[CrashList] economic consequences of the strong dollar and oil prices (was: 2nd reply to Julien)
jones118 at lineone.net
Thu Sep 28 04:29:22 MDT 2000
> whatever happens the prices in
> economies would rise as the result of arbitrage when the
> dollar rises.
What about seignorage? Being banker/lender of last resort gives the US
the ability to devalue/revalue the dollar without paying the customary
price other national currencies do: so arbitrage is always on their
> 1 - I don't think it's relevant. Hoarded money doesn't have
> much influence on
> real economies
But it's nice for the US which can print money, buy things, and know
that some at least of this money will simply never be used, will sit
under beds and the net effect is that a portion of US imports is
cost-free (ie, is plunder or an imperial tax on the rest of the
> If the oil price has not been the product of a market, so
> what? Many prices are
> not the product of an unrigged market. How can the nature
> of the market and
> not the price of the commodity be the cause of poverty,
> inequality, etc.?
I'm saying that oil prices are not just artifical, they are a special
case of monopoly and that, as Simon Bromley argues in 'American
Hegemony and world Oil ' (Polity Press, 1992), oil is the single key
commodity around control of which US hegemony is actually organised.
> >> Anyway, all these problems are the results of policies as
> >> much as if not more than energy availability. F.ex., how
> do you explain
> >> Algeria with your theories?
> Algeria is a mess but it has plentiful energy. Not so long
> ago this country
> exported no fossil fuel and was probably in a better state
> then and in some
> time it will probably export none again. If it's the low
> prices which caused it's
> problems one wonders how it will even survive when their
> oil will run out. But
> compare this country with neighboring countries afflicted
> by zero fossil fuel
> exports which do nevertheless survive. There seems to be an
> issue about
> how it uses the rent, isn't it? You see my point?
Yes, I do: resource-poor countries often do well (Japan) and
resource-rich countries (Congo, Russia) do badly.
> I mean: the interest rate on the debt of the Malaysian
> government is close to
> the one on the debt of most western governments. This is
> not indicative of
> financial weakness (in the contrary). As to Thailand and HK
> I don't know but
> they are certainly lots of countries in the region which
> don't enjoy the stability of
> Malaysia despite having the same "energy profile" a
> Malaysia. As to Japan,
> it's debt has a abnormaly low interest rate which is not
> exactly a sign of
> extreme financial stability but rather the consequence of a
> governmental fiat. In
> other words the Japanese debt market is rigged and not dependent on
> foreign capital. Krugman and Keynes would say it's the
> consequence of a
> "liquidity trap". Hope that answers your vague question.
Don't know enough about Malaysia to comment.
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