Sun 11 Oct 2009
Max Keiser on oil trade’s dollar dump
Posted by Prieur du Plessis under Investment, Markets, Money
Max Keiser, international journalist, provocateur and ex-stockbroker, was interviewed on Tuesday by the Russia Today television network on the oil trade’s so-called “US dollar dump” (courtesy of GATA). He reported that he was hearing from his sources in Paris and the Middle East that there was substance to the widely publicized article by Robert Fisk (The Independent) about worldwide collaboration to replace the US dollar as the medium of exchange for oil trading.
Keiser added that gold was to have a much larger role in the basket of currencies likely to be created to replace the dollar and said China, Russia and other countries moving to shift from dependence on the dollar were tired of funding US wars and occupations.
Source: Chris Powell, GATA, October 7, 2009.
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October 11th, 2009 at 1:24 pm[...] video from sharp-and-fun-mind Max [...]
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October 11th, 2009 at 1:50 pm
Well my first take on this guy is that he is unstable, possibly a bit of a nutter, so I take what I hear with a grain of salt.
October 11th, 2009 at 4:10 pm
Max Keiser is entertaining, but his logic is flawed.
1) He claims US needs wars to drive the economy. Per the CBO, defense budget FY08 was $595B with ‘09 slightly higher. This is comparable to SS of $600B or 4% GDP each. Healthcare spending dwarfs military spending.
2) Obama is accused of being a puppet to the US war machine. If anything, he is more influenced by pacifists in his political base and would rather curtail this to shift to more social programs. He has committed to scaling down next year, but the timeline is similar to what Bush had already planned.
A more plausible explanation of US constant involvement in Middle East is fear over oil supplies, as US has become increasingly dependent on cheap imported oil due to a long standing failure to address this imbalance.
Nevertheless, Keiser is correct that US deficit spending is excessive and invites failure of the currency if uncorrected, which I am not hopeful will be achieved before forced by a crisis.
October 11th, 2009 at 5:05 pm
Comments from Paul Sandison:
*Ahem*! Am I missing a trick here? Bernanke is taking down the value of the dollar by more T-Bill sales. The depreciation of the dollar is already 30%. That will make US exports cheaper and more saleable, and imports more expensive which will stimulate internal US manufacturing industry again. This is classic Keynesian economic policy successfully used e.g. by Sweden in the early 1930s, and Keynesians are presently in the saddle in the US government. So this is to be expected. It is a normal measure used by indebted governments in a recession. When the currency goes up in value again after exports have been boosted and inernational manufacuturing is booming again, then they can pay down the foreign debt.
Everyone knows the rest of the world is tired of financing US (and UK) largesse, deficit financing and criminal bubble activities, etc. In itself, a new global currency including gold is an excellent idea for stabilising the international monetary system which has been out of control since the US abandoned Bretton Woods to pay for the Vietnam war and several other wars.
So this is really old stuff, but I am wondering why Keiser is saying it out loud.
Instead of the transition going smoothly, it might just go in a big bang. Then anything might happen. The rest of the world is not going to be helped by a sudden collapse and forced transition now, and although it would be very dire for a while, the US might actually come out of the recession faster and and in better shape. I mean a really painful recession could be even shorter and therefore more advantageous than the present slow death. By implementing the new world currency now, are the US creditors trying to collapse the US economy in order to save it? That would mean they now know best what is right for the US. That would not be a ‘new normal’, but a ‘new reversal’.
Or is it a way of making sure that the dollar is not part of the future basket? Now that would be purgatory. I didn’t know that the US main creditors were believers in that! I thought they were Buddhist or Confucian, Hindi or Muslim. I thought that purgatory was stopped after the disastrous effects of the reparations that Germany was forced to pay after the First World War and which ultimately led to the rise of Herr Hitler.
I would like to hear others’ views on how the US as well as other parts of the world would fare on a sudden collapse of the dollar on a de facto sudden switch to a new world currency.