I don't have any factoids to support this, but I'd guess that maybe half of the oil exported on this planet is sold in US$.

For example, the USA being the world's largest consumer of oil, must pay in Cdn$ or Mexican pesos to buy oil.

And I don't think the Germans or French pay US$ to pay for Russian oil/gas (for example).

Indeed, the largest corporate monster oil companies control less than 25% of the world's oil market. The largest and most powerful oil companies are state owned enterprises in Saudi, Iran, Russia, Nigeria, etc.

All major oil producers price oil in US Dollars and accept payment in US dollars.
This requires large amounts of US dollars being held by non-US banks and by central banks as a reserve currency to settle these transactions.
Switching to the Euro would force these banks to dump the dollars and buy up Euros to use as a reserve, this would put upward pressure on the Euro and downward pressure on the dollar.

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“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

No, only prices are cited in USD for comparison purposes (West Texas Brent or Light Crude taken as the pricing standard).

But the fact is, the USA must convert to Cdn$ to buy Canadian oil. That is a fact. The price may be agree in USD terms, but the payment is in Cdn.

You cannot tell me that Germany pays USD to Russia for oil/gas. That is absurd.

If you are looking for the 'big game' that hurts the USD and helps the Euro, you should be looking at the issue of currency reserves held by Central Banks - that has much greater effect (and bigger numbers) than oil purchases.

And yes, China and Japan (who hold the largest USD reserves in the world) have indicated they intend to diversify by holding at least 50% Euros instead of 100% USD. These shifts have already eliminated the USD 'currency of record' premium that previously existed on the USD. This is the reason that the USD was so over valued for so long - and why the USD has fallen steadily since the intro of the Euro.

USA's getting themselves caught up in the quagmire of Iraq has also put strong downward pressure on the USD.

The euro actually fell rather heavily against teh dollar when it was first introduced. Most of the Euros gains in the past 4 years or so have been simply recovering all those initial loses. The Euro is actually only trading at about a 8 cent premium to what is was when it first started trading.

http://charts3.barchart.com/chart.as...=BSTK&evnt=adv


Most of the euro gain's i beleive are the product of negative sentiment towards the US and its current administration. The central banks didn't initiate their policies of reducing their dollar holdings till more recently - I think primarily do to alot of accusations of countries like China and Japan holding lots of dollars to depress their currencies against the dollar to support their exports to the US.

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"Liberty is not a means to a higher political end. It is itself the highest political end - Liberty is the only object which benefits all alike, and provokes no sincere opposition - The danger is not that a particular class is unfit to govern. Every class is unfit to govern. - Power tends to corrupt, and absolute power corrupts absolutely." - Lord Action

Sorry Wiki quote but the facts pan out. While the big producers deal in dollars everyone needs them especially Europe and China. Russia has it's own oil and there is a petroruble market as the is a canadian market.

Iran is trying to setup a Euro market at much discust to OPEC except venezula.

By national debt I believe they mean capital flows. China and Japan produce cheap goods which causes a trade imbalance between imports and exports.
China and Japan are rivals btw and Japans policy is to keep the Yen devalued as until China reevaulates the Yuan. The US meanwhile is dependent on importing resources especially crude oil and causes inflation. The housing bubble will likely cause a deep recession in 2007 in the US and will likely affect it's trade partners like Canada.

The don't have the bond structure. The US is still a mega industrial powerhouse and it will depend on the turn of events. I see the biggest issue being crude oil / energy cost and of course how the idiots in Washington spend money.

Yes it's about oil. I believe most major commodities are denominated in Greenbacks. If the US was the exporter of crude this would work out quite well.

Don't forget United Kindom..

I think I'm missing something here lads..

I don't know if that's true about prices being cited only in USD but it seems to make sense from what you've stated. Do you have any source or article to help learn more about this or bring to light.

OPEC transactions are completed in USD.. According to your arguement it should not make a bit of difference to switch from USD to Euros as a currency peg.

An immediate answer. NO. because the financial world would not allow it to happen, they would prop us up until we we were all in the same boat, and then the word bankruptcy would have no meaning. Money is just a way of keeping score. However a great number of Citizens will go bankrupt as a result.

While the Eurozone has a equal to or greater dept level it's economic potential is getting better while the US has been faltering. Take for example all the cost cuting going on by corporations in the US. Meanwhile in Eurozone the economy is exceeding expectations and remaining strong. Although a slowdown in the US would also hurt the Eurozone the current slowdown has not had an effect.

As far as China goes growth restrictions for expansion by the government limit it's growth potential. India has mega problems so many it would be an endless topic.
As far as growth potential goes of course growing nations have more growth potential than developed nations.

Bankrupt no but as far as investors are concerned they will keep institutional money where it can grow or is safest from loss or default.

I am willing to put up any amount you want betting that over the next ten years US economic growth substantially outpaces Eurozone growth.

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"It's a good feeling to shoot a bad guy. Something you democrats would never understand. Americans are homesteaders, we want a safe home, keep the money we make, and shoot bad guys!"

----Denny Crane