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WW3, Recession, or Sanctions

Effective March 20, Iran will create an oil bourse (market) which will operate with the Eruo as it's currency. To the unaware, this information is probably a big "so fucking what?". But I asure you that this move will have vast economic consequences in the United States... and the world.

In 1975 OPEC agreed to set all payments for oil to the US dollar. Meaning, if a country wanted to buy oil form an OPEC nation, they had to have the US currency. For the US masterminds of this agreement it was pure brilliance. This allowed the US to go into deficit spending on an unprecedented rate with relatively little inflation. The US could print all the dollars it wanted to pay foreign debt, yet not have the excess currency return to the economy.

Instead, this excess currency stays in global cirrculation and reserve. But not for the purpose of collection form the US, but to buy and secure the future purchase of oil. With the need for oil increasing endlessly over the years, the US was allowed to keep printing money that continued to flow offshore to pay foreign debt without any economic consequences. This means at present that 66% of the US currency in print is held outside the country for the purpose of buying oil. This 66% of currency does not effect the value of the dollar because it does not make it back to the country in any significant form.

Now, coming back to the topic at hand.

On March 20, Iran plans to start selling it's oil for euros instead of dollars. Just Iran, not all of OPEC which will be watching to see what happens. For the last few years, OPEC has been considering switching to euros in place of the dollar.

The reason OPEC has not switch to the Euro, inspite of rising dislike of the US currency is simple. Some people refer to the dollar as the "petrodollar", refering to it's link to oil. But those more educated refer to the dollar as the "F-16 Dollar" refering to the fact that the dollar is not backed with oil, but military force for those refusing to accept the currency. The US, the only remaing superpower after the fall of the USSR which was a result of the dollar being used as the currency of OPEC, has the most powerful army in the world.

To bring things into prespective last year the US spent 700 billion dollars on it's millitary. The next biggiest spender was Russia at 50 billion dollars. The US spends more on it's millitary each year than the rest of the world combined.

The standard US reaction to a threat to the dollar is, if it can't be quickly resolved with the mouth it will be with the fist. An example of which is what happened in Iraq, which was a display of power above all else.

Now Iran is attempting to do what could spell economic disaster for the US by providing a market place for oil in which the dollar is no longer a necessity. Iran it's self could not have a termendous effect on the dollar as the currency of oil. It only produces about 10% of the world's oil. Consider that oil is a multi-trillion dollar business yearly, this is only a drop in the bucket. The real danger comes in the form of thier market succeeding and the rest of OPEC following suit. If this would happen, large amounts of perviously stockpiled overseas dollars would find thier way back into domestic markets has countires that hold them in reserve would start spending them, the US would have to start paying its debts by supplying in goods and services to foreign countries. The government would be unable to pay debt as easy with the falling demand for the greenback. Thus reducing American living standards, possible such a decline as experienced with the stock market faiure of 39'. In worst case scenarios, if the majority of dollars made thier way back to the States, the dollars value could decline by 80% of current levels.

Considering what is at risk, if the US cannot convince the UN to impose sanctions against Iran for thier nulcear develpment which has been going on for several years and only has become an issue has thier plans to market oil for euros has come to light. The US will have little choice but to invade the country, or face economic downfall - fast or gradual depending on how the cards play.

The problem with military action against Iran is it's strong ties to Russia and China, who may well come to the countries defence. WW3?

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And this effects your acne how?

Your acne will be the least to worry about.

USA cannot finance another war and has minimal support among its population for it. Average American is used to cheap oil and don't understand such things as OPEC, Iran and so on.

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Guest Hi   Im Bitter

Acne during WW3 would blow.

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Acne during WW3 would blow.

Maybe the nuclear radiation would kill it...and then we'd get cancer right after our skin clears.

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Guest Grow_To_Overthrow

WW3 is already.

Elaborate, justify and cite it for me. :)

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well when the richest countries have troops and claim firmly to finish battles... Harper (Canada) confirmed the maintainance of troops for next 10 years, and its no secret he is for war. And we all know Canada is a very pacific country. Security has never been as tight in northamerica.

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well when the richest countries have troops and claim firmly to finish battles... Harper (Canada) confirmed the maintainance of troops for next 10 years, and its no secret he is for war. And we all know Canada is a very pacific country. Security has never been as tight in northamerica.

That made very little sense to me. Canada is going to start a war? Is that what you're saying?

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Wars will always be waged from now until the end. Get used to it. If it's not one thing, it will be another.

There are political message boards were such talk would be acceptable. I fail to see how it is relevant here.

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Guest Grow_To_Overthrow

well wtf are they doing with troops,

Name one developed country that doesn't have troops whom are prepared for battle.

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