Comment by falsestprophet | Hacker News Reader

Comment by falsestprophet | Hacker News Reader

Parent Full thread

"The Americans largely do the same (see how quickly the leader of an oil producing country is deposed is he declares to ditch the dollar). The Brits gave their empire to the Americans to piggy back off this."

This petrodollar conspiracy is baffling.

Countries don't hold dollars primarily to buy oil.

The oil and gas industry is only about 4.6% to 6.5% of the global economy.

Countries hold reserve currencies to manage the exchange rate of their currency. Petrodollar conspiracists would be well served by learning about foreign exchange reserves.

See: https://en.wikipedia.org/wiki/Foreign-exchange_reserves

And in any case, only 65% of foreign currency reserves are in the USD.

Furthermore, research shows that being the world's primary reserve currency affords the United States negligible advantage: 0.3 to 0.5 percent of US GDP in a normal year.

See: http://www.mckinsey.com/insights/economic_studies/an_exorbit...

Compare that to the costs of "deposing the leader of an oil producing country": $6 trillion for the Iraq war or about 36% of GDP

See: http://www.reuters.com/article/us-iraq-war-anniversary-idUSB...

"is only about 4.6% to 6.5% of the global economy."

You think that's a trivial amount? 4 to 7 % of all human activity is oil or gas? That includes agriculture, weapons consumer goods, all construction, all construction materials, all other mining, all electronics, all automotive, all other energy, all entertainment, all education, all communications, all pharmaceuticals, all illegal drugs, all human trafficking, etc.

just 4 or 7%? !

As to the Petro dollar conspiracy,i didn't talk about that (not in regards to the dollar anyway), just mentioned the longevity of those who walk away from the buck.

But you brought up some numbers...

To your point that trillions were spent on Iraq, you're confusing the time line. In 2003 we were told, the war was going to cost a few hundred billion. And that the Iraqis, so grateful to their liberators, would pay for it with their oil.

Didn't pan out, it never does, but our actions can only be based on our current beliefs, not our future ones. We thought the war would be short and free (remember Bush's "mission accomplished" photo op in 2003).

0.5% of the American GDP is 90 billion, with an NPV of 36 trillion (calculated using the, admittedly the current 0.25%). Chump change indeed. That's a tremendous amount of wealth.

As to the foreign exchange, 65% are U.S. dollars, while the U.S. is less than one fifth of the world economy. Bit of an unbalance, no ?

Reply on news.ycombinator.com