Erm, Richard?

The next step for the single currency will be for world commodity prices to be fixed in euros rather than dollars, a development that would also strengthen the arguments for UK membership. At present, manufacturers in Britain and, indeed, the eurozone are hostages to fluctuations in the US economy that have nothing to do with our suppliers or our own economy. Having world commodity prices fixed in euros would transfer the US\’s current economic advantage to Europe.

You do know that this is entirely irrelevant, don\’t you? That it makes not a jot nor tittle of difference what currency people use to trade commodities, don\’t you?

Or are you really this deeply ignorant?

Woth reading Martin Wolf on this issue.

Yes, Corbett really is that ignorant.

7 comments on “Erm, Richard?

  1. The logical next step is to have multiple currencies within the UK. The London Lire, the Glasgow Groat and the Norwich Nickel.

  2. Count me in as one of the ignorant ones
    When the euro is king, the US will have to borrow euros to pay for imports rather than printing more dollars..
    Quite a change for the US..

    Tim adds: Why? Why would the US have to “borrow” euros? When the UK buys oil it does not have to borrow dollars to do so, even though oil is priced in dollars. It can either say “Hello nice Mr. Oilman, would you like pounds at the current exchange rate”? And if the answer is no it can go to the bank, swap those pounds for dollars at theat current exchange rate and pay nice Mr. Oilman. Who is borrowing?

  3. Commodity prices are influenced by the weakness of the dollar, but eventually the greenback will, as with all these things, recover. Switching commodities into euros is hardly likely to make any difference.

    Of course, there is a separate argument for actually tying currencies to commodities through a modernised version of a gold standard, perhaps.

  4. the US is borrowing to pay its oil bill and other items at the rate of 1 trillion US bucks a year
    whoops ,meant to say printing…
    and if I’ve done my stats right,1/2 of those bucks never make it back to the US
    quite a loss for the reast of the world ,which means a profit for the US

  5. em: Yes, it seems the ‘rest 0f the world’ is really stupid. Or is there some other factor at work here?

  6. yes zt …as long as the dollar remains at a constant value ,they are trading dollars for goods and get the jobs that go along with them

    lord knows there are enough americans complaining about the loss of jobs..

    back in the olde days of gold for trade, it was called beggar thy neighbor..

  7. Every now and again I come across somebody saying the US gets its oil for free because it simply prints off more cash and hands it over, and if oil was priced in Euros they wouldn’t be able to do this hence the US had to invade Iraq. Or something.

    First time I have come across it here, though. Of course, were the US government simply printing off millions of dollar bills each day in order to pay for stuff, we would expect to see hyperinflation of the type which Zimbabwe is experiencing. We aren’t, because they aren’t.

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