Oil Producers Shunning Dollars Shifting To Euros

[Jcrowley]

Oil producers shun dollar
By Haig Simonian in Zurich and Javier Blas and Carola Hoyos in London
Published: December 10 2006 20:11 | Last updated: December 10 2006 20:11

Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements.

The revelation in the latest BIS quarterly review, published on Monday, confirms market speculation about a move out of dollars and could put new pressure on the ailing US currency.

Market liquidity is traditionally low in December, and many traders have locked in profits, potentially reinforcing volatility.

Russia and the members of the Organisation of the Petroleum Exporting Countries, the oil cartel, cut their dollar holdings from 67 per cent in the first quarter to 65 per cent in the second.

http://www.ft.com/cms/s/277471c2-8889-11db-b485-0000779e2340.html

[rolfboy]

1. This is important, VERY! a big K&R

The mess that dear ol' GW has made of the American economy is so far reaching that it boggles the mind.

Recently, a friend told me of an article in the Economist, where corporations have so much cash lying around, that they are buying back their stock. This means that the executives are no longer accountable to stockholders. they can continue to run their businesses as they wish, taking large salaries, large bonuses, shipping US jobs overseas, etc. in some ways the end of the stock market, and the return to the Robber Barons of old.

The article you posted is equally as bad: a low dollar means increased imports (as they are cheap), less US jobs, less buying, more recession...just in time for a democratic-controlled Congress, and a "supposedly" lame-duck Prez.

The shit has really just started to hit our fan.

with smiles, and a big K&R to everyone to read this article.
Robert

[Blackhatjack]

2. Just Wait Til The Next Set Of Economic Reports Hit ....

It takes at least a 'quarter' to document data showing a shift in the economy, but there are signs all around that foreshadow a particularly bad economic report in the offing.

In case you have not noticed, prices have been steadily increasing at grocery stores. Walmart announces worst Holiday shopping season since Bush took office. Our 'creditor' nations holding dollars are 'dumping' their reserves, and moving into Euros --which is at an all-time high against the Dollar. The housing inventory is largest since 1993, and existing housing orders will be fulfilled in next 90 days-- which will invariably lead to housing construction layoffs, cuts in profits for companies that depend on housing construction, and downturns in housing prices. Home equity loans will disappear for many people as their equity 'shrinks.' Adjustable rate mortages will reset, raising payments for working people. Onerous credit card changes have already been implemented, and the new Bankruptcy law will make sure people are financially enslaved to them for years rather than getting a fresh start.

The lies and deceptions that have been constructed to instill the "all is well" facade, will come crashing down by the first of the year --just as Democrats take over majority control of Congress.

Hate to be a pessimist during the holiday season, but folks need to be prepared for the financial wave that is about to break over their head.

[bigbrother05]

3. Traditionally a lower dollar increases exports

but with the way they have off-shored US manufacturing, that is now questionable. What I fear it means is increasing costs for everyone without an offsetting increase in demand for US goods abroad. If we don't have anything other countries want, we won't be able to sell them at any price. The major US exports will likely be food stuffs and US branded tech products that are mostly foreign parts in a USA box.

[TahitiNut]

12. When we have insufficient products and services for export, dollars buy assets.

Rockefeller Center ... Pebble Beach ... Port of Baltimore ... what's next? Yosemite?

[Strelnikov_]

14. And, We Are Sending $750 M/dy Away With $60/bbl Petroleum

Or about $274 B/yr.

And their answer to the coming natural gas crises is to import LNG.


Yea, we're sustainable.

[Joe Chi Minh]

16. As a character in one of our TV series said of Thatcher (it was when she was PM):

"She's turned Britain into a vast shanty town of hamburger stalls".

Little did he know that her most devoted acolyte, one Anthony Blair, was to turn the process into an art form.

[ljm2002]

4. "a low dollar means"...

..."increased imports (as they are cheap)" ...

Not my understanding. A low dollar makes our stuff relatively cheaper, so we would be able to export more, thus helping the trade deficit. It also makes "their" stuff relatively more expensive, so fewer imports, and the imports are relatively more expensive.

[Bandit]

5. a low dollar means increased imports (as they are cheap),

The exact opposite is true. as the dollar shrinks the cost goes up. ie it takes more dollars to buy the same amount of goods.

[dapper]

15. Imports/Exports

Depending on how the currency relates to the US Dollar. If the US Dollar goes down, Imports will cost us more and Exports will cost the other country less.

That's based on our currency going down while another country's currency going higher. China? is pegged to the dollar so you probably won't see much difference there.

It may sound silly to some but I try to buy USA products as much as I can. It gets tough as most everything is made everywhere else. I'd rather have my money stay in my country.

Dapper

[itsmesgd]

6. Follow their lead.

Buy Euros before the dollar is not worth the paper that they are printed on....wait they already are devalued and printed at the whim of the federal reserve.

[nam78_two]

7. K&R.nt

[Bozita]

8. fifth recommend needed

[itsmesgd]

9. kick, rec.

[Pharaoh]

10. K&R

This could be it folks.

Everything Bush touches turns to shit

What a fucking MORON!!!:spank:

[trof]

11. This is NOT good.

Some oil producing countries have threatened this for a while.
Pre-invasion Iraq, for one.
Gee, maybe THAT'S the reason we...?

If the world oil producers convert to euros, that means the U.S. oil companies will have to buy euros in order to buy oil. That'll mean big increases at the pump in terms of dollars.

Speaking of euros, what backs their value?
The 'full faith and credit' of something or other?
That's what 'backs' the dollar.
"The full faith and credit of the United States government."
What, exactly is THAT worth in today's market?
My guess would be not nearly as much as it might have been worth oh...say...6 years ago?
:-(

[doublethink]

13. More food for thought ......

Tehran Times: Iran Has Started Substituting Euros for Dollars in Oil Sales (Dec 8 2006)
http://www.digitaljournal.com/article/69374/Tehran_Times_Iran_Has_Started_Substituting_Euros_for_Dollars_in_Oil_Sales

Iran Begins Shift from Petrodollar to Petroeuro
http://www.aztlanelectronicnews.net/content/view/72/2/ (Dec 8 2006)

Petrodollar Warfare (Wikipidiea)
http://en.wikipedia.org/wiki/Petrodollar_warfare


Petrodollar Warfare? Iranian Oil Bourse? ..... tick tick tick tick .... I duh know? :shrug: Time will tell. Peace.

[Javaman]

17. it will be interesting to see what china, japan and south korea do...

since they hold the lion share of our debt.

To quote Billy Preston, "nothing from nothing leaves nothing".

[nadinbrzezinski]

18. At times I feel like we are watching a

slow moving train wreck

[GenDem]

19. This is very bad news.