Thursday, October 8, 2009

Rough Terrain Ahead (AKA We're in Deep Shit Now)

This is a must-read article from Robert Fisk of the Independent.
In it, he describes a not-so-covert plan by the Gulf Arab states, the Chinese, Russians, and other nations to switch from using dollar as the international currency in which to buy oil to a "basket" of currencies including the Chinese Yuan, the Euro, and gold.

One of the main reasons why it costs a lot less to fill your gas tank in this country than in others, is that our currency, the dollar, is the currency for oil. Other countries must trade in their currency for ours so that they can buy oil. Hence, they pay more at the pump. Once the dollar is depegged as the world currency for oil, it will cost a lot more for oil and driving fuel in this country. The dollar will dive in value; I think a good investment for the future would be a wheelbarrel.

But hyperinflation could well be the lesser of our problems. The only way we would be able to get access to what's left of Middle Eastern oil is to take it by force. If there is a scenario where WWIII could stand a good chance of happening, this would probably be it. After all, Fisk ends his article by stating last month's news that Iran would sell its oil in Euros rather than Dollars, and what was the last nation ballsy enough to do that? Iraq, which was almost immediately invaded by the U.S.

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