As we’ve discussed so many times before, the dollar is falling and may not make it. It’s more than a passing concern. Our American Empire is unsustainable with a unbacked paper currency. How good is our “legal tender for all debts, public and private”? Is the paper our government print on all that valuable?
Apparently not!
If our oil partners and producers in the middle east have lost confidence in our dollar, then what will happen to our economy? Our dollar falling in value against the Euro may subject us to incredibly high prices. Consider this, our dollar is now worth 50% of the British Pound and had fallen to .68 to the Euro. If our dollar loses additional ground, our price per barrel of oil might double. Not only from our falling dollar, but from tightening the supply contributing to rising price. Can you say $140.00 per barrel in the next few months? Will it go to $200 / barrel?
RIYADH, Saudi Arabia (AP) — Iranian President Mahmoud Ahmadinejad said Sunday that OPEC’s members have expressed interest in converting their cash reserves into a currency other than the depreciating U.S. dollar, which he called a “worthless piece of paper.”
His comments at the end of a rare summit of OPEC heads of state exposed fissures within the 13-member cartel — especially after U.S. ally Saudi Arabia was reluctant to mention concerns about the falling dollar in the summit’s final declaration.
The hardline Iranian leader’s comments also highlighted the growing challenge that Saudi Arabia, the world’s largest oil producer, faces from Iran and its ally Venezuela within the Organization of Petroleum Exporting Countries.
“They get our oil and give us a worthless piece of paper,” Ahmadinejad told reporters after the close of the summit in the Saudi capital of Riyadh. He blamed U.S. President George W. Bush’s policies for the decline of the dollar and its negative effect on other countries.
Oil is priced in U.S. dollars on the world market, and the currency’s depreciation has concerned oil producers because it has contributed to rising crude prices and has eroded the value of their dollar reserves.
“All participating leaders showed an interest in changing their hard currency reserves to a credible hard currency,” Ahmadinejad said. “Some said producing countries should designate a single hard currency aside from the U.S. dollar … to form the basis of our oil trade.”
Venezuelan President Hugo Chavez echoed this sentiment Sunday on the sidelines of the summit, saying “the empire of the dollar has to end.”
“Don’t you see how the dollar has been in free-fall without a parachute?” Chavez said, calling the euro a better option.
… Hang on to your hats boys, this is going to be a rough ride..
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