<<Oh! You think of it as a Zero Sum Game . Hahahahahahaha!>>
Really, plane, I don't know what you are talking about. I never referred to "it" (whatever "it" may be) as a Zero Sum Game, that is strictly your language, and frankly I don't even know what the hell it means. I gave a fairly simple statement, without any reference to "Zero Sum Game," that if nobody needs dollars to buy oil any more, the demand for the dollar will fall, making the dollar a less valuable currency.
I really don't know how much more simply I can put it. It's about the most basic illustration of the law of supply and demand that anyone can make.
The relevance of "Zero Sum Games" or any other obscurantist crap you want to dredge up is a total mystery to me. If you want to pursue that line of argument, if in fact it IS a line of argument, then I am afraid you will have to explain yourself.
<<More Euros for oil cannot hurt the Dollar . . . >>
Well, as I said, and I believe stated very clearly, that we are not talking about "more Euros for oil," we are in fact talking about "ONLY euros for oil," or "ONLY euros and/or yen for oil," which would not merely "hurt" the Dollar, but would majorly fuck up the dollar, for obvious reasons which I have clearly articulated.
<< what can hurt the Dollar can't fail to also hurt the Euro.>>
Since they are clearly priced against one another and not linked in any way that I can see, I think it's painfully obvious that anything that hurts the dollar (and particularly its replacement by the euro as the denominator of all oil sales) could ONLY benefit the euro. Only if the same thing that hurt the dollar also hurt the euro could your statment be true. And in the case at hand, the use of the euro to denominate oil sales comes at the expense of the dollar, so you would see a direct case of the same action (the change in the denominating currency) at once hurting the dollar and boosting the euro.
Note that times of economic downturn for the US coincide strangely with times of economic downturn for the rest of the world . . . >>
That was then, this is now. The U.S. wasn't broke before, it was the world's only economic superpower. That's WHY the oil sales were denominated in U.S. dollars to begin with. The U.S. today is already a sick man, which is why there is talk of euros and/or yen supplanting the dollar as the world's reserve currency and the sole denominator for oil sales. Actual replacement of the dollar by the euro and/or yen to denominate international oil sales would send the dollar into a tailspin from which it would be almost impossible to recover. That might not have been the result 25 years ago, but 25 years ago, no one was even talking about replacing the dollar with euros and/or yen to denominate oil sales.
<<we help each other or cause each others problems in phase.>>
When possible, sure. When it's not absolutely self-destructive to do so. The problem you don't seem to realize is that the U.S. dollar could become a toxic asset. Since the government is so heavily in debt, IMHO due in large part to the ruinous long-term parasitism of the military-industrial complex bleeding the country for "defense" against imaginary threats from Viet Nam or Saddam Hussein or deliberately provoked threats from the U.S.S.R. or China, the only solution available is to further debase the currency by printing more of it, paying off 2010 debts with 2012 dollars and thereby reducing the value of whatever dollar obligations are held by your creditor nations. They're already in deep enough, as they are belatedly coming to realize and as even the dumbest fucking Arab on the planet is starting to wonder, do they really need any more dollars for their oil or would they rather have euros?
<<When the Mexican Economy tanked a few years ago , the US assisted to its recovery>>
Yeah, like they really needed an impoverished failed state on their border. They're paying the Mexican government to repress the Mexican population so the U.S. Army won't have to go there and do it themselves. Whatever their reasons for bailing out Mexico, you'll have to show me exactly how those reasons or the underlying logic will protect the U.S. dollar from the huge drop in demand that would result if nobody needed it any more to buy oil.
I'm talking about a very simple situation, plane - - oil sellers won't take dollars and want euros instead. The effect on the dollar should be self-evident. It is NOT rocket science. Why on earth you want to drag an alleged Mexican bail-out into this is again a total mystery to me. One has absolutely nothing to do with the other.
<< . . . prosperity there is good for prosperity here. >>
Are you NUTS? How could prosperity in Mexico possibly be good for the U.S.A.? If you didn't have a mass of hungry, ill-fed, desperate peasants in Mexico, who the fuck would pick America's crops? Where would the people of California find their gardeners and hair stylists and cooks and drivers? How could American workers' jobs be exported to Mexico if the workers there had the same rights and the same union power and the same enforceable health and safety standards as American workers and how could Wal-Mart and other big-box stores find cheap crap for re-sale to the American consumer if they had to pay the same for Third World product as American product? Where do you think so much of your affordable agricultural produce really comes from? That was the most ridiculous statement you've made in a whole unbroken stream of ridiculous statements.
<<If it were a zero sum game we should celebrate the weakness of other currencys.>>
plane . . . any American who has an understanding of foreign exchange above that of the average squirrel DOES celebrate the weakness of other currencies.
<<How much are we benefiting from Zimbabwei's currency being unsound? Wo benefits from that at all?>>
Well, first you have to look at the net balance of trade between yourselves and Zimbabwe. Are you net exporters or importers in your trade with them? If you are net exporters to Zimbabwe, a drop in their currency makes it harder for them to purchase American goods, while it becomes easier for you to buy their stuff. The harm to your export industry is greater than the benefit to your import industry, so you are hurt by the drop more than you benefit from it. If you are net importers from Zimbabwe, the drop in their currency is a distinct benefit to you, now you can buy more of their stuff for the same price as before, or the same amount of their stuff for a lower price. At the same time, that benefit to your importers is somewhat off-set by the harm to your exporters, as it becomes more difficult for Zimbabweans to buy American. If they spend the same amount as they did before on U.S. goods, the amount of goods they can buy from the U.S. will be lower than before.
<<When Japans economy suffered a slowdown it affected us negatively not positively.>>
Same story as before. You really are dragging in a whole bunch of irrelevant economic history that has nothing to do with the loss of a country's currency's status as an international reserve currency. Japan's economy and it's relation to the US economy at any particular point in history is totally irrelevant.
<<Do you remember the years of grain shortage in the Soviet Union in the late seventys?
<<Didn't they borrow money from Germany (west) and buy grain at well negotiated rates?
<<Did it matter what currency that was done in ?>>
Of course it does. It would have been better for the dollar had the U.S.S.R. borrowed USD from anywhere to buy wheat and worse for the dollar had they borrowed DM instead. What you don't seem to understand is that political and not purely economic factors affected who the lender was and what the currency of the loan would be. In purely economic terms, any time that a borrower chooses to borrow DM or euros when it could have chosen USD, that's a small set-back to the dollar and a gain for the currency of choice. You also don't seem to understand that there is a different order of magnitude when we are comparing the U.S.S.R.'s purchase of grain with the whole world's purchases of oil. One would have a relatively tiny effect on the dollar, the other would have a huge effect on the dollar.
<<The Soviets used to controll their currency so tightly that the stuff was useless outside thair borders , pretty soon it was useless within their borders as well , they could not escape the laws of economics by ignoreing them.>>
Well, it's obvious to me that you are choosing to ignore the most basic economic law of all, the law of supply and demand, when you make the ridiculous argument that the U.S. dollar would not be hurt if it were supplanted by the euro and/or other currencies as the currency of payment for all sales of oil. That is just nonsense.
