From: Technotranscendence (neptune@mars.superlink.net)
Date: Sun Apr 07 2002 - 08:53:40 MDT
On Sunday, April 07, 2002 9:52 AM Amara Graps amara@amara.com wrote:
>>BTW, as a general fact or factoid, I've read that the US only gets
about
>>10% or 15% of its oil from the Middle East. This is hardly a big
>>dependency.
>
> Yet, the Arab Emirates peg their crude oil prices to the dollar.
Non-sequitir. The US dependency on the Middle East oil being very low
does not imply that no nation there will peg its rate to the dollar. To
use another example, Argentina was pegged to the dollar until
recently -- and that wasn't because the US imports 80% of its oil from
there. Does anyone here think that the US economy depends -- or
depended -- heavily on Argentina's? If Argentina disappeared today
would the US economy fall apart tomorrow or next week or next year
because of it?
In fact, pegging to a foreign currency probably has less to do with
import/export and more to do with internal politics. I believe
Argentina did the dollar peg at the time to thwart inflation -- big
surprise, it didn't work, but results don't tell us everything about
intentions and vice versa -- and to keep up confidence in its currency
and markets with foreigners. (As you know, I champion getting
government out of the money supply and banking business all together.
This would definitely make for a money system that self-corrects --
rather than one that's driven by politics.)
I don't know enough about the UAE to say and it's only a de facto peg.
The US, after all, still has the biggest and most influential economy on
the planet, so even a de facto peg is not a surprise. (I'm not stating
this out of some hypertrophied patriotism. It's a fact, though I wish
other economies would grow faster so that there was less influence from
Washington, the Fed, and the IMF around the globe.)
Cheers!
Dan
http://uweb.superlink.net/neptune/
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