Re: [TNF] Re: Two Different Wolfs - Euro/$ Issue

["Gary Santos" <evs@xxxxxxxxxxxx>]

Some months ago, I brought up the Euro for oil issue and got a response,
which made much sense (from either Henry or Warren), that pricing oil in
Euro (via the Arab dinar or via the Euro directly or via the Mahathir dinar)
would result in an overvalued Euro. Now, the argument went, an overvalued
Euro would be as undesired as Japan would want a rising Yen as it makes
Japanese products uncompetitive in the export market. The US got away with a
strong dollar because many countries export to it.

But, I continue to wonder about the issue. Will Arab pride come into the
picture? Will French, Russian and German anger come into the picture? Can
the US determine the price of oil not by the strong dollar but by
production? There are so many attendant issues aside from the exchange rate.
Inflation. The effect on the dollar because of the fiscal deficit.


----- Original Message -----
From: "Hugh Whinfrey" <hugh@xxxxxxxxxxxx>


Well, my focus here in Europe isn't so much Israel and whether
the folks running the show in the US ultimately are friends or foes
of Israel. In many senses I think Israel is merely a sideshow whose
ego won't let it accept that it is not the centre of the world.
We figure Europe is the centre of the world here. Rather, we know
it is. Anyway, Israel is not in the driver's seat vis a vis Europe's acting
in its own self-interest - Europe puts Europe first, and it's
simply inappropriate to expect anyone else to call those shots.

There is an old baseball-related expression that says "keep your
eye on the ball" if you want to take a swing at it and hit it. Doing
that here, as far as I can tell, means watching the Euro vs. the
dollar game, with the complications offered by gold and oil, and
not letting all the hot air and rhetoric of the massive propaganda
campaign out there aimed primarily at English-speakers distract
from the fundamentals of the game.

There is an important 'summit' this weekend. A new alliance
has been formed - Russia, Germany and France. (I'll even
mention that I've stated that this was coming if you go back
through my postings over the last 5 years or so.). NATO is
falling apart, it's already a dead duck in that the major parties
in the arrangement will not be able to work together at least
until there is a regime change in the US. They in fact may never
be able to completely trust the US again, which is the direct
cost of all the unilateralism. It took generations to bulid up that
trust based on the mechanism of international law. Anyway, so
it's time for the next move in this great chess game. One of
the great question marks is whether OPEC and/or the Arab
world will side with the US or with the Europeans in this dispute.
And in particular, if they side with the US, the issue of precisely
what the chain is that is being yanked to make it so is what to
keep your eye on. The key is figuring out what that chain is, as I
see it. When it breaks, the US will have fallen into the abyss.

Wolfowitz is flicking a lit match at this alliance by suggesting
that they wipe their Iraqi debt off their books. The open question,
and this is also where to keep your eye on the ball, is the extent to
which that match will light something that will blow Wolfie Dearest
straight out the boardroom window. Playing with fire can be dangerous,
i.e.pulling the plug on the dollar is the obvious response. In fact the
world
is by and large demanding it already. So the threat to do so must
already be on the table. It may not be necessary to bring
OPEC and/or the Arab oil producers along for the ride by
having them switch to Euros for their oil, however if they
did make such a move now, it would likely be checkmate,
as the US has played and mostly lost its military card in
the past couple of weeks. I.e. if Iraq were intended to create
the myth of invincibility to forestall the plug being pulled on the
dollar, in a way analagous to the 'awe' created in the first Gulf
War, then Iraq is an unqualified defeat in that it doesn't appear
to have incited an iota of respect for the US. Quite the opposite
in fact. Actions sometimes speak louder than the evidently
desperate nature of the spin they are given. The bluffing this time
around is all too evident to those with their eye on the ball.

It's a question of 'when' not 'if' from where I'm looking at it.
The temptation to do it this weekend is probably really strong,
but I'm not convinced that the optimum point in time to do it
has arrived yet.


Hugh

PS. Sorry for all the 'mixed metaphors' in the above, but I just
love being in a position where I can torture my readers with
them and still pass the course :-)




------------------------ Yahoo! Groups Sponsor ---------------------~-->
Save Smiley. Help put Messenger back in the office.
http://us.click.yahoo.com/4PqtEC/anyFAA/i5gGAA/qkHolB/TM
---------------------------------------------------------------------~->

TNF has two guidelines designed to maintain a positive tone.

(1) If you take offense at another member's message, write to that person
privately; if you think the moderators should be informed, CC your private
message to thenewforum-owner@xxxxxxxxxxxxxxxx

(2) Avoid on-list meta-discussions or co-moderation; address such matters to
the individuals involved and/or to the moderators.



Address to unsubscribe: TheNewForum-unsubscribe@xxxxxxxxxxxxxxx





Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/