right of return? Abandon the West Bank/Gaza strip? Provide better compensation to all Palestinians who no longer have their homes?
And if Israel has no right to exist in its current form, why does Canada? The only difference between the two countries is that Canada has far more room and fewer troublesome natives.... the land theft in the two countries differs only by scale.
So why does ANY country have the right to exist? Every country in the world is built on top of the graves of the disposessed.
And if Israel has no right to exist in its current form, why does Canada? The only difference between the two countries is that Canada has far more room and fewer troublesome natives.... the land theft in the two countries differs only by scale.
So why does ANY country have the right to exist? Every country in the world is built on top of the graves of the disposessed.
Tuesday, July 12, 2005
Should you bow down to terrorism?
At his excellent blog Informed Comment (at http://www.juancole.com/), Juan Cole wrote something really interesting. In the course of a lengthy post about Bin Laden, Ariel Sharon, et al, Cole wrote (and I encourage you to check out the original)...
When I read this, I had what is known as a "moment of clarity" (sharing such moments is what this blog is about).
If we are doing the right thing, and other people oppose it and are willing to use terrorism to stop it, then we should keep doing it and fight on against the terrorists.
But if we are doing the WRONG thing to start with, and terrorists attack us for it, then we perhaps should NOT say "we will never bow down to terrorism". Perhaps we should say "you know, those terrorists have a point, and they are making it the only way they can."
If what Sharon is doing were the right thing, morally and politically, then he should do it anyway and we'll just soldier on against the terrorists. But it is wrong in the first place, wrong morally, and wrong in international law and an insult to the United States in completely departing from the roadmap.
When I read this, I had what is known as a "moment of clarity" (sharing such moments is what this blog is about).
If we are doing the right thing, and other people oppose it and are willing to use terrorism to stop it, then we should keep doing it and fight on against the terrorists.
But if we are doing the WRONG thing to start with, and terrorists attack us for it, then we perhaps should NOT say "we will never bow down to terrorism". Perhaps we should say "you know, those terrorists have a point, and they are making it the only way they can."
Sunday, December 05, 2004
Iraq elections - so what?
I think the controversy about whether to reschedule Iraq's election misses the point. Bush seems to think that the election will change something, but I don't think it will. Right now, the insurgents (Sunnis mostly, with a sprinking of foreign Jihadis?) appear to be slaughtering the new Iraq National Guard (Shiites and Kurds mostly). As long as that continues, as long as the "government" cannot impose authority on the country (which they plainly cannot at this point - in fact the situation appears to be growing worse daily), then it doesn't matter if it is "elected" or not.
Given the performance of the Iraq National Guard and police against the insurgents, I think the US is going to be in Iraq for years to come. 140,000 troops are barely keeping a lid on things. Does anyone doubt that there would be a full fledged civil war 5 minutes after an American departure? When will the US be able to reduce its committment? Looks to me like *years* off.
Given the performance of the Iraq National Guard and police against the insurgents, I think the US is going to be in Iraq for years to come. 140,000 troops are barely keeping a lid on things. Does anyone doubt that there would be a full fledged civil war 5 minutes after an American departure? When will the US be able to reduce its committment? Looks to me like *years* off.
Why did 9/11 happen?
That was the first question I asked myself on that terrible day: "What the hell was *that* for?"
I'm not going to explore the question of "did America get what it deserved" in this post, nor am I going to look at any conspiracy theories. Nor do I think, that in asking the question, I am seeking to absolve the people behind 9/11, or justify their actions. I'm just going to assume that the official story behind 9/11 is accurate (ie that 19 Arabs, trained and funded by Osama Bin Laden and his 'Al Queda' group, hijacked the four planes with boxcutters and crashed them into NY and Washington) and ask "what was on the minds of the people behind this?" After all, you certainly can't question the *sincerity* and *commitment* of the attackers. They knew they were going to die too. What makes them so?
The standard administration response has been: "they hate us because we're so great. They hate us for our freedom, they hate us for our prosperity, they hate us because we're diverse, they hate us because we're democratic."
I always thought that way of thinking was both wrong and dangerous. Firstly, it's pretty plainly wrong. Are 19 men really ready to strap on an airplane and die (as James Fallows in the Atlantic Monthly puts it) "just to keep us from voting in the Iowa primaries?". Other Western countries are democratic too. Why aren't there terrorists bombing Canada? Or Switzerland? Or Sweden? Those countries vote too, you know! They're prosperous, they're diverse, yet they don't get bombed.
This way of thinking is also dangerous because it deflects attention away from particular *actions* of the United States, and absolves the United States of any possible need, responsibility, or ability to take the greivances of the Arab world seriously. If Al Queda wants to kill everyone in the United States unless the country turns into an Islamic theocracy, then there's obviously no grounds for negotiation or understanding. They hate us and want to kill us, so we'd better kill them first.
However, I think that is highly unlikely to be true.
I'm not going to explore the question of "did America get what it deserved" in this post, nor am I going to look at any conspiracy theories. Nor do I think, that in asking the question, I am seeking to absolve the people behind 9/11, or justify their actions. I'm just going to assume that the official story behind 9/11 is accurate (ie that 19 Arabs, trained and funded by Osama Bin Laden and his 'Al Queda' group, hijacked the four planes with boxcutters and crashed them into NY and Washington) and ask "what was on the minds of the people behind this?" After all, you certainly can't question the *sincerity* and *commitment* of the attackers. They knew they were going to die too. What makes them so?
