Who benefits from high oil prices?

[Toddsterpatriot]

For Russia, oil prices are not critical at all, because there almost all foreign exchange earnings are converted into foreign assets and do not go directly to the economy.

It's true, Putin and his cronies steal a lot of the oil revenue, but some does
trickle down to the long-suffering Russian peasants.

 

[Toddsterpatriot]

Vice versa. For example, Germany wants to buy oil from Russia. For this it has to buy dollars from the USA, for this it needs to produce goods, Goods from Germany go to the USA, dollars to Germany. But dollars are worth nothing to the United States, the Fed just prints them. Accordingly, US takes goods from Germany free of charge in this case. The more expensive the oil, the more commodity. After these dollars have arrived in Russia, they are invested in US government bonds, as a result, the dollars come back to the Fed and are canceled. Nominally it's the Debt, but really it's just increase of the Debt that never stop, it's permanently refinancing
That is why a strong country always promotes its currency as the currency of world trade and foreign exchange reserves.

For example, Germany wants to buy oil from Russia. For this it has to buy dollars from the USA,

Or they can use dollars they already hold. Or Euros.

But dollars are worth nothing to the United States, the Fed just prints them.

The Fed isn't printing dollars to exchange for German goods. The Fed buys no German goods.

After these dollars have arrived in Russia, they are invested in US government bonds, as a result, the dollars come back to the Fed and are canceled.

The Fed doesn't cancel the dollars that buy US Treasuries, those dollars are spent by the Treasury.

 

[Toddsterpatriot]

The USA consumes about 2 times more than it produces.

Link?

 

[rupol2000]

Or they can use dollars they already hold. Or Euros.

For those dollars is also paid

Or Euros.

Oil is not sold in Euro

The Fed isn't printing dollars to exchange for German goods. The Fed buys no German goods

it happens indirectly

The Fed doesn't cancel the dollars that buy US Treasuries, those dollars are spent by the Treasury.

Any assets that come to the issuer are extinguished, there is no point in keeping them

 

[rupol2000]

Link?

These data are rough, you can clarify it according to statistics

The leading countries in production produce about 10 million per day each, the United States consumes 20 million per day. I'm not going to count you anything in grams.

 

[Harpy Eagle]

America is the worlds #1 producer of oil.

Figure it out.

we also have the highest production cost

 

[Harpy Eagle]

Cheap oil benefits the US, that's one thing for sure.

Yet it was President Trump that got SA and Russia to cut production in 2020 due to the low cost of oil hurting our oil companies.

 

[Toddsterpatriot]

For those dollars is also paid

Oil is not sold in Euro


it happens indirectly


Any assets that come to the issuer are extinguished, there is no point in keeping them

Oil is not sold in Euro

Really?

If Russia wants to sell in Euros and Germany wants to buy with Euros, they can't?
There is a law against that?
Post the law.

it happens indirectly

I agree, your claim was wrong.

Any assets that come to the issuer are extinguished, there is no point in keeping them

The assets aren't coming to the Fed, they're coming to the US Treasury.
Were you ignorant, or lying?

 

[Toddsterpatriot]

The leading countries in production produce about 10 million per day each, the United States consumes 20 million per day.

Link the stats for US production, imports and exports.

 

[rupol2000]

Oil is not sold in Euro

Really?

If Russia wants to sell in Euros and Germany wants to buy with Euros, they can't?
There is a law against that?
Post the law.

De facto. There are no "law" that export-economics must use their central banks as currency board, but it works. I don't now about how it works in the sense of legal regulations. It probably depends on the policy of the central banks

 

[rupol2000]

The assets aren't coming to the Fed, they're coming to the US Treasury.
Were you ignorant, or lying?

The Fed is usually the primary holder of tis bonds, and it is the seller. But these are all the details, no matter through whom they turn it, the dollar still sooner or later comes to the bank, that is, to the issuer.

 

[surada]

Yet it was President Trump that got SA and Russia to cut production in 2020 due to the low cost of oil hurting our oil companies.

Trump may brag about that, but Saudi cut production on their own because of the pandemic and low demand. God, he is insufferable.

 

[Toddsterpatriot]

There are no "law"

Exactly. So why did you claim oil had to be sold in dollars?

 

[Harpy Eagle]

Trump may brag about that, but Saudi cut production on their own because of the pandemic and low demand. God, he is insufferable

I do not think so, they were not going to until he threatened them. Low prices do not hurt them as much as they hurt US companies.

 

[Toddsterpatriot]

The Fed is usually the primary holder of tis bonds, and it is the seller. But these are all the details, no matter through whom they turn it, the dollar still sooner or later comes to the bank, that is, to the issuer.

The Fed is usually the primary holder of tis bonds,

Why would the Fed hold a bond that I purchased?

and it is the seller.

They sell them and they hold them? You're making less and less sense.

the dollar still sooner or later comes to the bank, that is, to the issuer.

Then why is the money supply getting larger and larger?

 

[surada]

I do not think so, they were not going to until he threatened them. Low prices do not hurt them as much as they hurt US companies.

Trump LIED.

 

[rupol2000]

Why would the Fed hold a bond that I purchased?

Don't be an idiot. The Fed buys government bonds from the market. In the US, it is most likely the main holder. This is the main mechanism for financing the budget deficit.

 

[rupol2000]

They sell them and they hold them? You're making less and less sense.

It seems You don't understand anything about finance. The conversation is over

 

[Toddsterpatriot]

Don't be an idiot. The Fed buys government bonds from the market. In the US, it is most likely the main holder. This is the main mechanism for financing the budget deficit.

The Fed buys government bonds from the market. In the US, it is most likely the main holder.

Outstanding federal debt is $28.9 trillion.
The Fed holds $5.5 trillion. Less than 20%.

This is the main mechanism for financing the budget deficit.

You're lying.

 

[Toddsterpatriot]

It seems You don't understand anything about finance. The conversation is over

I agree, it's hard for me to talk to one as dumb as you.