Re: Putin: Russia to price oil in Euros

["David Schanoes" <Schanoes@xxxxxxx>]

Nestor is correct-- Argentina is the 4th largest exporter of oil, and
exports a net of app. 400,000 bbl/day.  Production has fallen, but
consumption has declined also, so net exports still remain in the
400,000 range.

However, the impact on the oil importers will be dramatic-- as will the
impact on the total world economy.

Nixon was no Marxist indeed, and he didn't care about the "material"
backup for the dollar-- he cancelled convertibility to gold  without
regard for the devaluing of the dollars held by other governments.

At various times in the post OPEC 1 period, I think the dollar was not
the single vehicle for such trade.  Oil traded against a currency
basket.  Some loans where denominated in special drawing rights.

To say that US purchases are 99.5%  for free requires a bit more
explanation than Nestor provides.  The exchange of the dollar for
commodities is not predicated on the actual cost of production of the
note or the coin.  Nestor's argument that without oil under its shoes,
the dollar loses weight will probably prove correct. This loss like the
shift in currencies is representative of the predicament of the
capitalist world economy and the dearth of profits.   But the support of
oil is not the determining factor.  For currencies, convertibility is
the key, and the impact on convertibility will be universally felt, and
not confined to the United States.

The impact of Euro conversion will amount to a 20% increase in the
price of oil, which will have the affect of transferring profits to the
oil companies as the rest of the economy, and economies, tumble into
recession/depression.

dms





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