The standard administration response has been: "they hate us because we're so great. They hate us for our freedom, they hate us for our prosperity, they hate us because we're diverse, they hate us because we're democratic."
I always thought that way of thinking was both wrong and dangerous. Firstly, it's pretty plainly wrong. Are 19 men really ready to strap on an airplane and die (as James Fallows in the Atlantic Monthly puts it) "just to keep us from voting in the Iowa primaries?". Other Western countries are democratic too. Why aren't there terrorists bombing Canada? Or Switzerland? Or Sweden? Those countries vote too, you know! They're prosperous, they're diverse, yet they don't get bombed.
This way of thinking is also dangerous because it deflects attention away from particular *actions* of the United States, and absolves the United States of any possible need, responsibility, or ability to take the greivances of the Arab world seriously. If Al Queda wants to kill everyone in the United States unless the country turns into an Islamic theocracy, then there's obviously no grounds for negotiation or understanding. They hate us and want to kill us, so we'd better kill them first.
However, I think that is highly unlikely to be true.
Friday, November 19, 2004
Name that Politician!
Pop quiz: In 1991, this Secretary of Defense said: "Once you've got Baghdad, it's not clear what you do with it. It's not clear what kind of government you would put in place of the one that's currently there now. Is it going to be a Shia regime, a Sunni regime or a Kurdish regime? Or one that tilts toward the Baathists, or one that tilts toward the Islamic fundamentalists? How much credibility is that government going to have if it's set up by the United States military when it's there? How long does the United States military have to stay to protect the people that sign on for that government, and what happens to it once we leave?"
Q: Name this Secretary of Defense.
A: Dick Cheney
Q: Name this Secretary of Defense.
A: Dick Cheney
A great blog from Iraq - "just another soldier"
I was up until 2am last night - not studying, of course - reading a blog written by a soldier who is currently serving in Iraq. It's called "Just another Soldier" and is written by a fellow named Jason. This guy is a fantastic writer - hilarious, perceptive, and offensive all at once.... this blog reminds me of "Catch 22".
Unfortunately, the stories he tells remind me of the stories I've read of Vietnam. Rumsfeld's highly-trained "superhero soldier" who can always tell friend from foe is nowhere to be found. Instead Iraq has the same scared, heavily armed kids, the same inability to tell friend from foe until (and after) the shooting starts, and the same civilians caught in the crossfire that Vietnam did. Jason candidly estimates that for every "bad guy" the US kills or captures, the US *also* kills three civilians by accident. The insurgents probably care even less about civilian casualties, but they have much less firepower, so the amount of collateral damage caused by both sides is probably about equal.
I don't think that Iraq will have the same number of American casualities as Vietnam or require the same number of troops.... the US military is much better equipped now, and the insurgents do not have large-scale external support as the VietCong did (the Americans can easily interdict large scale movements of supplies or men in a way they couldn't 35 years ago). But it's pretty clear to me after reading this blog that Iraq is going to drag on as it is now, a miserable, violence-ridden, failed state, for years to come. I expect Bush or Rumsfeld to start channeling Nixon any time now: "it's their war, and it's up to them to win it or lose it." Unfortunately, it's now *America's* war, and it will be for a long time.
Such are the results of the "faith-based presidency". Enjoy yourself, America... you've got four more years of this shit coming up.
But anyway, the blog is great. If you are anti-war when you start reading this blog, you will probably be twice as anti-war when you finish, even though the blogger himself seems to genuinely enjoy being a soldier.
I hope this guy doesn't get killed, because I'd like to read more from him.
Unfortunately, the stories he tells remind me of the stories I've read of Vietnam. Rumsfeld's highly-trained "superhero soldier" who can always tell friend from foe is nowhere to be found. Instead Iraq has the same scared, heavily armed kids, the same inability to tell friend from foe until (and after) the shooting starts, and the same civilians caught in the crossfire that Vietnam did. Jason candidly estimates that for every "bad guy" the US kills or captures, the US *also* kills three civilians by accident. The insurgents probably care even less about civilian casualties, but they have much less firepower, so the amount of collateral damage caused by both sides is probably about equal.
I don't think that Iraq will have the same number of American casualities as Vietnam or require the same number of troops.... the US military is much better equipped now, and the insurgents do not have large-scale external support as the VietCong did (the Americans can easily interdict large scale movements of supplies or men in a way they couldn't 35 years ago). But it's pretty clear to me after reading this blog that Iraq is going to drag on as it is now, a miserable, violence-ridden, failed state, for years to come. I expect Bush or Rumsfeld to start channeling Nixon any time now: "it's their war, and it's up to them to win it or lose it." Unfortunately, it's now *America's* war, and it will be for a long time.
Such are the results of the "faith-based presidency". Enjoy yourself, America... you've got four more years of this shit coming up.
But anyway, the blog is great. If you are anti-war when you start reading this blog, you will probably be twice as anti-war when you finish, even though the blogger himself seems to genuinely enjoy being a soldier.
I hope this guy doesn't get killed, because I'd like to read more from him.
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