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news report
 Thursday January 16, 2003 19:53 by Graham Caswell - Feasta caswell at indigo dot ie
 America NEEDS oil to be sold in US$ You need dollars to buy oil from OPEC, so you have to buy dollars from the US - a very lucrative situation for America. But if you could buy oil in Euros.... The US dollar is the defacto world reserve currency. This means that the United States gets an indefinite long-term subsidy since other nations must buy US$ in order to trade with each other. It is this subsidy which financies America's massive trade deficits. But now we have the Euro there is the possibility of another world reserve currency. What is stopping this happenning is that OPEC will only sell oil for US$. You can only buy oil if you have dollars, and only one country has the right to print dollars -the US. However if OPEC started selling oil for Euro, the United States would be in deep trouble. Iraq has already started selling oil for Euro and Iran is talking about it. Does this help explain the rush to war? The full paper by Cóilín Nunan is available at http://www.feasta.org/documents/papers/oil1.htm |
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