To de-peg world oil prices from the dollar in favor of the Euro?

6/24/2008 4:39:17 PM

no, it's time to seek a better means of powering our industry. oil is so ancient it's not even funny.

it's also time to either a) get our asses out of hte middle east or b) man up and take over completely so we can have our oil

[Edited on June 24, 2008 at 4:42 PM. Reason : jank]

6/24/2008 4:41:46 PM

Maybe I'm missing something big, but I don't see how it matters what currency oil is traded in.

6/24/2008 4:43:05 PM

or c) depeg the dollar from oil in favor of a currency with more stability

The decline of the dollar has pushed the price of oil up worldwide as a hedge for inflationary pressures. A more stable currency in theory would prevent a self reinforcing loop of people piling into oil futures as a hedge against a declining dollar, which in turn increases the price of oil and adds to inflation and so on.

[Edited on June 24, 2008 at 4:46 PM. Reason : .]

6/24/2008 4:44:14 PM

Wouldn't people still use oil futures as a hedge if it were priced in Euros?

6/24/2008 4:48:58 PM

Quote :

"c) depeg the dollar from oil in favor of a currency with more stability"

short-term solution.

you realize the economy goes through what are called cycles. this happens no matter what. get over it, it's not the dollar's fault

6/24/2008 4:54:12 PM

Quote :

"Wouldn't people still use oil futures as a hedge if it were priced in Euros?"

Yes they would. De-pegging would have little to no impact upon anything, since there is no actual peg to drop, other than confusing lots of people.

[Edited on June 24, 2008 at 5:53 PM. Reason : .,.]

6/24/2008 5:52:49 PM

Quote :

"you realize the economy goes through what are called cycles. "

Yes, but perhaps it should be traded in a currency that is not likely to go through such wild fluctuations and cause crises. The Euro is the currency of a multinational entity such that fights inflationary pressures (one country can't just print a lot of money to stimulate economy) and is more insulated to world events and short term sentiment.

http://fx.sauder.ubc.ca/euro/

check out "pros and cons"

[Edited on June 24, 2008 at 6:11 PM. Reason : .]

6/24/2008 6:09:38 PM

Quote :

"b) man up and take over completely so we can have our oil"

So Hitler, Stalin, Mussolini, Suharto, Osama, etc., "manned up" when they committed genocide? That's the meaning of "manning up", taking over people's land and subjugating them?

6/24/2008 6:46:39 PM

While the increase in oil prices has been greater in dollar terms, the bulk of the movement cannot be attributed to dollar weakness.

http://www.econbrowser.com/archives/2008/06/oil_prices_in_o.html


Regarding the Euro, we shouldn't forget that the relative age of the Euro is still quite young. The ECB has yet to be tested with a severe recession, which could be problematic if the state of the constituent economies are in very different conditions. For instance, France and Italy could be in outright recession whilst Germany remain vibrant. An outcome like this would increase the implied volatility of the Euro.

I think once we see interest rate differentials converge again, the USD will gain back it's status. Regardless, the Euro must first be tested before it can serve as a credible peg.

[Edited on June 24, 2008 at 7:44 PM. Reason : .]

6/24/2008 7:40:49 PM

we will never be completely off oil in our life times, too much dtuff is made out of it

6/24/2008 9:26:13 PM

still... better to be etuff.

6/25/2008 12:16:15 AM

Iran thinks so...

6/25/2008 1:16:30 AM

Quote :

"So Hitler, Stalin, Mussolini, Suharto, Osama, etc., "manned up" when they committed genocide? That's the meaning of "manning up", taking over people's land and subjugating them? "

I didn't realize taking over one's country necessitated genocide

6/25/2008 6:11:02 AM