Reply #10: Yes, they did discuss it, and they will probably continue to discuss [View All]

[54anickel]

it at each meeting. They seemed to have based the dollar price on either the euro or a basket of currencies to maintain their buying power. They will use their ability to set production and prices rather than switch currencies for as long as it makes sense.

Here's a link that touches on the difficulties in making a switch.

http://www.eubusiness.com/afp/040209030947.7x4cldn1

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"We are speaking about negotiating for crude in euros. It is possible that the organization will discuss this and take a decision at a given moment", Silva said.

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Adopting the euro, the currency of 12 of the European Union's 15 current members, would call for a major overhaul in world oil trading, but the idea has been circulating since before its introduction in 2002.

"What's more, Russia, one of OPEC's competitors, has been threatening for several months now to switch its oil market to euros", the source said.

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A trader at the Rothschild bank in London added: "Trading in petrol involves enormous sums of money. If the dollar loses its role as a currency of reference, the United States, the world's largest oil importer, will no longer be able to have outside countries finance its abyssal trade deficit."


World confidence in the greenback is waning. Keeping in mind that the US greenback is the world's reserve currency, a switch to the euro would be a huge hit in the confidence in the buck. That would have a devestating impact on the global economic picture and is not in anyones best interest. There are too many countries buried with greenbacks in their reserves. We are not in a very good economic position, nationally or globally.

Here's another interesting take on it.

http://www.lewrockwell.com/orig4/latulippe6.html

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Last month we nearly set a record for a monthly trade deficit, but it occurred after a long 30% slide in the value of the dollar against a variety of world currencies. Our exports should be booming, and imports should be prohibitively expensive…bringing our deficit to a balance.

Numerous policies can be blamed for the continued hemorrhage. The fact that OPEC continues to accept only dollars for oil purchases is a biggie. If America was any other nation, the recent plunge in the value of our currency would result in a gigantic surge in the price of oil. This alone would short-circuit the recovery and slump the economy back into recession…shutting off our ability to import and thus bringing the trade deficit to balance.

But since the dollar is the medium of oil purchases, OPEC gets hosed when the dollar drops, while we continue to import oil at the same price.

One might ask why OPEC goes along with this charade. In fact, some oil-exporting nations have discussed switching to the Euro, to gold, or to a basket of currencies. But this would undoubtedly raise the ire of some very heavily armed people.

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