Would the current credit crunch

[floridablue]

Be because the banks are buying our own treasury bills?

[Scipio the Elder]

1. No, this ball got started after Nixon

Once we went off the Gold Standard, we tied the value of our money to the petrodollar.

You cannot trade oil on the international markets unless it is exchanged in the US Dollar. As long as the world keeps on drinking, we can take loans from every nation in the world and they will find us to be quite stable in terms of paying back the loan.

OPEC responded to this by boycotting us. We responded by converting our navy to nuclear power. Yes, we will still deploy soldiers into your deserts without oil.

China responded to this buy issuing us loans and manipulating the exchange rate between the Yuan and the Dollar. By doing so, they have successfully taken our manufacturing base from us. Pile that on top of the eco-hippy cult moral crusade, and we'll never get our manufacturing hubs back.

Both of these were a head ache enough to handle until... the EU finally came around.

Iraq tried to switch to exchanging it's oil to the Euro in 2002. One year later, their entire nation was destabilized. Iran is trying to do the same thing. Etc, etc, etc.

If oil can be exchanged in other currencies, the US Dollar, literally, has nothing behind it. We cannot issue promises to manufacture needed goods. We cannot issue promises for guaranteed consumption of other national output. Our international obligations will cease, our global moral crusades will come to an end. Our unlimited spending will no longer remain.

The only thing we have in abundance are a bunch of stupid people with guns.

[floridablue]

2. Well, that was frightening.

Well said, but frightening all the same.