"DSK" wrote in message
...
NOYB wrote:
It's deflated in value relative to other currencies.

Really? Who'd a thunk it?

... But not relative to how much oil a dollar will buy...

Bzzt, try again

... at least until the other "inflated" currencies have driven the price
of oil up.

The other currencies are irrelevant to whether or not the dollar is
deflated, unless you're sepcificaly talking about the exchange rate.


The value of the dollar is a direct function of exchange rates. If the US
dollar was the only currency in the world, then the value of the dollar
couldn't fall...because there would be no other currency to measure it
against.




If demand from other countries didn't increase while the dollar's value
fell, then the price of oil would actually fall.


???

Better think this one over again too.

No need to. If nobody else needed oil besides the US, then we would drive
demand...and consequently, we would drive the price.


If the dollars value falls (and BTW this is not deflation) then it will
take more of them to buy whatever... oil, bread, ammo, other currency...


Not if bread, ammo, and other currency is pegged to the dollar...like oil.

Oh wait! China's currency (yuan) *is* pegged to the dollar. And it costs
no more additional US dollars to purchase a yuan today even with the fall of
the value of the dollar. Imagine that! Thank you for proving my point.

The basic relationships of monetarism are simple, when you get them wrong
you show that you're poorly educated on the subject. Probably parroting
some right-wing talk radio nonsense.

I don't listen to talk radio.

If demand from other countries didn't increase while the dollar's value
fell, then the price of oil would actually fall.


???

Better think this one over again too.


No need to. If nobody else needed oil besides the US, then we would drive
demand...and consequently, we would drive the price.


Aren't you forgetting half the equation? There's a little thing called
supply...

Or are you daydreaming about a world where George Bush Jr (on the advice
of Pat Roberson) has nuked the rest of the world into the Stone Age,
thus leaving all the oil for us?


If the dollars value falls (and BTW this is not deflation) then it will
take more of them to buy whatever... oil, bread, ammo, other currency...


NOYB wrote:
Not if bread, ammo, and other currency is pegged to the dollar...like oil.

Oh wait! China's currency (yuan) *is* pegged to the dollar. And it costs
no more additional US dollars to purchase a yuan today even with the fall of
the value of the dollar. Imagine that! Thank you for proving my point.

Proving what? Are commodities pegged to the yuan? You're saying that the
US dollar's value is strictly controlled by the value of the yuan, and
China is on an "oil, bread, & ammo" standard" (vice the old time gold
standard)?

I'd suggest some basic (very very basic) econ texts.

DSK

"DSK" wrote in message
...
If demand from other countries didn't increase while the dollar's value
fell, then the price of oil would actually fall.


???

Better think this one over again too.


No need to. If nobody else needed oil besides the US, then we would
drive demand...and consequently, we would drive the price.


Aren't you forgetting half the equation? There's a little thing called
supply...


Supply isn't as much of an issue when it greatly exceeds demand. Remember
that in my hypothetical scenario, there are no other countries or other
countries driving demand.




Or are you daydreaming about a world where George Bush Jr (on the advice
of Pat Roberson) has nuked the rest of the world into the Stone Age, thus
leaving all the oil for us?

No. But you need to remove the demand from other countries from the
argument in order to see what effect a falling value of the dollar would
have.



If the dollars value falls (and BTW this is not deflation) then it will
take more of them to buy whatever... oil, bread, ammo, other currency...

I didn't call it "deflation". I called it a deflated currency. There's a
big difference.




NOYB wrote:
Not if bread, ammo, and other currency is pegged to the dollar...like
oil.

Oh wait! China's currency (yuan) *is* pegged to the dollar. And it
costs no more additional US dollars to purchase a yuan today even with
the fall of the value of the dollar. Imagine that! Thank you for
proving my point.

Proving what? Are commodities pegged to the yuan?

No. The yuan is pegged to the dollar.

Oil is priced in US dollars. If the dollar falls in value relative to other
currencies, the price of oil doesn't change unless:

1) the suppliers start selling more to the other countries because their
money is worth more

2) the demand for the oil increases.


All things being equal, the value of the dollar in and of itself has no
effect on the price of oil...The only thing that affects it is supply and
demand (real or perceived).


You're saying that the
US dollar's value is strictly controlled by the value of the yuan,

No. The yuan's value is strictly controlled by the dollar. Not the other
way around.


and China is on an "oil, bread, & ammo" standard" (vice the old time gold
standard)?

No. China is on a US dollar standard.


I'd suggest some basic (very very basic) econ texts.

For you maybe.

NOYB wrote:
Supply isn't as much of an issue when it greatly exceeds demand. Remember
that in my hypothetical scenario, there are no other countries or other
countries driving demand.




Or are you daydreaming about a world where George Bush Jr (on the advice
of Pat Roberson) has nuked the rest of the world into the Stone Age, thus
leaving all the oil for us?


No. But you need to remove the demand from other countries from the
argument in order to see what effect a falling value of the dollar would
have.

Oh, I see. So, your statements are supposing that there should be no
other country in the world buying oil except the US, then we could
dictate price?

A nice daydream. Let us know when you're ready to wake up.



If the dollars value falls (and BTW this is not deflation) then it will
take more of them to buy whatever... oil, bread, ammo, other currency...


I didn't call it "deflation". I called it a deflated currency. There's a
big difference.


Oh, you finally caught this error? Go back to sleep, Nobby.


No. The yuan is pegged to the dollar.

Oil is priced in US dollars. If the dollar falls in value relative to other
currencies, the price of oil doesn't change

Wrong. If the dollar falssin value relative to other currencies, then
all goods purchased from other countries... including oil... will
require more dollars to buy.



All things being equal, the value of the dollar in and of itself has no
effect on the price of oil...

Now there, I agree.

The only catch is when you actually try to *buy* oil with those dollars,
then the sellers perception of the dollars value becomes important.



I'd suggest some basic (very very basic) econ texts.


For you maybe.


No thanks, I prefer to live in the real world, where daydream economics
don't really work.

DSK