What would happen if OPEC switches from the dollar...?

[kentuck]

..to the Euro? Iran and Venezuela have let it be known that is their desire. OPEC is now in seesion at its annual meeting and Ahmedinejad of Iran called the dollar a "worthless piece of paper". How serious is this threat?

Of course, the media and the White House would want to keep this story as low-key as possible. They would not want to frighten investors or American consumers. We are already on the verge of a recession if we are not already there.

But it seems the debt to China and the huge deficits of the last 6 years are finally taking its toll. Dick Cheney was wrong. Deficits do matter. Of course, when the dollar is worth fifty cents, then we will only have to pay off half of what we borrowed. But then, the small consumer will have to pay double for everything he buys. Does it matter?

[Rosa Luxemburg]

1. wasn't Saddam Hussein wanting to go to Euros?

[CK_John]

2. * will start yelling, you can't handle the dollar. n/t

[MaineDem]

3. To be honest, I thought they already had.

I thought they were now trading with Euros.

I could very well be wrong.
:shrug:

[PDJane]

4. Yeah, it matters.

It matters because when the US goes down, the economic engine stalls and goes into a tailspin for the whole damn world.

It has a few beneficial side effects for the folks who steered the crash; the very rich who manage to own most of the world get very much richer. However, the rest of us get poorer and find it harder to live. If totalitarianism is the aim of the government, there are some very good excuses to put it in place, if the population doesn't get supremely pissed off and rebel first. (I do believe, by the way, that is what the new "pain" weapons are about.) It's an excuse for perpetual war, which means a very few get and remain wealthy. That the rest of the US will have to pay for it in perpetuity is a drawback, but the guys at the top get to have an orgy of control until their ouster.

There will be a lot of starvation and a lot of difficulty in the world at large. Europe is likely to come off better than most places, because of a more conservative (as in conserving) lifestyle in general. Africa is going to be a hellhole for years to come, as is the middle east, and Israel's nukes aren't likely to save it.

It needs an intervention, and that quickly, but this lot aren't going there.

[Bitwit1234]

5. Well Fox is trying to pin the gasoline rise on Nancy Pelosi and the Democrats

don't you think they are going to do this also....

[jwirr]

6. It would seem to me that there should be a qualifier in that chainey

statement. A deficit that is run up improving our own country is one thing, one run up fighting useless wars or creating useless military hardware is another. If you spend money on our infrastructure: roads, water projects, education, etc. you have something of use to show for the expenditure. What have we gotten for the money *ss has spent on his wars?

[Bitwit1234]

7. But one thing....imports will have to stop because

all the cheap goods will be higher than goods made in the USA> And the companies who stole overseas will not be able to unload their cheap goods here. That would be the only thing in this somber market.

[Didereaux]

8. What would happen? In the short run OPEC makes more $$$ n/t

[MadHound]

9. It would mean that our economy would crash.

Hyperinflation, the dollar would devalue at least 20-40%, foreign investment would flee these shores, there'd surely be a run on the banks much like the 1930s, the current account deficit would become unservicable, the budget deficit would go into default, etc. This would set off a huge snowball effect, as China would be forced to start dumping dollars, as would other countries. This could very well lead to a world wide recession, and a US depression that would make the 1930's look like the roaring twenties.

Kevin Phillips goes into a much better, and much more detailed explanation of these consequences in his book "American Theocracy".

[kentuck]

10. No doubt, it would be very bad news..

It would be the depressed Americans against the credit card companies and the banks. Class war, anyone?

[CyberPieHole]

11. The dollar has been sliding for 2 years now...the shift would have serious repercussions

worldwide. The devalued dollar would be evidenced by higher prices on imports in the U.S. Everything would go up. Expats would find their dollar worth less and less and perhaps some might have to start looking for cheaper countries in which to live. It would put the final nail in the coffin of the already collapsing real estate market...the results would be catastrophic.